HomeMy WebLinkAboutDoc 289 - Amend Improv Agrmt - TetherowDeschutes County Board of Commissioners
1300 NW Wall St., Suite 200, Bend, OR 97701-1960
(541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org
AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of May 5, 2010
Please see directions for completing this document on the next page.
DATE: April 27, 2010
FROM: Anthony Raguine Community Development Department
617-4739
TITLE OF AGENDA ITEM:
Consideration of Board Signature of Document No. 2010-289, an amendment to Improvement
Agreement no. IA -07-6, for overnight accommodations at the 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 the Tetherow Destination Resort. Per that original Agreement, the overnight
accommodations were to be inspected and receive final 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.
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 ovemight
accommodations. On April 16, 2010, the applicant, Arrowood Development, LLC, submitted an
application and the necessary documentation to amend the Agreement. If approved by the Board, this
amendment would extend the Completion Date for the required overnight accommodations for one (1)
year to September 24, 2011. This is the applicant's second 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 coupled with the national credit situation make the applicant's extension request
reasonable and in the public interest.
To date, the Tetherow Destination Resort has received final plat approval for 302 of the 377 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 extensic n 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 he
ILOC to complete the overnight lodging and leave the lodging vacant given the current econom c
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. 2010-
289.
ATTENDANCE: Anthony Raguine
DISTRIBUTION OF DOCUMENTS:
Original to Anthony Raguine 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
LEG COUNSEL
For Recording Stamp Only
AMENDMENT NO. 4 TO IMPROVEMENT AGREEMENT NO. 2007-380
Overnight Lodging
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, ("Developer"), dated August 29, 2007, together
with the Amendments in Deschutes County, Document Nos. 2007-493, 2008-576, and 2009-510
(Clerk recording Nos. 2007-53416, 2008-43806, and 2009-42805), is amended as set forth below,
effective upon signature of all parties. All other provisions of the Agreement remain the same and n
full force.
3. Exhibits. The Exhibits listed below and attached to this Amendment No. 4 are hereby
incorporated herein by reference as a part of the Agreement and supplement that Exhibit D
attached to Amendment No. 2 to Improvement Agreement - Overnight Lodging, Document No.
2008-576.
3.4. Exhibit F - Verification by Wells Fargo of expiration date of Irrevocable Letter of Credit
No. NZS648008.
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 extended by one year resulting in a new
Completion Date of September 24, 2011.
SIGNATURES ON FOLLOWING PAGES
1 — Amendment No. 4 to Improvement Agreement — BOCC Document No. 2010-289
Dated this of , 2010 BOARD OF COUNTY COMMISSIONERS
ATTEST:
Recording Secretary
STATE OF OREGON )
) ss.
County of Deschutes )
DENNIS R. LUKE, CHAIR
ALAN UNGER, VICE -CHAIR
TAMMY BANEY, COMMISSIONER
Before me, a Notary Public, personally appeared DENNIS R. LUKE, ALAN UNGER, and TAMMY
BANEY, 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 , 2010.
Notary Public for Oregon
My Commission Expires:
DEVELOPER:
Dated this of , 2010.
ARROWOOD DEVELOPMENT, LLC
By:
Its:
STATE OF OREGON
) ss
County of Deschutes
Before me, a Notary Public, personally appeared the foregoing instrument as
of Arrowood Development, LLC. And acknowledged
DATED THIS day of , 2010.
Notary Public for Oregon
My Commission Expires:
2 — Amendment No. 4 to Improvement Agreement — BOCC Document No. 2010-289
1 ES
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5} " `.•,,y.. a ` `' " Community Development Department
Planning Division
117 NW Lafayette Avenue, Bend, OR 97701-1925
(541) 388-6575 - Fax (541) 385-1 764
http://www.deschutes.org, 'cdd
IMPROVEMENT AGREEMENT APPLICATION
FEE:
Applicant's Name (print): ARROWOOD DEVELOPMENT, LLC Phone: (541 ) 749-4044
C/o Tia Lewis, Schwabe, Williamson & Wyatt Bend OR 97702
Mailing Address: 360 SW Bond St., Ste. 400, City/State/Zip:
Property Owner's Name (if different)": Phone: ( )
Mailing Address: City/State/Zip:
Property Description: Township 18 Range 11 Section Tax Lot 120
Partition, Subdivision or Site Plan File Numbers: TP -07-990, SP -07-6 / MC -08-6 / E-09-25
Please submit the following information with your application:
1. Complete application form with appropriate signatures.
2. Schedule for all required improvements including the completion date and cost for each improvement or repair
to be covered by this Agreement.
