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HomeMy WebLinkAboutItem 03 Approval of a Two-Year Warranty Surety and Maintenance, Materials, and Workmanship Agreement with Meritage Homes of Florida, Inc., for Prairie Meadows PUDI101id11 AGENDA ITEM COVER SHEET Meeting Date: August 3, 2021 Item # 3 Contact Name: Martrivus Keaton Contact Number: 407-554-7109 Reviewed By: Department Director: Mich City Manager: Robert Fr Subject: Approval of a Two -Year Warranty Surety and Maintenance, Materials, and Workmanship Agreement with Meritage Homes of Florida, Inc. for Prairie Meadows PUD Commission District 4 — Georqe Oliver III Background Summary: Prairie Meadows Subdivision located near the corner of A. D. Mims Rd. and North Clarke Rd. next to the Prairie Lake Reserve Subdivision on Ocoee Vista Pkwy. The subdivison will consist of 78 luxury townhomes. The infrastructure improvements include the potable water, sanitary sewer, reclaimed water, other private utilities, the roadways, stormwater collection system, perimeter wall/fencing, and associated landscaping. Identified punch list repairs are currently being completed, and the developer is nearly 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 Letter of Credit provided is for a grand total of $38,405.04. The attached Maintenance, Materials, and Workmanship Agreements (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 Prairie Meadows PUD 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 Prairie Meadows PUD. Attachments: 1. Maintenance, Materials, and Workmanship Agreement with Meritage Homes of Florida, Inc. 2. Irrevocable Stand -By Letter of Credit Number 55109942 issued by Regions Bank. Financial Impact: There are no financial impacts to the City in accepting this two-year warranty Surety. Type of Item: X (please mark with an 'Y) Public Hearing Ordinance First Reading Ordinance Second Reading Resolution Commission Approval Discussion & Direction Original DocumenUContract Attached for Execution by City Clerk Original DocumenUContract Held by Department for Execution: For Cleric's Dept Use: JUConsent Agenda Public Hearing Regular Agenda Reviewed by City Attorney N/A Reviewed by Finance Dept. Talh.a-A.l -sayeed (7/28/21) N/A .. ........................... Reviewed by N/A 2 MAINTENANCE, MATERIALS, AND WORICV1ANSHIP AGREEMENT WITH LETTER OF CREDIT (SUBDIVISION NAME / PHASE: Prairie Meadows THIS MAINTENANCE, MATERIALS, AND WORKMANSHIP AGREEMENT (this "Agreement") is entered into this day of 1 2021, by Meritage Homes, 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 Prairie Meadows (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 July, 20tb, 202 1: [Insert Description of or PIRSP, as applicable] - and 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 "A". 