HomeMy WebLinkAboutOrdinances - ORD-16-1794 - 06/06/2016 - AGREE TO RELEASE HOVSITE ORISH PRAIRIE (TOWN & COUORDINANCE NO. ORD-16-1794
An Ordinance Authorizing the Mayor's Execution of an Agreement to Release Hovsite
Irish Prairie LLC form Letter of Credit and other Obligations arising out of an Annexation
Agreement dated August 29, 2005 between Hovstone Properties, LLC d/b/a Town &
Country Homes and the City of McHenry
WHEREAS, the City of McHenry, McHenry County, Illinois, is a home rule municipality
as contemplated under Article VII, Section 6, of the Constitution of the State of Illinois, and the
passage of this Ordinance constitutes an exercise of the City's home rule powers and functions as
granted in the Constitution of the State of Illinois.
NOW, THEREFORE, BE IT ORDAINED by the CITY COUNCIL of the CITY OF
MCHENRY, McHenry County, Illinois, as follows:
SECTION 1: The Mayor and City Clerk are hereby authorized to sign the attached
Agreement to Release Hovsite Irish Prairie LLC from Letter of Credit and other obligations
arising out of an Annexation Agreement dated August 29, 2005 between Hovstone Properties,
LLC d/b/a Town & Country Homes and the City of McHenry bearing the date of May 2, 2016
attached as Exhibit A.
SECTION 2: All Ordinance or parts thereof in conflict with the terms and provisions
hereof are hereby repealed to the extent of such conflict.
SECTION 3: This Ordinance shall be published in pamphlet form by and under the
authority of the corporate authorities of the City of McHenry, McHenry County, Illinois.
SECTION 4: This Ordinance shall be in full force and effect from and after its passage,
approval, and publication in pamphlet form as provided by law.
APPROVED THIS 2°a DAY OF MAY 2016
Voting Aye:
Condon, Peterson, Wimmer, Curry, Schaefer, Glab, Santi
Voting Nay:
None
Abstaining:
None
Not Voting:
None
Absent:
None
J-a,� e -c7�--
/ Mayor Susan E. Low
ATTEST:
Ci Cl k Janice Jo es
E Y4W
Agreement to Release Hovsite Irish Prairie LLC from Letter
of Credit and other Obligations arising out of a
Annexation Agreement dated August 29, 2005 between
Hovstone Properties Illinois, LLC d/b/a Town & Country Homes as Developer and
the City of McHenry
WHEREAS, the City of McHenry ("City") entered into an Annexation Agreement with
Hovstone Properties Illinois, LLC d/b/a Town & Country Homes, as Developer, on the 29th day
of August, 2005 for property which is now commonly known as the Oaks at Irish Prairie (the
"Annexed Property") generally located at the southwest corner of Veterans Parkway and
Barreville Road McHenry, Illinois ("Annexation Agreement");
WHEREAS, Hovsite Irish Prairie LLC, a Delaware limited liability company,
("Hovsite") is successor to Hovstone Properties Illinois, LLC, as Developer;
WHEREAS, McHenry Oaks (Chicago) ASLI VIII, LLC ("Avanti") has acquired or will
acquire ownership to the property legally described on Exhibit A attached hereto (the "Avanti
Property"), which property constitutes part, but not all, of the Annexed Property;
WHEREAS, upon acquiring title to the Avanti Property Avanti is willing to assume some
of the obligations of the Developer under the Annexation Agreement in order to complete certain
improvements within the Annexed Property; and
WHEREAS, the City has determined that Avanti's assumption of the foregoing
obligations is in the best interest of the City and will enhance and promote the general welfare of
the City and its residents,
WHEREAS, Hovsite filed with the City and has in force the following bonds (the
"Existing Bonds"):
The Oaks at Irish Prairie / Unit lA / Bond No. 5039227
2. The Oaks at Irish Prairie / Unit 2 / Bond No. 5039226
The Oaks at Irish Prairie / Barreville Road / Bond No. 5039225
4. The Oaks dt Irish Prairie / Unit 1 / Bond No. 5039228
WHEREAS, Avanti desires to replace Existing Bonds No. 5039227, No. 5039226 and
No. 5039225 with performance bonds in favor of the City.
