HomeMy WebLinkAboutItem 04 Approval of a Two-Year Warranty Surety and Maintenance, Materials, and Workmanship Agreement with Meritage Homes of Florida, LLC for the Greens at Forest Lake Phase 1 4IP
ocoee
florida
AGENDA ITEM COVER SHEET
Meeting Date: September 1, 2020
Item #
Reviewed By:
Contact Name: Martrivus Keaton, Department Director: . �
Development Engineer
Contact Number: 407-554-7085 City Manager:
Subject: Approval of a Two-Year Warranty Surety and Maintenance, Materials, and Workmanship
Agreement with.Meritage Homes of Florida, Inc. for the Greens at Forest Lake Phase 1
Commission:District 1 — Larry Brinson, SR
Background Summary:
Greens at Forest Lake Phase 1 is made up of 128 townhomes. The parcel is located on the west side of State Road
429 just East of Arbours Apartments. The developer has completed construction of the infrastructure improvements
for the subdivision and has requested a Certificate of Completion. The infrastructure improvements include the
potable water, sanitary sewer, reclaimed water, utilities, the public roadways, stormwater collection system,
perimeter wall/fencing, and associated landscaping. All identified punch list repairs have been completed, and the
developer is ready to start the two-year warranty period for the public improvements.
As a requirement of the Land Development Code, the developer is required to furnish the City a Surety to cover
any possible damages discovered during the next two years. Should the developer not choose to make those
repairs, Meritage Homes of Florida, Inc, has provided the City with a Letter of Credit in the amount of 10% of the
constructed improvements. The attached Maintenance, Materials, and Workmanship Agreement (Form 8 from the
Land Development Code) acts as the executable document between the developer and the City. The Surety will be
returned to the developer upon completion of the two-year warranty period and the repair of any damages caused
over those two years.
Issue:
Should the City accept the Surety as provided by Meritage Homes of Florida, Inc, for the two-year warranty for
Greens at Forest Lake Phase 1 and execute the Maintenance, Materials, and Workmanship Agreement?
Recommendations:
The Development Services Department recommends the acceptance of the Surety and the execution of the
Maintenance, Materials, and Workmanship Agreement with Meritage Homes of Florida, Inc,for the Greens at Forest
Lake Phase 1.
Attachments:
1. Maintenance, Materials, and Workmanship Agreement with Meritage Homes of Florida, Inc.
2. Irrevocable Stand-By Letter of Credit Number 55109494 issued by Regions Bank.
Financial Impact:
There are no financial impacts to the City in accepting this two-year warranty Surety.
Type of Item: (please mark with an `x')
Public Hearing For Clerk's Dept Use:
Ordinance First Reading Consent Agenda
Ordinance Second Reading Public Hearing
Resolution Regular Agenda
X Commission Approval
Discussion&Direction
Original Document/Contract Attached for Execution by City Clerk
Original Document/Contract Held by Department for Execution
Reviewed by City Attorney N/A
Reviewed by Finance Dept. Rebecca Roberts (7/29/20) N/A
Reviewed by N/A
2
MAINTENANCE,MATERIALS,AND
WORKMANSHIP AGREEMENT WITH LETTER OF CREDIT
(SUBDIVISION NAME/PHASE: Greens at Forest Lake Phase 1)
THIS MAINTENANCE,MATERIALS,AND WORKMANSHIP AGREEMENT
(this"Agreement")is entered into this_ day of 2 2020, by Meritage Homes
of Florida Inc., a Home Builder(the"Developer")and the CITY OF OCOEE, a Florida
municipal corporation,whose address is 150 North Lakeshore Drive, Ocoee, Florida 34761 (the
"City").
WITNESSETH:
WHEREAS, Developer, or its predecessor-in-interest or its predecessor-in title, has
developed and/or constructed a subdivision known as Greens at Forest Lake Phase 1 (the
"Subdivision") and in connection therewith has installed with the approval of the City certain
roads, streets, sewer, water and reuse systems, drainage facilities(including retention and
detention ponds), and/or other improvements (collectively,the"Improvements")under the
provisions,conditions,and requirements of the City's Subdivision Regulations and the following
Final Subdivision Plan(or Preliminary/Final Subdivision Plan)approval by granted the Ocoee
City Commission on June 18th, 2019: Greens at Forest Lake PUD Preliminary/Final
Subdivision Plan.