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 fi-riprovernents 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 Batik (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 forin 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 Batik establish the Letter of Credit in favor of the City in the amount of thirty-eight thousand four hundred five and 04/100 DOLLARS ($38,405.04) 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 ORLA1688244.1 Credit shall be established and drawn upon only in accordance with the terms of the Letter of Credit and this Agreement. 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 Cityo 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: Cily'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 linprovements have not been maintained in a first class condition, (ii) that paving or other structures within the Subdivision have been Bound 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 fi-om 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: Terns 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 fi-om 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: Citv'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 Agreel-nent 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 -2- ORLA16882441 and attorneys' fees and costs incurred by the City in exercising or otherwise enforcing its rights under this Agreement and Letter of Credit. 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/of cure any Deficiency, the cost of which shall be paid for out of' th c- 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 RIGHT: 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 h-nprovements. SECTION TEN: Construction. This Agreement shall be construed in accordance with the laws of the State of Florida. -3- ORLA1688244A IN WITNESS WHEREOF, the parties hereto have caused these presents to be signed as of the date and year first above written. ATTEST: M Melanie Sibbitt, City Clerk (SEAL) FOR THE USE AND RELIANCE BY THE CITY OF OCOEE ONLY, APPROVED AS TO FORM AND LEGALITY this day of --, 20_, SHUFFIELD, LOWMAN & WILSON, P.A. ME City Attorney DEVELOPER: By: Print Name,, Jcrerr C Title: Vice President o Und-Developn-tent CITY OF OCOEE, FLORIDA, a Florida municipal corporation M Rusty Johnson, Mayor APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON , 20_ UNDER AGENDA ITEM NO. -4- ORLA1688244A 10:4:11 a I 574M (Legal Description of Real Property,Constituting the Subdivision DESCRIPTION: A PORTION OF SECTION 9, TOWNSHIP 22 SOUTH, RANGE 28 EAST, ORANGE COUNTY, FLORIDA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCE AT THE INTERSECTION OF THE EAST RIGHT OF WAY LINE OF CLARKE ROAD AS DESCRIBED IN OFFICIAL RECORDS BOOK 5076, PAGES 4514 THROUGH 4525, PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA AND THE NORTH RIGHT OF WAY LINE OF THE SEABOARD SYSTEM RAILROAD; THENCE N14°39'44"W ALONG SAID EAST RIGHT OF WAY LIME A DISTANCE OF 324.80 FEET TO THE POINT OF CURVATURE OF A CURVE CONCAVE EASTERLY; THENCE CONTINUE NORTHERLY ALONG SAID EASTERLY RIGHT OF WAY LINE HAVING A CENTRAL ANGLE OF 01042'25" AND A RADIUS OF 2439.25 FEET, AN ARC LENGTH OF 72.67 FEET, A CHORD BEARING OF N13448'31"W AND A CHORD DISTANCE OF 72,67 FEET TO A NON -TANGENT CURVE CONCAVE EASTERLY; THENCE CONTINUE NORTHERLY ALONG SAID EASTERLY RIGHT OF WAY