NOW THEREFORE, in consideration of the promises and agreements made herein, the
adequacy and sufficiency of which each of the parties acknowledges as being received herein, it
is agreed as follows:
Upon Avanti's delivery of the Replacement Security (as hereafter defined), the City
agrees to release Hovsite from all obligations under the Annexation Agreement, other
than those that directly relate to the satisfaction of maintenance obligations for
subdivision improvements within The Oaks at Irish Prairie — Unit 1 other than the
sidewalks, trees, driveway aprons and parkway landscaping in front of individual lots (the
"Unit 1 Maintenance Work").
2. Upon Avanti's delivery of the Replacement Security and Avanti's acquisition of the
Avanti Property, Avanti shall be deemed to have assumed all Developer rights and
obligations under the Annexation Agreement other than the following: (i) the obligation
to complete any subdivision improvement obligations related to The Oaks at Irish Prairie
— Unit l; and (ii) the obligation to complete any subdivision improvements to Barreville
Road or to the bike path north of the gas main located north of Veteran's Parkway
(collectively, the "Barreville Road Improvements") that are not within the public right-of-
way or are not within a platted easement or are not upon property owned by Avanti.
3. Upon Avanti acquiring title to the Avanti Property, Avanti shall tender to the City, the
following replacement performance bonds issued by International Fidelity Insurance
Company (the "Replacement Security"), the forms of which are attached hereto and
incorporated herein as Exhibit B-1, B-2 and B-3:
Exhibit B-1 (the "Unit 1A Bond")
Exhibit B-2 (the "Unit 2 Bond")
Exhibit B-3 (the `Barreville Road Bond")
The amount of each bond in the Replacement Security shall be increased by 3% annually.
As additional security, an affiliate of Avanti will provide a set -aside letter or other cash
security to the bonding company issuing the Replacement Security which will serve as
collateral for 100% of the aggregate amount of the Replacement Security.
4. The Unit lA Bond and the Unit 2 Bond shall each secure the completion of the remaining
uncompleted public improvements within their respective units other than the sidewalks,
trees, driveway aprons and parkway landscaping in front of individual lots (such
excluded improvements, the "Occupancy Improvements"). The Unit lA Bond may be
called by the City if the bonded subdivision improvements within that portion of the
Avanti Property within Unit lA are not completed on or before the issuance of the 28th
occupancy permit within Unit 1A. The Unit 2 Bond may be called by the City if the
bonded subdivision improvements within that portion of the Avanti Property within Unit
2 are not completed on or before the issuance of the 42nd occupancy permit within that
portion of the Avanti Property within Unit 2. The City shall not be obligated to issue any
occupancy permit in Unit 1 or Unit 2 unless the person applying for such occupancy
permit has completed the Occupancy Improvements or, if weather prohibits completion,
has otherwise provided City with reasonable assurances of the completion of the
Occupancy Improvements when weather allows.
5. Upon release of any Bond referenced herein (other than a return of the Barreville Road
Bond to Avanti due to the right -of way for Barreville Road not being available as
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provided in Section 6 below), Avanti will post a one year maintenance bond for the
bonded improvements in accordance with City ordinances.
6. Upon Avanti's tender of the Replacement Security„ the City will accept the Replacement
Security and will cancel the following Existing Bonds:
The Oaks at Irish Prairie / Unit lA / Bond No. 5039227
The Oaks at Irish Prairie / Unit 2 / Bond No. 5039226
The Oaks at Irish Prairie / Barreville Road / Bond No. 5039225
7. The City acknowledges that the Barreville Road Bond shall be deposited with the City
with the understanding that certain Barreville Road Improvements cannot be made until
such time as right-of-way for the road is acquired by the City from adjacent owners. If
the City acquires the right-of-way prior to Avanti commencing the improvements bonded
under the Unit 2 Bond, Avanti will complete the Barreville Road Improvements no later
the issuance of the 42nd occupancy permit within Unit 2. If the City acquires the right-
of-way after that date but before the Unit 2 Bond is released, Avanti will complete the
Barreville Road Improvements in a commercially reasonable time. If, at the time the
Unit 2 Bond is released the necessary right-of-way has not been acquired by the City, the
Barreville Road Bond shall be returned to Avanti and Avanti shall pay the City an
amount equal to the cost of the uncompleted improvements bonded by the Barreville
Road Bond (as determined by a then current Engineer's Estimate of Probable
Construction Cost prepared in accordance with generally accepted engineering practices)
and thereafter Avanti shall have no obligations whatsoever in regard to Barreville Road
or the Barreville Road Bond. Avanti's inability to install the Barreville Road
Improvements shall not be a bar to the return and cancellation of the Barreville Road
Bond nor shall it delay the issuance of any permits or other approvals by the City. Avanti
agrees to prepare a plat of dedication for the required Barreville Road right-of-way and
deliver it to the City within 45 days of Avanti's acquisition of the Avanti Property.
