HomeMy WebLinkAboutDoc 509 - Tetherow Resort AmendmentI
I Deschutes County Board of Commissioners
1300 NW Wall St., Suite 200, Bend, OR 97701-1960 ~
(541) 388-6570 -Fax (541) 385-3202 -www.deschutes.org 1
AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of August 22, 2011
DATE: August 11,2011
FROM: Kevin Harrison Community Development Department 385-1401
TITLE OF AGENDA ITEM:
Consideration of Board Signature of Document No. 2011-509, an amendment to Improvement
Agreement no. IA-07-6, for overnight accommodations at Tetherow Destination Resort.
PUBLIC HEARING ON THIS DATE? No.
BACKGROUND AND POLICY IMPLICATIONS:
On May 14, 2008, the Board of County Commissioners (Board) signed an Improvement Agreement
(Agreement) File No. IA-07-6, Document No. 2007-380, related to the required overnight
accommodations for Tetherow Destination Resort. Per that original Agreement, the overnight
accommodations were to be inspected and receive fmal written construction approval from the County
no later than two (2) years from the date the Tetherow Phase 1 Plat was recorded with the County Clerk
(Completion Date). The Tetherow Phase 1 Plat was recorded on September 24,2007. On September
16,2009, the Board granted an extension of the Completion Date to September 24, 2010. On
September 8, 2010, the Board granted a second extension to September 24, 2011.
Per Section 5.4 of the original Agreement, the developer may submit a written request to the County for
up to three (3) one-year extensions of the Agreement for the completion of the overnight
accommodations. Per Section 5.4.6, the County must make a decision on an extension request within
30 days. On July 22,2011, the applicant, VRE Lodge Homes, LLC, submitted an application and the
necessary documentation to amend the Agreement. Therefore, the County is required to make a
decision on the extension request by August 22, 2011.
If approved by the Board, this amendment would extend the Completion Date for the required
overnight accommodations for one (1) year to September 24,2012. This is the applicant's third one
year extension request.
Section 5.4.6 of the Agreement allows the County to grant an extension if the County deems it to be in
the public interest to do so. In the applicant's burden of proof, the applicant argues that the current
economic conditions make the applicant's extension request reasonable and in the public interest.
Attached to this agenda request is the extension application, the written consent of Joseph E. Weston
and Weston Investment Co., LLC, the applicant's burden of proof and the amendment. Please note that
the request is contingent upon the written assurance from Wells Fargo Bank, N .A .. that its Letter of
Credit remains as a valid security for the extension of the improvement agreement. Absent said
assurance, the applicant reserves the right to withdraw this request.
To date, Tetherow Destination Resort has received final plat approval for 302 of the 379 approved
single-family dwelling lots.
FISCAL IMPLICATIONS:
The fiscal choice the Board must make is whether it is in the public interest to allow the extension and
keep the security, the Irrevocable Letter of Credit (ILOC) provided by Arrowood Development, LLC.,
in place but not have the overnight lodging in place, or whether it is in the public interest to use the
ILOC to complete the overnight lodging and leave the lodging vacant given the current economic
situation. Although the ILOC is supposed to be sufficient to cover the construction costs of the units,
until construction begins, it is unknown if the amount is sufficient. Thus, the Board will face either
returning to the developer any excess in the bond or building only as much as the ILOC will cover
while the resort continues to lack sufficient overnight lodging units.
Note that the resort is limited in the number of individual dwelling lots it may plat, regardless of who
owns the land or who the developer is, unless the resort's land use approvals are modified and
additional overnight lodging units are either bonded or built.
RECOMMENDATION & ACTION REQUESTED:
Staff believes the Board should determine if granting the extension is in the public interest. If the
Board determines that granting the extension is appropriate, the Board should sign Document No. 2011
509.
ATTENDANCE: Kevin Harrison
DISTRIBUTION OF DOCUMENTS:
Original to Kevin Harrison to give to the applicant for recording in the Deschutes County Official
Records with instructions to the Clerk to also record it in the Commissioners Journals.
REVIEWED
LEGAL COUNSEL
For Recording Stamp Only
AMENDMENT NO. S TO IMPROVEMENT AGREEMENT
Overnight Lodging
Deschutes County Document No. 2007-380
That certain Improvement Agreement, Deschutes County Document No. 2007-380 ("Agreement"),
by and between DESCHUTES COUNTY, OREGON, a political subdivision of the State of
Oregon ("County") and ARROWOOD DEVELOPMENT, LLC, an Oregon limited liability
company ("Developer"), dated August 29,2007, together with Amendment No.1 to Improvement
Agreement No. 2007-380, Deschutes County Document No. 2007-493~ Amendment No.2 to
Improvement Agreement No. 2007-380, Deschutes County Document No. 2oo8-576~ Amendment
No.3 to Improvement Agreement No. 2007-380, Deschutes County Document No. 2009-510; and
Amendment No.4 to Improvement Agreement No. 2007-380, Deschutes County Document No.