WHEREAS,the Subdivision is located within certain real property located in the City of
Ocoee, Orange County, Florida, as more fully described in the attached Exhibit-"-Az'which
exhibit is incorporated herein by this reference(the"Property");and
WHEREAS,under Section 4-4, Subdivision Review Process,of the City's Land
Development Code,Developer is required to guaranty the maintenance,materials,and
workmanship of the Improvements within the Subdivision; and
WHEREAS, in order to obtain the issuance of a Certificate-of Completion with respect
to the Improvements, the Developer desires to guaranty such maintenance,materials, and
workmanship by having Regions (the"Bank") (or such other bank as may be acceptable to the
City) establish an Irrevocable Standby Letter of Credit in favor of the City in substantially the
form attached hereto as Exhibit"B and by this reference made a part hereof("Letter of
Credit").
NOW THEREFORE, the parties agree as follows:
SECTION ONE: Establishment of Letter of Credit.
Developer does hereby agree to have Bank establish the Letter of Credit in favor of the
City in the amount of ONE HUNDRED AND FOR1EEN THOUSAND EIGHTEEN_
DOLLARS AND 91 CENTS DOLLARS ($114,018.91)to guaranty the maintenance,materials,
workmanship, and structural integrity of the Improvements and the other obligations of the
Developer under this Agreement. The Letter of Credit shall be established and drawn upon only
in accordance with the terms of the Letter of Credit and this Agreement.
ORLA_1688244.1
SECTION TWO: 2-Year Warranty Period.
For a period of two (2)years from the date of issuance of the Certificate of Completion
(the"Warranty Period"), the Developer shall maintain the Improvements in a first class condition
and shall repair,correct and/or cure any Deficiency(as defined in Section 3 below)within thirty
(30)days of receipt of written notice of a Deficiency from the City. The Developer shall pay
any and all costs or expenses incidental to the performance of any such work. The City may
provide notices of a Deficiency from time to time during the Warranty Period.
SECTION THREE: City's Right to Draw on Letter of Credit.
If at any time during the Warranty Period, the City notifies Developer in writing (i)that
the Improvements have not been maintained in a first class condition, (ii)the improvements have
been found by the City to not be in compliance with the Subdivision approval, and/or(iii) that
there is a deficiency or fault in the materials,workmanship, or structural integrity of the
Improvements which has been found by the City to not be in compliance with the Subdivision
approval(collectively, a"Deficiency")and Developer fails to repair, correct and/or cure such
Deficiency to the satisfaction of the City within thirty (30) days from receipt of the notice thereof
as set forth in Section 2 above,then the City may draw upon the Letter of Credit without further
notice to Developer in order to establish a cash escrow for the performance of the Developer's
obligations under this Agreement(the"Cash Escrow").
Additionally,the City may draw on the Letter of Credit in order to establish a Cash
Escrow in such amounts as the City deems necessary or appropriate(a) in the event of a default
by Developer under this Agreement, and/or(b) as provided for in the Letter of Credit.
SECTION FOUR: Term of Letter of Credit.
The Letter of Credit shall be for a term of no less than two (2)years and one (1)month
from the date of issuance of the Certificate of Completion. Notwithstanding anything contained
in Section 3 above, in the event the City has notified Developer of a Deficiency as provided
above,then the term of this Agreement shall continue and the term of the Letter of Credit shall
be extended until such Deficiency is corrected. If the City has provided a notice of Deficiency
which has not been repaired, corrected and/or cured within thirty(30)days from the date the
Letter of Credit(or any extension or replacement thereof) is scheduled to expire,then the City
may draw on the Letter of Credit and establish a Cash Escrow for the performance of the
Developer's obligations under this Agreement.
SECTION FIVE: City's Use of Funds Drawn on Letter of Credit.
Unless otherwise mutually agreed to by City and Developer,the funds available through
the Letter of Credit and any Cash Escrow established under this Agreement shall be used by the
City only (a)to repair, correct and/or cure any Deficiency, (b)to cure a breach by Developer of
its obligations under this Agreement, and/or(c)to pay for reasonable administrative expenses
and attorneys' fees and costs incurred by the City in exercising or otherwise enforcing its rights
under this Agreement and Letter of Credit.