LINE, HAVING A CENTRAL ANGLE OF 09-24"01", A RADIUS OF 3224.05 FEET, AN ARC LENGTH OF 528.95 FEET, A CHORD BEARING OF N06°26`20"W AND A CHORD DISTANCE OF 528.36 FEET; THENCE CONTINUE ALONG SAID EASTERLY RIGHT OF WAY LINE, N43-48'56"E, 35.19 FEET; THENCE LEAVING SAID EASTERLY RIGHT OF WAY LINE, RUN N89°14'07"E A DISTANCE OF 207.50 FEET TO THE POINT OF BEGINNING; THENCE CONTINUE N89°14'07"'E, 48.55 FEET, TO A CURVE CONCAVE SOUTHERLY; THENCE RUN SOUTHEASTERLY ALONG SAID CURVE HAVING A CENTRAL ANGLE OF 90°31'23", A RADIUS OF 555.00 FEET, AN ARC DISTANCE OF 876.86 FEET, A CHORD BEARING OF S45®30'12"E AND A CHORD DISTANCE OF 788.46 FEET; THENCE RUN SOO°14"30"E, 206.90 FEET TO THE NORTH RIGHT OF WAY OF AFORESAID SEABOARD SYSTEM RAILROAD; THENCE RUN S75"20'54"W, ALONG SAID NORTH RIGHT OF WAY LINE, 431.65 FEET; THENCE RUN N14°39'06"W, 483.56 FEET; THENCE RUN S80029'53"W, 67.32 FEET; THENCE RUN N00'45'53"W, 411.36 FEET TO THE POINT OF G el00LIIr id TOGETHER WITH A NON-EXCLUSIVE 'EASEMENT FOR THE BENEFIT OF THE ABOVE DESCRIBED PARCEL AS CREATED BY AND SET FORTH IN 'THAT CERTAIN DRAINAGE AND UTILITY EASEMENT AGREEMENT BY AND BETWEEN I THE CITY OF OCOEE AND SILVESTRI INVESTMENTS OF FLORIDA INC. RECORDED IN OFFICIAL RECORDS BOOK 5076, PAGE 4501, OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA. THE ABOVE DESCRIBED PARCEL OF LAND CONTAINS 8.703 ACRES MORE OR LESS. -5- ORLA 1688244.1 FORM OF LETTER OF CREDIT (See Following Pagel ORLA1688244.1 I k1l 1900 5TH AVE NORTH, UPPER LOBBY, BIRMINGHAM, AL 35203. S,W,I.F'.T. UPNBUS44XXX PHONE (866)828-6928 FAX (205)264-0801 IRREVOCABLE STANDBY LETTER OF CREDIT NO, 551.09942 DATE: 07/14/2021 EXPIRY DATE: 07/31/2023 BENEFICIARY: CITY OF OCOEE 150 NORTH LAKESHORE DRIVE OCOEE, FL 34-161 ATTN: OCOEE DEVELOPMENT SERVICES DEPARTMENT ACCOUNT PARTY: MERTTAGE HOMES OF FLORIDA, INC. 8800 EAST RAINTREE SUITE 300 SCOTTSDALE, Al 85260 PROJECT NAME: PRAIRIE LAKE 056A AMOUNT: $38,405.04 (THIRTY EIGHT THOUSAND FOUR HUNDRED FIVE AND 04/100 U,S, DOLLARS) AT THE REQUEST AND FOR THE ACCOUNT OF HERITAGE HOMES OF FLORIDA, INC. ("ACCOUNT PARTY"), WE, REGIONS BANK ("ISSUER"), HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. 55109942, IN FAVOR OF THE CITY OF OCOEE, A CHARTER COUNTY AND POLITICAL SUBDIVISION OF THE STATE OF FLORIDA ("BENEFICIARY"), AND AUTHORIZE YOU TO DRAW ON ISSUER, IN THE MAXIMUM AGGREGATE AMOUNT OF $38,405.04 (THIRTY EIGHT THOUSAND FOUR HUNDRED FIVE AND 04/100 U.S. DOLLARS), IN UNITED STATES FUNDS, WHICH IS PAYABLE AT SIGHT AGAINST PRESENTATION OF YOUR DEMAND, WHEN ACCOMPANIED BY THIS LETTER OF CREDIT AND ANY OF THE FOLLOWING DOCUMENTS: 1. A STATEMENT PURPORTEDLY SIGNED BY THE CITY OF' OCOEE MAYOR, OR AUTHORIZED REPRESENTATIVE READING AS FOLLOWS: "THE PERFORMANCE OF THE ACCOUNT PARTY'S OBLIGATION HAS NOT BEEN COMPLETED YET AND THE LETTER OF CREDIT WILL EXPIRE WITHIN 45 DAYS FROM THE DATE OF DRAWING WITHOUT BEING EXTENDED OR REPLACED TO THE COUNTY' S SATISFACTION;" OR 2. A STATEMENT SIGNED BY THE CITY OF OCOEE MAYOR, OR AUTHORIZED REPRESENTATIVE READING AS FOLLOWS: "ISSUER HAS