2010-37552, is amended as set forth below, effective upon signature of all signatories hereto. All
other provisions of the Agreement remain the same and in full force.
3. Exhibits. The Exhibits listed below and attached to this Amendment No.5 are hereby
incorporated herein by reference as part of the Agreement and supplement that Exhibit F attached to
Amendment No.4 to Improvement Agreement -Overnight Lodging, Document No. 2008-576:
3.6. Exhibit G -Verification by Wells Fargo of extension of expiration date of
Irrevocable Letter of Credit No. NZS648008 to September 30,2012.
5. Construction of Overnight Lodging Required Improvements.
5.3 Developer shall cause the Required Improvement to be inspected by and
receive final written construction approval from County and/or the State of
Oregon not later than two (2) years from the date the Tetherow Phase 1
Final Plat is recorded with County Clerk ("Completion Date"). This date
is hereby further extended by one (1) year, resulting in a new Completion
Date of September 24,2012.
SIGNATURE PAGES FOLLOW
Page 1 of 5 -AMENDMENT NO.5 TO IMPROVEMENT AGREEMENT DESCHUTES
COUNTY DOCUMENT No. 2007-380 -Overnight Lodging, Deschutes County Document No.
2011-509
DC 2011-509
Dated this ___of _____, 2011 BOARD OF COUNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
TAMMY BANEY, Chair
ANTHONY DEBONE, Vice Chair
ATTEST:
Recording Secretary ALAN UNGER, Commissioner
STATE OF OREGON
County of Deschutes
)
)
)
ss.
Before me, a Notary Public, personally appeared TAMMY BANEY, ANTHONY DEBONE, and
ALAN UNGER and the above-named Board of County Commissioners of Deschutes County,
Oregon and acknowledged the foregoing instrument on behalf of Deschutes County, Oregon.
DATED this __day of _____-', 2011.
Notary Public for Oregon
My Commission Expires: _________
Page 2 of 5 -AMENDMENT NO. 5 TO IMPROVEMENT AGREEMENT DESCHUTES
COUNTY DOCUMENT No. 2007-380 Overnight Lodging, Deschutes County Document No.
2011-509
Dated this __day of ____, 2011 SUCCESSOR TO DEVELOPER:
VRE LODGE HOMES, L.L.C.
a Missouri limited liability company
By: Ocala First Corporation, Inc., Manager
By: _______~___
Henry Warshaw, President
STATE OF MISSOURI )
) ss.
COUNTY OF ST. LOUIS )
Before me, a Notary Public, personally appeared Henry Warshaw, in his capacity as President of
Ocala First Corporation, Inc., a Missouri corporation, Manager of VRE Lodge Homes, L.L.c., a
Missouri limited liability company, and acknowledged the foregoing instrument on behalf of
VRE Lodge Homes, L.L.C.
Dated this __day of ___-->, 2011
Notary Public for Missouri
My Commission Expires: ________
Page 3 of 5 -AMENDMENT NO. 5 TO IMPROVEMENT AGREEMENT DESCHUTES
COUNTY DOCUMENT No. 2007-380 Overnight Lodging, Deschutes County Document No.
2011-509
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BRUCE W. WHITE, ATTORNEY, LLC
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Hand Delivered
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Board of County Commissioners
c/o Deschutes County Planning Department
117 NW Lafayette Ave.1 B~Oregon 97701
l . Re: Extension ofIA-2007-3801
July 22,2011
I Following up on a conference call 1 and other representatives for Virtual Realty Enterprises, LLC
(VRE) had this morning with Laurie Craghead, I am submitting on VRE's behalf an application for
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an improvement agreement in the above-referenced matter to extend the subject IA. This submittal
supplements the written Request for Extension dated July 21, 2011 submitted separately by Henry
Warshaw. A copy ofthat submittal is attached to the application form as well as a check for the filing
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fee. An authorization form authorizing Jason Eckhoff's signature ofthe application form on behalf of
VRE is included.
Please advise ifyou require anything further.
Sincerely.
I ~L1-VWtt:.