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ORIA 1688244.1
If the Developer fails or refuses to undertake the repair, correction and/or cure of any
Deficiency,then the City may, but shall not be obligated to,undertake such repair, correction
and/or cure any Deficiency,the cost of which shall be paid for out of the Letter of Credit and any
Cash Escrow established pursuant to this Agreement. In the event the City undertakes any such
repair, correction and/or cure,then the City shall be entitled to retain an administrative fee in the
amount of two percent(2%) of the cost thereof and shall also be entitled to reimbursement of all
costs and expenses incurred by the City in undertaking such action, including but not limited to
its legal fees and costs. The City may use third party contractors to perform any such corrective
actions.
SECTION SIX: Right of Entry for Corrective Activities.
In the event the City undertakes to repair, correct and/or cure any Deficiency,then in
such event the Developer hereby grants to the City and its employees, contractors and
representatives,the right to enter upon the Property and the Improvements for the purpose of
performing any such repair, correction,and/or cure.
SECTION SEVEN: No Obligation of City to Undertake Repairs or Advance
Funds.
Nothing contained herein shall be construed to in any way obligate the City to(i) advance
City funds for any purpose on behalf of the Developer, or(ii)to undertake the repair, correction
and/or cure of any Deficiency. Further,the City shall have no liability to the Developer or any
third parties with respect to any corrective actions undertaken by the City.
SECTION EIGHT: Excess Funds.
In the event that the City draws on the Letter of Credit and establishes the Cash Escrow,
then any excess funds shall be returned to the Developer after any and all of the Deficiencies
have been repaired, corrected and cured to the satisfaction of the City and after the payment from
the Cash Escrow of all obligations of the Developer under this Agreement.
SECTION NINE: Continued Applicability of Subdivision Regulations.
This Agreement shall not be construed to relieve or release Developer from any of its
obligations under the City Subdivision Regulations with respect to the Improvements.
SECTION TEN: Construction.
This Agreement shall be construed in accordance with the laws of the State of Florida.
IN WITNESS WHEREOF,the parties hereto have caused these presents to be signed as
of the date and year first above written.
DEVELOPER:
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ORLA_1688244.1
n
By: • ."-
Pri N Brian Kittl
Title: ivision Preside
CITY:
ATTEST:
CITY OF OCOEE,FLORIDA, a Florida
municipal corporation
By:
Melanie Sibbitt, City Clerk By:
Rusty Johnson, Mayor
(SEAL)
FOR THE USE AND RELIANCE BY THE APPROVED BY THE OCOEE CITY
CITY OF OCOEE ONLY. APPROVED COMMISSION AT A MEETING
AS TO FORM AND LEGALITY HELD ON , 20
this day of UNDER AGENDA ITEM NO.
20_
SHUFFIELD,LOWMAN& WILSON,P.A.
By:
City Attorney
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ORLA 1688244.1
EXHIBIT"A"
(Legal Description of Real Property Constituting the Subdivision)
Parcel 1:
A portion of the Northwest 1/4 of Section 5,Township 22 South,Range 28 East. Orange County,Florida,
being more particularly described as follows:
Commence at the Northwest corner of said Section 5;thence rvn North 84"37'17"East along the North
line of said Section 5,a distance of 1328.51 feet to the Northeast comer of the Northwest 1/4 of the
Northwest 1/4 of said Section 5;thence run South 02'44'11"West along the East line of the West 1/2 of
the Northwest 1/4 of said Section 5,a distance of 1347.69 feet for the Point of Beginning,•thence
continue South 02"44'11"West, along the East line of the West 1/2 of the Northwest 1/4 of said Section
5, distance of 527.57 feet to a point on a curve,concave Northwesterly,having a radius of 1759.86 feet
and a central angle of 32"51'50❑• thence departing the East line of the West 1/2 of the Northwest 1/4 of
said Section 5,from a tangent bearing
of South 27".35'43"West run Southwesterly along the arc of said curve, a distance of 1009.43 feet to a
po;nt on said curve;thence departing said curve run South 73'33'19"West 32.14 feet to the West line of
the East 1/2 of the Southwest 1/4 of the Northwest 1/4 of said Section 5;thence North 03'24'25"East
along the West line of the East 1/2 of the Southwest 1/4 of the Northwest 1/4 of said Section 5,a distance
of 1233.83 feet to the North line of the Southwest 1/4 of the Northwest 1/4 of said Section 5;thence run
North 88.,6'38" East along the North
li'ns of the Southwest 1/4 of the Northwest 1/4 of said Section 5,a distance of 674.96 feet to the Point of
Beginning.