LOST ITS DESIGNATION AS A "QUALIFIED PUBLIC DEPOSITORY" PURSUANT TO FLORIDA STATUTES, CHAPER 280, AND AN ACCEPTABLE REPLACEMENT LETTFR OF CREDIT HAS NOT BEEN RECEIVED BY THE COUNTY FOLLOWING NOTICE TO THE ACCOUNT PARTY;" OR 3. A STATEMENT PURPORTEDLY SIG-NED BY THE CITY OF OCOEE MAYOR, OR AUTHORIZED REPRESENTATIVE READING AS FOLLOWS: "THE DRAWING IS DUE TO ACCOUNT PARTY'S FAILURE TO HAVE PROPERLY PERFORMED SITE WORK AND LANDSCAPING IMPROVEMENTS FOR PRAIRIE LAKE 056A (HEREINAFTER, THE "IMPROVEMENTS") AND MAINTAIN SAID IMPROVEMENTS FOR A ONE (1) YEAR PERIOD FOLLOWING ISSUANCE OF' A CERTIFICATE OF COMPLETION FOR SUCH IMPROVEMENTS, SPECIFICALLY, THE STATEMENT SHALL BE TO THE EFFECT THAT: "THE MATERIALS, WORKMANSHIP, STRUCTURAL INTEGRITY, FUNCTIONING, AND/OR MAINTENANCE Page 1. of 3 Our reference Number: 55109942 Page: 2 (MAINTENANCE REQUIRED TO ENSURE PROPER OPERATION) OF THE IMPROVEMENTS HAS BEEN DETERMINED TO BE UNACCEPTABLE, AND SUCH CONDITIONS) HAS NOT BEEN CORRECTED DESPITE NOTIFICATION TO THE. DEVELOPER." AND FURTHER STATING THE SUMS DUE AS A RESULT OF SUCH DEFAULT TO DEFRAY THE ESTIMATED COST OF REPAIRS TO THE IMPROVEMENTS, A SUM NOT TO EXCEED $38,405.04 (THIRTY EIGHT THOUSAND POUR HUNDRED FIVE AND 04/:1.00 U.S. DOLLARS) SHALL BE AVAILABLE FOR PARTIAL OR FULL DRAW BY PRESENTATION OF YOUR DEMAND AT SIGHT IF ACCOMPANIED BY A WRITTEN STATEMENT AS DESCRIBED IN 'T"HIS PRECEDING PARAGRAPHS. THIS LETTER OF CREDITSHALL BE IN FULL FORCE AND EFFECT UNTIL JULY 31, 2023 AND WILL BE AUTOMATICALLY BE EXTENDED WITHOUT AMENDMENT FOR ONE NINETY (90) DAY PERIOD, UNLESS WE PROVIDE THE BENEFICIARY 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 EXTENDED TERM. DRAWS MUST BE PRESENTED NO LINER THAN JULY 31, 2023, OR ANY EXTENDED EXPIRATION DATE, AND MUST BEAR THE CLAUSE: ""DRAWN UNDER LETTER OF CREDIT NO. 55109942 OF REGIONS BANK, DATED 07/14/2021" PARTIAL AND MULTIPLE DRAWINGS ARE PERMITTED, PROVIDED, HOWEVER, THAT ANY PAYMENT MADE UNDER THIS LETTER OF CREDIT SHALL REDUCE THE AMOUNT AVAILABLE UNDER IT. WE, THE ISSUER, HEREBY AGREE THAT ALL DRAWS PRESENTED UNDER AND IN COMPLIANCE WITH THE "PERMS OF THIS LETTER OF CREDIT SHALL BE DULY HONORED UPON PRESENTATION TO REGIONS BANK, 252 OCOEE APOPKA RD, OCOEE, FL 34`i61, ATTENTION BRANCH MANAGER. THIS LETTER OF CREDIT WILL BE CONSIDERED AS CANCELLED UPON RECEIPT BY US. OF THE ORIGINAL LETTER OF CREDIT OR UPON ANY PRESENT OR FUTURE EXPIRY DATE HEREUNDER, WHICHEVER SHALL OCCUR FIRST, THIS LETTER OF CREDIT IS SUBJECT TO THE "INTERNATIONAL STANDBY PRACTICES 1998 (ISP98)", (INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 590) AND TO THE PROVISIONS OF FLORIDA LAW. IF A CONFLICT BETWEEN INTERNATIONAL, STANDBY PRACTICES (ISP98)", AND FLORIDA LAW SHOULD ARISE, FLORIDA LAW SHALL PREVAIL. Page 2 of 3 Our reference Number: 55109942 Page: 3 IF A CONFLICT BETWEEN FLORIDA LAW AND THE LAW OF ANOTHER STATE OR COUNTRY SHALL ARISE, FLORIDA LAW SHALL PREVAIL. VERY TRULY YOURS, AllyfHORIZED SIGNATURE ; REGIONS BANK ✓ I --v- - Q LCA--- -- N-t�-L- AUTHORIZED SIGNATURE REGIONS BANK Page 3 of 3