Bruce W. White
c. Dave Kanner (Hand Deli vered)
Laurie Craghead (Hand Delivered)
Henry Warshaw (Via Email)
Jim Eckhoff (Via Email)
Jason Eckhoff (Hand Delivered)
P.O. BOX 1298 • BEND, OR • 97709
PHONE: (541) 382-2085
July 21,2011
ViA UPS (lZW89Y290154113508) and FCll( (-541-388-4.752)
Boar.d of Gounty CQmmi5Sioners
Desdiute.s County, Oregon
c/o.Counn, AdminIStrator
Desthutes Cpunty AdminlstrCltion
1300 NW Wall-Street, Suite 200
Bend, Oregon 97701·19'60
Request for Extension· Improvement Agreement (Overnight Lodging) No. 2007-380
Tether:ow Destinatlorr Resort
Dear Commissioners:
The undersigned, as. successor to Virtual Realty Enterprises, LL.C.,_ is the current owner of Tract AB' of Tetlierow.
Phase 1, as per the plat thereof recorded in Volume 20011 Page 51564, OffICial ReCQfds, Deschutes County,
aragon ,"'CountY') (-Tract ABU), Virtual Realty Enterprises, LLC. iNas lhe purchaser at fO'-retiosure of Trap: AS
following default of rts debtor Arrowood Tetherow, lLC (2010-1511~ oesch utes County Reci1rds).
Tract AS is the subject of that certain Improvement Agf~meiit (Overnight LGdging), VoLume 2007, Page 53411,
Official Record-s, Deschutes-County Oregon, as:heretofore amended riA"".
Pucsaant to Sectfon 5.4 o.rthe IA. -the Cpunty may grant up to thtee (3) extenslo1i6 of the IA. upon written request
given shtty (60) day.s prior to the expiration ofthe IA. The currentexpiratiQn of tl:le IA·is september 24, 2011. see,
Amendment No.4 To Impl'QlIement Agreement, 2010-37552, De-schutes County Reeords ("Arnendr:"lli~nt No.4").
As we continue to work with the County and all interested parties to find an appropriate solution to Cf-eate a
successful destination r.esor~, we would like to request an extension of the-IA. Please lat this serve as the request
of the undersigned to extend the IA for one additional year to september 24. 2012. This request is cantingent
upon receiving the written consent fJf Joseph E. Weston and Weston Jnvestment Co., ltC, Cln Oregon limited
nabllltv company, to the requested extension and the written as~ura'l'l!:f! from Wells Fargo BaRk, N.A. that its
letter of Credit remains as valid securiwfor the E!xtenslonaf the IA. Absent said consents and assurance, the
undersigned reserves the (ight to withcfraw this request.
This extension request is consistent with the provisions of Paragraph 5.4 of the IA. It Is being made at least 60
days prior to the expiration of the IA. as it has been previously extended (§ 5.4.1). No other e~tension request has
been made during this calendill year (§ 5.4.2,. VRE has applied for and received it land U:se Extension (6-11-13,
granted on March 18, 2011 for CU007 ·11, SP007-6, TP-07-990 and MC-Q8-6~prior to submitting this request ·for an
exte.ns~n of the IA(§ 5.4.3) in the same manner as !las supported previous IA extensions. As above set fOlth, this
Bequest for ~tenslon !s contingent upon recelvlnga "bond rider,· in a form sub-stantially similar to that attached
to and made a part of Amendment No.4, stating that the existing bond is alsO' valid as security tot the requested
extension (§ 5.4.5). For your review and consideration. please see the e.nclosed proposed Amendment No.5 To
Improvement Agreement ("Amendment No. sn), which has been modeled on the previously agreed to lansuage of
Amendment No.4.
The undersigned believes that it would be in the public interest to extend th~ IA for an additional year. Since
entering into the lA, market conditions have chaoged substantially. As previously noted, the undersigned believes
that additional time Is needed to work with the County and all interested parties to find an appropriate solution to
create a suc~ssful destination resort. Giv.en the depth and J(!ngth of the economic downturn, wbich could not
have been antfcipated when the IA was entered into, granting a'dtJitional time to reSQlve iSsues in a positive
manner Is, io the opinion of the undersigned, clearly In the public Interest.
100 S Brentwood Blvd, Suite 240 • Saint Loui$, Missouri 63105-\635 ; l'HONe: 3 l4.244.:l500 • wElIsITE:www.vrellc:.cOll.l
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Come now, Joseph E. Weston and Weston Investment Co., LLC, an Oregon limited liability
company, and hereby consent to the foregoing Amendment No.5 To Improvement Agreement.