Parco/2:
The West 1/2 of the Southwest 1/4 of the Northwest 1/4 of Section 5,Township 22 South,Range 28 East,
Orange County,Florida, lying northerly of the Western Beltway.
Less and Except:
Begin at the NW corner of the SW 1/4 of the NW 1/4 of Section 5,Township 22 South,Range 28 East,
run thence Southerly on the West line of said Section 200 feet;thence South 87'53'03"East 40 feet;
thence Northwesterly 204 feet.more or less to the Poi'ntof Beginning.
Also,Less and Except:
Begin at a point 30 feet North of the SW corner of the West 1/2 of the SW 1/4 of the NW 1/4 of Section 5,
Township 22 South,Range 28 East,Orange County.Florida,proceed North 89'16'00"East 400 feet,
thence North 550 feet,thence Westerly 400 feet,thence Southerly 558 feet along the West line to the
Paint of Beginning.
Parcel 3:
BEGIN at the Northwest corner of the Southwest 1/4 of the Northwest 1/4 of Section 5,Township 22
South,Range 28 East,Orange County.Florida;run thence Southerly on the West line of said Section 200
feet;thence South 87"53'03"East 40.00 feet; thence Northwesterly 204 feet more or less,to the POINT
OF BEGINNING.
-5-
ORLA_1688244.1
EXHIBIT"B"
FORM OF LETTER OF CREDIT
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ORLA_1688244.1 I
Av
; REGIONS
201 MILAN PARKWAY, 1ST FLOOR, BIRMINGHAM, AL 35211.
S.W.I.F.T. UPNBUS44XXX
PHONE (866) 828-6928 FAX (205) 420-6019
IRREVOCABLE STANDBY LETTER OF CREDIT NO. 55109494
DATE: 05/27/2020
EXPIRY DATE: 05/31/2022
BENEFICIARY:
CITY OF OCOEE
150 NORTH LAKESHORE DRIVE
OCOEE, FL 34761
ATTN: CITY ENGINEER
ACCOUNT PARTY:
MERITAGE HOMES OF FLORIDA, INC
8800 EAST RAINTREE SUITE 300
SCOTTSDALE, AZ 85260
PROJECT NAME: GREENS AT FOREST LAKE, PHASE 1
AMOUNT: $114, 018. 91 (ONE HUNDRED FOURTEEN THOUSAND EIGHTEEN 91/100 U.S.
DOLLARS)
WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER
55109494, IN FAVOR OF THE CITY OF OCOEE, A FLORIDA MUNICIPAL CORPORATION
AND AUTHORIZE YOU TO DRAW ON REGIONS BANK, 252 OCOEE APOPKA RD, OCOEE,
FL 34761, ATTENTION: BRANCH MANAGER, BY ORDER OF MERITAGE HOMES OF
FLORIDA, INC. , UP TO BUT NOT EXCEEDING THE AGGREGATE AMOUNT OF
$114, 018. 91 (ONE HUNDRED FOURTEEN THOUSAND EIGHTEEN 91/100 U.S. DOLLARS)
IN UNITED STATES FUNDS, WHICH IS AVAILABLE BY YOUR DRAFT AT SIGHT, WHEN
ACCOMPANIED BY THIS LETTER OF CREDIT AND ANY ONE OF THE FOLLOWING
DOCUMENTS:
1. A STATEMENT PURPORTEDLY SIGNED BY THE MAYOR, CITY MANAGER OR
AUTHORIZED REPRESENTATIVE TO THE EFFECT THAT THE CITY IS ENTITLED TO
DRAW UPON THE LETTER OF CREDIT PURSUANT TO THE TERMS OF THAT CERTAIN
MAINTENANCE, MATERIALS AND WORKMANSHIP AGREEMENT BETWEEN THE CITY AND
ACCOUNT PARTY WITH RESPECT TO THE FOLLOWING SUBDIVISION: GREENS AT
FOREST LAKE, PHASE 1; OR
2. A STATEMENT PURPORTEDLY SIGNED BY THE MAYOR, CITY MANAGER OR
AUTHORIZED REPRESENTATIVE TO THE EFFECT THAT THE PERFORMANCE OF ACCOUNT
PARTY'S OBLIGATION UNDER THE MAINTENANCE, MATERIALS AND WORMANSHIP
AGREEMENT HAS NOT BEEN COMPLETED YET AND THE LETTER OF CREDIT WILL
EXPIRE WITHIN 30 DAYS FROM THE DATE OF THE DRAWING WITHOUT BEING
EXTENDED OR REPLACED TO THE CITY'S SATISFACTION; OR
3. A STATEMENT PURPORTEDLY SIGNED BY THE MAYOR, CITY MANAGER OR
AUTHORIZED REPRESENTATIVE TO THE EFFECT THAT REGIONS BANK HAS LOST ITS
DESIGNATION AS A "QUALIFIED PUBLIC DEPOSITORY" PURSUANT TO FLORIDA
STATUTES, CHAPTER 280, AND AN ACCEPTABLE REPLACEMENT LETTER OF CREDIT
HAS NOT BEEN RECEIVED.