8. The City acknowledges and agrees that upon Avanti's deposit of the Replacement
Security, Hovsite will have no further obligations under the Annexation Agreement other
than those that directly relate to the satisfaction of the Unit 1 Maintenance Work.
9. This Agreement may be assigned by Avanti to an affiliate. City agrees to allow Avanti to
substitute bonds having the same terms as the bonds referenced herein with new bonds
that reference an Avanti affiliate that is the owner of record of the Avanti Property and
upon such substitution, the defined terms herein shall be deemed to apply to the
substituted bonds.
10. The City acknowledges that as of the date of this Release Agreement, there are no
amounts due and owing to the City which shall be the responsibility of Avanti and that
there are no agreements with the City that affect the Avanti Property other than the
Annexation Agreement
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11. The City acknowledges that as of the date of this Release Agreement, the Annexation
Agreement is in full force and effect, that no defaults exist thereunder, that the zoning
referenced in the Annexation Agreement is the current zoning, and that there is no
moratorium or municipal ordinance that currently bars the issuance of building permits
and occupancy permits for the Avanti Property.
12. Hovsite is an intended beneficiary of this Release Agreement and may rely on the same.
13. This Release Agreement is conditioned upon Avanti's acquisition of the Avanti Property.
This Agreement shall terminate and be of no force and effect if the Avanti Property is not
acquired by Avanti on or before August 1, 2016.
(SIGNATURE PAGE FOLLOWS)
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the City and Avanti have executed and delivered this Release
Agreement as of May 11, 2016.
City of McHenry,
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By: dg j
Susan E. Low, Mayor Date
McHenry Oaks (Chicago) ASLI VIII, LLC
By: Avanti Strategic Land Investors VIII,
L.L.L.P., a Delaware limited liability limited
partnership, its sole Member
By: APG ASLI VIII GP, LLC, a Delaware
limited liability company, its sole General Partner'
By: Avanti Properties Group III, L.L.L.P., a
Delaware limited liability limited partnership, its
Managing Member
By: APG III GP, LLC, a Florida limited liability
company, its sole General Partner
By: Avanti Management Corporation, a Florida
corporation, its sole Manager
Marvin M. Shapiro, President
EXHIBIT A
THE AVANTI PROPERTY
PARCEL 1:
LOTS 6, 8, 9, 21, 29, 37, 42, 44, 46, 47, 50, 51, 53, 54, 55, 56, 57, 63 THROUGH 77,
BOTH INCLUSIVE, 86 THROUGH 92, BOTH INCLUSIVE, 94 THROUGH 142, BOTH
INCLUSIVE, AND PARCELS 4 AND 6, IN THE OAKS AT IRISH PRAIRIE - UNIT 1,
BEING A SUBDIVISION OF PART OF SECTION 11, TOWNSHIP 44 NORTH, RANGE
8 EAST OF THE THIRD PRINCIPAL MERIDIAN, ACCORDING TO THE PLAT
THEREOF RECORDED OCTOBER 19, 2006 AS DOCUMENT 2006R0077160, AND
CERTIFICATE OF CORRECTION RECORDED OCTOBER 30, 2006 AS DOCUMENT
2006R0079583, AND CERTIFICATE OF CORRECTION RECORDED JULY 18, 2007
AS DOCUMENT 2007R0049725, IN MCHENRY COUNTY, ILLINOIS.
PARCEL 2:
LOTS 143 THROUGH 2O6, BOTH INCLUSIVE, IN THE OAKS AT IRISH PRAIRIE -
UNIT 2, BEING A SUBDIVISION OF PART OF THE SOUTHWEST QUARTER OF
SECTION 11, TOWNSHIP 44 NORTH, RANGE 8 EAST OF THE THIRD PRINCIPAL
MERIDIAN, ACCORDING TO THE PLAT THEREOF RECORDED OCTOBER 19, 2006
AS DOCUMENT 2006R0077162, IN MCHENRY COUNTY, ILLINOIS.