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i Dated this __day of ___----.:>, 2011
Joseph E. Weston
STATE OF OREGON )
) ss.
COUNTY OF MUL TNOMAH )
Before me, a Notary Public, personally appeared JOSEPH E. WESTON and acknowledged the
foregoing instrument.
Dated this __day of ___~,2011
Notary Public for Oregon
My Commission Expires: _________
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I Dated this __day of ____, 2011 Weston Investment Co., LLC
an Oregon limited liability company
By: __________
Joseph E. Weston, Member 1
i STATE OF OREGON )
) ss.
COUNTY OF MUL TNOMAH )
Before me, a Notary Public, personally appeared JOSEPH E. WESTON, in his capacity as
Member of Weston Investment Co., LLC, an Oregon limited liability company and
acknowledged the foregoing instrument on behalf of Weston Investment Co., LLC.
Dated this __day of ___~,2011
Notary Public for Oregon
My Commission Expires: _________
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Page 4 of 5 -AMENDMENT NO. 5 TO IMPROVEMENT AGREEMENT DESCHUTES
COUNTY DOCUMENT No. 2007-380 -Overnight Lodging, Deschutes County Document No. 1 2011-509i
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ON WELLS FARGO LETTERHEAD 1
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AMENDMENT TO IRREVOCABLE LETTER OF CREDIT
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BENEFICARY:
Deschutes County, Oregon
117 NW Lafayette
Bend, Oregon 97701
Attn: Deschutes County Planning Director
I Ladies and Gentlemen:
Letter of Credit No. NZS648008
Date: September __,2011
Amendment No.2
Applicant: Arrowood Development, LLC
This Amendment is to be considered as part of the above Letter of Credit, as heretofore amended
by Amendment No.1 dated September 21, 2010, and must be attached thereto.
Our Letter of Credit remains as valid security for the extension of the Improvement Agreement
addressed in Amendment No.5.
All other terms remain unchanged.
Very truly yours,
WELLS FARGO BANK, N.A.
(AUTHORIZED SIGNATURE)
The original of this document contains the
Seal of Wells Fargo Bank, National Association
Please contact the Trade Services Helpline by telephone at 1-800-798-2815 (option 1) or by fax
I at (415) 296-8905 regarding any inquiries.
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1 Page 5 of 5 -AMENDMENT NO. 5 TO IMPROVEMENT AGREEMENT DESCHUTES 1 I COUNTY DOCUMENT No. 2007-380 -Overnight Lodging, Deschutes County Document No.
j 2011-5091
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If the County requires anything' further in (!onnection with this relfuest, please let us know. Any r.esponse should
be dire.cted to the undersigned.
cc: Ms. Laurie Craghead. Assistant legal Counsel
Deschutes County Oregon
1300 NWWall Street-Stlite 205
Ben~Oregon 9n01-1960
Mr. Joseph E. Weston
2.154 N.E. Broadwav-Suite 200
Portland, Oregon 97232.-15'61
W!:!ston Investment Co., LLC
2154 H.E. BrQadway -Suite lOO
Portland, Oregon 972:32·1561
Wells Fargo B"n~, N.A,
U.S. Trade Servlce~ -Standby letters of.Credlt
One FrO'lltStreat, 21"floer
San Frand.sco1 Califomia _94111-53~
Westchester Fire Insurance Company
436 Walnu.t Street
PhiladelPhia, Pennsylvania 1910(;-3703
Mr, Brut~ W. White, Attornev. LLC.
P.O. Box 1298
Bend, Oregon 9.7709-129:8
Mr. James D. Eckhoff
Attorney-At-Law
5-55 N. New Ballas. Road -Suite 130'
saiht Ld.Uis, Mtss_ouri 63'141-6884
Mr. Jason L Ecld\off
61158 RivOOlMfTrail
Bend, Oregan 97702-1991
Respectfully submitted,
VRE Lodge Homes, L.LC.
a Missouri limited lIabili-ty companv
..------
By Certified MaU/Return Receipt Requested
No: 7004 2890 0002 8501 0033
BV Certified Mail1R~turn Receipt Requested
No: 7004 2890 0002 85-01 0002.
By Certified. MaiVReturn Receipt lteq\Jl!'sted
No: 700418~O 0002. 8501 0019
Letter of Credit No. NZS648Q08
By Certified MClii/Return Receipt Reque.sted
1\10: 7004 28908501 0026
Subdtv.ision Bond No. K07461.OS7
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