3. A list of contractors who will construct or complete the required repairs and improvements, along with
completed bid forms from each listed contractor.
4. A preliminary title report.
5. Correct application fee.
6. Burden of proof statement explaining the reasons why the required repairs and improvements cannot be
completed prior to final plat approval and the purpose for the Improvement Agreement. If color exhibits are
submitted, black and white copies with captions or shading delineating the color areas shall also be provided.
7. Name, address and phone number of the financial institution that will issue the financial assurance for the Agreeme rt.
8. Draft of financial assurance.
INSTRUCTIONS
Once your application has been reviewed and deemed complete, this office will prepare an Improvement Agreement,
with a County contract number, for your signature. As the. financial assurance for the Agreement is also subject to
County review, the draft of the financial assurance must be approved prior to executing the Agreement. Please sign
the Agreement before a notary and send it to your surety company_ The surety company can then prepare the final
version of the financial assurance, with reference to the County contract number. The financial assurance must be
dated the same day as, or later than, the signing date on the Improvement Agreement. Next, bring the Improvement
Agreement, along with the financial assurance, to the Community Development Department, so that the Director can
sign the Agreement. Finally, you must then record the Agreement and financial assurance with the Deschutes County
Clerk, and place the volume and page number of the recorded Agreement on the final mylar, as applicable. Keep in
mind that the original Agreem will be recorded, so if your surety company also needs an original, then you will
need to prepare two origin - ions.
Applicant's Signature:, -..1 19.1.t '....#w' T. 1-o C c c Date: 3 / fa45/G
Properly Owner's Si! ature (if erent)`: - Date:
Agent's Name applicab - Phone: ( )
Mailing Address: City/StateJZip:
if this application is not signed by the property owner, a letter authorizing signature by the applicant must be attached.
7/09
BURDEN OF PROOF
1. Introduction
The overnight accommodations for the Tetherow Destination Resort were approved
through CU -07-11, SP -07-6 and TP -07-990 / MC -08-6. The timeline to complete the
improvements in those land use applications was recently extended by one year through
E-10-19 to extend the deadline to May 28, 2011. The Applicant now seeks a one year
extension of the Improvement Agreement to construct the overnight accommodations.
This is the Applicant's second requested extension.
2. Criteria
Title 19, Bend Urban Growth Area Ordinance
Section 19.106.110. Provision of Streets, utilities, developed recreational facilities.
A. The Planning Director or Hearings Body shall find that all streets,
utilities, developed recreational facilities and visitor -oriented
accommodations required by the FMP are physically provided or are
guaranteed through surety bonding or substantial financial
assurances approved by the County prior to closure of sale of
individual lots or units.
B. Financial assurances or bonding to assure completion of streets and
utilities, developed recreational facilities and visitor -oriented
accommodations in the FMP shall be required pursuant to the
security requirements for site plan review and subdivision review
established by the Deschutes County Code.
FINDING: Pursuant to County Code requirements, the Applicant financially assured the
overnight accommodation units approved as part of the first phase final plat for the Resort
though an Improvement Agreement adopted by the Board as Deschutes County Document No.
2007-380.1 Through that Agreement, the County is holding security in the form of a Letter of
Credit issued by Wells Fargo in the amount of $8,690,000, representing one hundred and ten
percent of the estimated costs of completing the overnight lodging units. Section 5.4 of the
Improvement Agreement provides for up to three one year extensions for completion of the
overnight improvements. This is the Applicant's second request for an extension. The
requirements for approval of the extension request are set forth below.
Improvement Agreement, 2007-380
5.4. Developer may submit a written request to the County for up to three (3)
one-year extensions of this agreement for the completion of the Overnight
Required Improvements.
The Improvement Agreement has been amended three times (Amendment No. 1 to Improvement
Agreement Overnight Lodging, 2007-493 and Amendment No. 2 to Improvement Agreement — Overnight
Lodging, 2008-576) to allow the Deschutes County Administrator or his delegate to approve the surety
company securing the financial assurance and to modify the number of units and amount of security.
Amendment No. 3, 2007-380, replaced the previously issued security bond with a Letter of Credit and
extended the completion date for the overnight units to September 24, 2010.
1 BURDEN OF PROOF
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FINDING: This is the second extension request submitted under this Agreement.
5.4.1. Developer shall submit the request for an extension sixty (60) days
prior to the expiration of this agreement or any previously granted
extension.