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EXHIBIT B
THE REPLACEMENT SECURITY
4830-1352-9136, v. 9
Sut'iip SUBDIVISION IMPROVEMENTS
"r 19L'4 PERFORMANCE AND PAYMENT BOND
Bond No. SEIFSU0625810
Initial Premium $3.864.00
Subject to Renewal
KNOW ALL MEN BY THESE PRESENTS: That we, McHenry Oaks (Chicago) ASLI VIH, L.L.C., as Principal, and
INTERNATIONAL FIDELITY INSURANCE COMPANY, a corporation duly authorized under the laws of the State of
New Jersey, as Surety, are held and firmly bound unto City of McHenry, as Obligee in the full, just and penal sum of Three
Hundred Eighty -Six Thousand Three Hundred and Eight -Four and 25/100 Dollars ($386,384.25) lawful money of the
United States of America, to be paid to the said Obligee, successors or assigns; for which payment, well and truly to be paid
unto said Obligee we jointly and severally bind ourselves, our successors and assigns.
Whereas, the Principal and Obligee have entered into an agreement dated May 2, 2016, and identified as The Oaks at Irish
Prairie, Unit IA, McHenry, Illinois ("Project"), which agreement is made apart hereto as if written herein at length, whereby
principal agrees to, on or before issuance by the City of McHenry of the 28 occupancy permit within Unit lA of the Project,
install and complete certain designated public improvements, and has further agreed as a condition of acceptance of the
designated public improvements that Principal shall have paid for all material used in constructing the designated
improvements, whether by subcontractor or otherwise(the "Principal's Obligations"); and
Whereas, said Principal is required under the terms of said agreement to furnish a bond securing the faithful performance of the
Principal's Obligations.
Now, Therefore, the condition of this Performance and Payment bond obligation is such that if the Principal, its successors or
assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions
of the Principal's Obligations and any amendments made as therein provided, on its part, to be kept and performed at the time
and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save
harmless the Obligee, its officers, agents and employees, as therein stipulated, then this obligation shall become null and void;
otherwise it shall be and remain in full force and effect.
As a part of the obligation secured hereby and in addition to the penal amount specified above, there shall be included costs
and reasonable expenses and fees, including reasonable attorney's fees, incurred by Obligee in successfully enforcing such
obligation, all to be taxed as costs and included in any judgment rendered. The parties agree Illinois law applies to this Bond
agreement and exclusive venue shall be in the 22nd Judicial Circuit Court, McHenry County, Illinois.
The surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Principal's
Obligations or to the work to be performed thereunder or the specifications accompanying the same shall in anywise affectits
obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the
terms of the agreement or to the work or to the specifications.
IN WITNESS WHEREOF, the seal and signature of said Principal is hereto affixed and the corporate seal and the name of
the Surety is hereto affixed and attested by its duly authorized Attorney -in -Fact at Sanford, Florida, this 91h day of May, 2016.
McHenry 0 Arica )! �"�[I, L; <v�C �/ %- Internai �a Fidelity Insurance Company
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ScctyaEul� SUBDIVISION IMPROVEMENTS
PERFORMANCE AND PAYMENT BOND
Bond No. SEIFSU0625811
Initial Premium $10,567.00
Subject to Renewal
KNOW ALL MEN BY THESE PRESENTS: That we, McHenry Oaks (Chicago) ASLI VIII, L.L.C., as Principal, and
INTERNATIONAL FIDELITY INSURANCE COMPANY, a corporation duly authorized under the laws of the State of
New Jersey, as Surety, are held and firmly bound unto City of McHenry, as Obligee in the full, just and penal sum of One
Million Fifty Six Thousand Six Hundred Fifty -Four and 09/160 Dollars ($1,056.654.09) lawful money of the United States
of America, to be paid to the said Obligee, successors or assigns; for which payment, well and truly. to be paid unto said
Obligee we jointly and severally bind ourselees, our successors and assigns.
Whereas, the Principal and Obligee have entered into an agreement dated May 2, 2016, and identified as The Oaks at Irish
Prairie, Unit 2, McHenry, Illinois ("Project"), which agreement is made apart hereto as if written herein at length, whereby
principal agrees to, on or before issuance by the City of McHenry of the 42nd occupancy permit within Unit 2 of the Project,
install and complete certain designated public improvements, and has further agreed as a condition of acceptance of the
designated public improvements that Principal shall have paid for all material used in constructing the designated
improvements, whether by subcontractor or otherwise (the "Principal's Obligations"); and '
Whereas, said Principal is required under the terms of said agreement to furnish a bond securing the faithful performance of the
Principal's Obligations.