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ACIPA. REGIONS®
Our reference Number: 55109494
Page: 2
THIS LETTER OF CREDIT SHALL BE DEEMED IN FORCE UNTIL MAY 31, 2022, AND
WILL BE AUTOMATICALLY EXTENDED FOR A PERIOD NOT TO EXCEED NINETY (90)
DAYS WITHOUT AMENDMENT UNLESS WE PROVIDE THE CITY MANAGER OF THE CITY OF
OCOEE WITH WRITTEN NOTICE OF OUR INTENT TO TERMINATE THE CREDIT HEREIN
EXTENDED, WHICH NOTICE MUST BE PROVIDED AT LEAST THIRTY (30) DAYS PRIOR
TO THE EXPIRATION DATE OF THE ORIGINAL TERM HEREOF OR ANY RENEWED TERM.
DRAFTS MUST BEAR THE CLAUSE: "DRAWN UNDER LETTER OF CREDIT 55109494 OF
REGIONS BANK, DATED 05/27/2020. "
THIS LETTER OF CREDIT SHALL REMAIN IN FULL FORCE AND EFFECT
NOTHWITHSTANDING A PARTIAL DRAW OR DRAWS SO LONG AS THE SUM REMAINS TO
BE DRAWN OR TIL THE LETTER OF CREDIT HAS EXPIRED. EXCEPT AS OTHERWISE
SPECIFICALLY STATED HEREIN, THIS LETTER OF CREDIT SETS FORTH IN FULL THE
TERMS OF OUR UNDERTAKING, AND SUCH UNDERTAKING SHALL NOT IN ANY WAY BE
MODIFIED, AMENDED, OR AMPLIFIED BY REFERENCE TO ANY DOCUMENT,
INSTRUMENT, OR AGREEMENT REFERENCED TO HEREIN OR IN WHICH THIS LETTER OF
CREDIT IS REFERRED TO OR THIS LETTER OF CREDIT RELATES, AND ANY SUCH
REFERENCE SHALL NOT BE DEEMED TO INCORPORATE HEREIN BY REFERENCE ANY
DOCUMENT, INSTRUMENT, OR AGREEMENT.
WE HEREBY AGREE WITH THE DRAWERS, ENDORSERS, AND BONA FIDE HOLDERS OF
ALL DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS LETTER
OF CREDIT, THAT SUCH DRAFTS WILL BE DULY HONORED UPON PRESENTATION TO
THE REGIONS BANK, 252 OCOEE APOPKA RD, OCOEE, FL 34761 ATTENTION: BRANCH
MANAGER.
THIS LETTER OF CREDIT IS CONSIDERED AS CANCELLED UPON RECEIPT BY US OF
THE ORIGINAL CREDIT INSTRUMENT OR UPON ANY PRESENT OR FUTURE EXPIRY DATE
HEREUNDER, WHICHEVER SHALL OCCUR FIRST.
THIS LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES
(ISP98) 'INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 590 AND AS TO
MATTERS NOT GOVERNED BY ISP98, SHALL. BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE PROVISIONS OF FLORIDA LAW. IF A CONFLICT BETWEEN
THE "INERNATIONAL STANDBY PRACTICES (ISP98) " AND FLORIDA LAW SHOULD
ARISE, FLORIDA LAW SHALL PREVAIL. IF A CONFLICT BETWEEN THE LAW OF
ANOTHER STATE OR COUNTRY AND FLORIDA LAW SHALL ARISE, FLORIDA LAW SHALL
PREVAIL.
VERY TRULY YOURS,
AUTHORIZED SIGNATURE
ISSUER: REGIONS BANK
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