FINDING: The expiration provisions are set forth in Section 25 of the Agreement and the
approved amendments. The obligation to construct the overnights currently
expires on September 24, 2010. This request is well within the 60 days prior to
expiration.
5.4.2. Developer may request one extension in any calendar year.
FINDING: This is the second request submitted under this Agreement and will be the only
request submitted this calendar year.
5.4.3. Developer shall apply for and receive an extension per DCC
22.36.010(C) ("Land Use Extension") prior to submitting a request
for an extension of this agreement.
FINDING: The Applicant has applied for and received the land use extension pursuant to
DCC 22.36.010 extending the deadline to May 28, 2011. See E-10-19.
5.4.4. For that portion of the Financial Assurance that is secured by the
Bond, Developer shall obtain a new Bond in a form and amount
approved by County and consistent with the Land Use Extension.
FINDING: The financial assurance is in the form of a Letter of Credit, issued by Wells
Fargo, which will be extended in accordance with the time frame in the present
request.
5.4.5. A bond rider from the surety company stating that the existing bond
is also valid as a Financial Assurance for the extension may be
submitted to County in lieu of the new bond required by Section
5.4.1.
FINDING: The Applicant will obtain a letter from Wells Fargo stating that the existing Letter
of Credit remains valid as security for the period of the extension. This letter will
be attached and recorded with Amendment No. 3 to the Improvement
Agreement.
5.4.6. Within thirty (30) days of Developer's written request for an
extension and submittal of the document required in either 5.4.4. or
5.4.5., the Completion Date may, if the County deems it to be in the
public interest to do so, be extended in writing.
FINDING: In light of the current economic conditions coupled with the national credit
situation, the Applicant's request for a one year extension is reasonable and in
the public interest. Substantial public and private infrastructure and
improvements have been constructed at the Tetherow Destination Resort
including two roads developed to County collector standards, numerous private
roads, the Tetherow 18 -hole links -style golf course, the Tetherow Clubhouse and
significant street, water and sewer infrastructure serving development tracts and
2 BURDEN OF PROOF
PDX/113803/ 1 4454 1 /TM 05766336. I
Tots. The course is open and receiving significant press as one of Central
Oregon's premiere golf courses. However, the applicant has been unable to
begin development of the overnight lodging component of the Tetherow
Destination Resort due to severely constrained financial markets and the
economic downturn in the local and national real estate markets. The Applicant
is working diligently with the private lenders and owners at the Resort to come up
with a financial plan to allow overnight accommodations to be constructed at the
resort as soon as possible. Despite these efforts, the Applicant will not be able to
meet the deadline to construct the overnights by September 24, 2010.
5.4.7. Any extension of the Completion Date shall constitute a new
Completion Date for the purposes of this Agreement.
FINDING: The new Completion Date would be September 24, 2011, as noted in Section 5.3
of Amendment No. 3 to Improvement Agreement — Overnight Lodging, submitted
in Section IV herein.
3. CONCLUSION.
For the reasons set forth herein, the Applicant's request for a one year extension pursuant to
Section 5.4 of the Improvement Agreement for the overnight accommodations (Deschutes
County No. 2007-380) for the Tetherow Destination Resort should be approved.
DATED, this ,30 day of March, 2010.
Schwab:
ms•n & Wya
Tia . Lewis, OSB 437
Of Attorneys for Applicant
3 BURDEN OF PROOF
PDX/113803/144541/TM 05766336.1
WE S
r G0
April 15, 2010
Deschutes County, Oregon
117 NW Lafayette
Bend, OR 97701
Nelda Scott Newton
Senior Vice President
Attn: Deschutes County Planning Director
Re: Wells Fargo Bank, N.A.
Letter of Credit No. NZS648008
Dear Sir or Madam:
Real Estate Group
MAC P6101-121
1300 S.W. Fifth Avenue
Portland, OR 97201
503 886-2564
503 886-1705 Fax
newtonn@wellsfargo.com
Wells Fargo hereby acknowledges it will not serve written notice of non -renewal
of the expiration date of the referenced letter of credit prior to its current expiry,
September 30, 2010. Therefore, the current expiration date of said letter of credit is
hereby acknowledged to be September 30, 2011.
Very truly yours,
WELLS FARGO BANK, N.A.
Nelda Scott Newton
Senior Vice President
cc: Tia M. Lewis, Esq.
Schwabe, Williamson & Wyatt
360 SW Bond Street, Suite 400
Bend, OR 97702