Now, Therefore, the condition of this Performance and Payment bond obligation is such that if the Principal, its successors or.
assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions
of the Principal's Obligations and any amendments made as therein provided, on its part, to be kept and performed at the time
and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save
harmless the Obligee, its officers, agents and employees, as therein stipulated, then this obligation shall become null and void;
otherwise it shall be and remain in full force and effect.
As a part of the obligation secured hereby and in addition to the penal amount specified above, there shall be included costs
and reasonable expenses and fees, including reasonable attorney's fees, incurred by Obligee in successfully enforcing such
obligation, all to be taxed as costs and included in any judgment rendered. The parties agree Illinois law applies to this Bond
agreement and exclusive venue shall be in the 22nd Judicial Circuit Court, McHenry County, Illinois.
The surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Principal's
Obligations or to the work to be performed thereunder or the specifications accompanying the same shall in anywise affect its
obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the
terms of the agreement or to the work or to the specifications.
IN WITNESS WHEREOF, the seal and signature of said Principal is hereto affixed and the corporate seal and the name of
the Surety is hereto affixed and attested by its duly authorized Attomey-in-Fact at Sanford, Florida this 9`" day of May, 2016.
McHenry Oak is I V I, L.L.C.
By
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S((&&P&P SUBDIVISION IMPROVEMENTS
ouuer904 PERFORMANCE AND PAYMENT BOND
Bond No. SEIFSU0625812
Initial Premium $4,946.00
Subject to Renewal
KNOW ALL MEN BY THESE PRESENTS: That we, McHenry Oaks (Chicago) ASLI VIII, L.L.C., as Principal, and
INTERNATIONAL FIDELITY INSURANCE COMPANY, a corporation duly authorized under the laws of the State of
New Jersey, as Surety, are held and firmly bound unto City of McHenry, as Obligee in the full, just and penal sum of Four
Hundred Ninety Four Thousand Five Hundred Seventy Six and 21/100 Dollars ($494,576.21) lawful money of the United
States of America, to be paid to the said Obligee, successors or assigns; for which payment, well and truly. to be paid unto said
Obligee we jointly and severally bind ourselves, our successors and assigns.
Whereas, the Principal and Obligee have entered into an agreement dated May 2, 2016, and identified as The Oaks at Irish
Prairie, Barreville Road, McHenry, Illinois ("Project"), which agreement is made a part hereto as if written herein at length;
whereby principal agrees to, on or before issuance by the City of McHenry of the 42nd occupancy permit within Unit 2 of the
Project, install and complete certain designated public improvements, and has further agreed as a condition of acceptance of the
designated public improvements that Principal shall have paid for all material used in constructing the designated
improvements, whether by subcontractor or otherwise (the "Principal's Obligations"); and
Whereas, said Principal is required under the terms of said agreement to furnish a bond securing the faithful performance of the
Principal's Obligations,
Now, Therefore, the condition of this Performance and Payment bond obligation is such that if the Principal, its successors or
assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions
of the Principal's Obligations and any amendments made as therein provided, on its part, to be kept and performed at the time
and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save
harmless the Obligee, its officers, agents and employees, as therein stipulated, then this obligation shall become null and void;
otherwise it shall be and remain in full force and effect.
As a part of the obligation secured hereby and in addition to the penal amount specified above, there shall be included costs
and reasonable expenses and fees, including reasonable attorney's fees, incurred by Obligee in successfully enforcing such
obligation, all to be taxed as costs and included in any judgment rendered. The parties agree Illinois law applies to this Bond
agreement and exclusive venue shall be in the 22nd Judicial Circuit Court, McHenry County, Illinois.
The surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Principal's
Obligations or to the work to be performed thereunder or the specifications accompanying the same shall in anywise affect its
obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the
terms of the agreement or to the work or to the specifications.
IN WITNESS WHEREOF, the seal and signature of said Principal is hereto affixed and the corporate seal and the name of
the Surety is hereto affixed and attested by its duly authorized Attomey-in-Fact at Sanford, Florida, this 91h day of May, 2016.
McHenry Oaks (Chicago) ASLI VHI, IL.T�..C. Intern`io — idelity- 5urance CoWpany
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