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HomeMy WebLinkAboutItem 06 Approval of a Two-Year Warranty Surety and Maintenance, Materials, and Workmanship Agreement for VMG Shoppes (fka 4 Locos Taco)Meeting Date: August 1, 2023 Item #: 6 Contact Name: Martrivus Keaton Department Director: Michael Rumer Contact Number: Ext. 1088 City Manager: Robert Frank Subject: Approval of a Two -Year Warranty Surety and Maintenance, Materials, and Workmanship Agreement for VMG Shoppes (fka 4 Locos Taco). (Development Engineer Keaton) Background Summary: VMG Shoppes is located on the northwest corner at the intersection of Silver Star Rd. and N Cumberland Ave. The property consists of (1) 6,000 square foot office building. The infrastructure improvements include public roadways, potable water, sanitary sewer, other private utilities, stormwater collection system, 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 with a Surety to cover any possible damages discovered during the next two years. Should the developer not choose to make those repairs, VMG Construction, Inc., has provided the City with an Escrow in the amount of 10% of the constructed improvements cost of $130,947.30. The Escrow provided is for a total of $13,094.73. The attached Maintenance, Materials, and Workmanship Agreement (Form 8 from the Land Development Code) act 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 VMG Construction, Inc., for the two-year warranty for VMG Shoppes and execute the Maintenance, Materials, and Workmanship Agreement? Recommendations: The Development Services Department recommends the Honorable Mayor and City Commissioners approve the Surety and the Maintenance, Materials, and Workmanship Agreement with VMG Construction, Inc., for VMG Shoppes. Attachments: 1. VMG MMW Agreement 2. VMG Letter of Credit City of Ocoee • • Avenue - • •-- Florida 34761 • - 4091 ii • •-- • • Page 56 of 163 Financial Impacts: There are no financial impacts to the City in accepting this two-year warranty Surety. Type of Item: Consent City of Ocoee - 1 N. Bluford Avenue - Ocoee, Florida 34761 Phone: (407) 905-3100 - www.ocoee.org Page 57 of 163 (SUBDIVISION NAME / PHASE: (this "Agreement") is entered into this — day of 2023, by VMG , Investment Development, Inc., a _Corporation, (the "Developer") and the CITY OF OCOEE, a Florida municipal corporation, whose address is I North Bluford Ave, 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 VMG Investment Development, Inc., (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, (permit issued 08/06, 2021): [Insert Description ofFSP or PIFSP, 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 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 Wells Fargo Bank, (the "Bank") (or such other bank, as may be acceptable to the City) establish an In -evocable 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 Thirteen Thousand Ninety -Four Dollars Seventy -Three Cents ($13,094.73) 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 ORLA1688244A Page 58 of 163 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 Warrantv 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. 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) that paving or other structures within the Subdivision 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 (3 0) 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: 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 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 M ORLA-1 688244.1 Page 59 of 163 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/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 patty contractors to perform any such corrective actions. SECTION SIX: RiLyht 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 Oblivation of Citv to Undertake Repairs or Advance, 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. 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 Applicabilitv 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. -3- ORLA1688244.1 Page 60 of 163 IN WITNESS WHEREOF, the parties hereto have caused these presents to be signed as of the date and year first above written. State of Florida County of Orange Subscribed and sworn to before me this -Q-?- Day of JUNE 2023. Notary Public:- -- Commission Expires: una NU.",,, jissELVILLANUEVA HI $48240 WCOMMISSIoNOHIOM48240 EXPIRE$: Apdl 27,2024 ATTEST: By: 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 1 20_. SHUFFIELD, LOWMAN & WILSON, P.A. in. City Attorney VMG Investment Development, Inc.. a Florida Coipordtiqn By: Print Name: PrAx\'(An (--lCOVOLn Title: C e 1D CITY: CITY OF OCOEE, FLORIDA, a Florida municipal corporation 0 Rusty Johnson, Mayor APPROVED BY THE OCOEE CITY COMMISSION AT A MEETING HELD ON 20_ UNDER AGENDA ITEM NO. ORLA1688244.1 -4- Page 61 of 163 (Legal Description of Real Property Constituting the Subdivision) Property Description: Ruben Keglers Sub A/ 118 Lots 17 & 18 LYING E OF F M RY (LESS ST RD R/W ON S) SEE 6255/5875 Parcel Number: 18-22-28-4100-00-171 11J� ol h K C L A h h E THL —M. 3 0( OCE, FL,4� Z 4 RUBEN KEG1,ETi',3 SUWAVISION 462 a4a1 fth� N. S,E,i L',.,S-18-T.22S.-R.28 E. s11 12 13 14 15 C)COLE ILA. 11"MVf,.IMI I-". � ORLA1688244.1 Page 62 of 163 ID) NO KII-0 m No WOMEN (See Follo`vine Pn-e) -6- ORLA_1688244.1 Page 63 of 163 BENEFICIARY CITY OF OCOEE 150 NORTH LAKESHORE DRIVE ATTN: CITY ENGINEER OCOEE, FLORIDA 34761 LADIES AND GENTLEMEN: Wells Fargo Bank, N.A. U.S. Trade Serkzces Standby Letters of Credit .}ot N. Research PkxNi-, ist Floor D1AC D-}oo.}-oi Winston-tialein, NC 2; toz-415 Phone: t(Roo) 776-:3862 Option 2 E-3Lii1: Standbn('ustomerC"aret,i irellsi:{rgo.coni Irrevocable Standby Letter Of Credit i11 IssueDate:! VMG CONSTRUCTION, f FIRST STREET WINTER GARDEN, FLORIDA 34787 105Y* ��e:�I.i'Lr�J>lle�lle�.l7.i�►.Tii►l9 WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT IS000381171 U, IN FAVOR OF CITY OF OCOEE, A FLORIDA MUNICIPAL CORPORATION, AND AUTHORIZE YOU TO DRAW ON WELLS FARGO BANK, N.A. (THE "BANK"), AT401 N RESEARCH PARKWAY, WINSTON-SALEM, NC 27101-4157. BY ORDER OF VMG CONSTRUCTION, INC. UP TO BUT NOT EXCEEDING THE AGGREGATE AMOUNT OF THIRTEEN THOUSAND NINETY FOUR AND 73/100 U.S.DOLLARS ($13,094.73), 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 APPLICANT WITH RESPECT TO THE FOLLOWING SUBDIVISION: VMG RETAIL; OR 2. A STATEMENT PURPORTEDLY SIGNED BY THE MAYOR, CITY MANAGER OR AUTHORIZED REPRESENTATIVE TO THE EFFECT THAT THE PERFORMANCE OF APPLICANT'S OBLIGATION UNDER THE MAINTENANCE, MATERIALS AND WORKMANSHIP 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 WELLS FARGO BANK, N.A. HAS LOST ITS DESIGNATION AS A "QUALIFIED PUBLIC DEPOSITORY" PURSUANT TO FLORIDA STATUTES, CHAPTER 280, AND AN ACCEPTABLE REPLACEMENT 4. A STATEMENT PURPORTEDLY SIGNED BY THE MAYOR, CITY MANAGER, OR AUTHORIZED Page 1 of 3 Each page of this document is an integral part of this Irrevocable Standby Letter of Credit Number 15000381171 U Page 64 of 163 REPRESENTATIVE, THAT THE DRAWING IS DUE TO APPLICANT'S FAILURE TO REPAIR, CORRECT AND/OR CURE A "DEFICIENCY" AS THAT TERM IS DEFINED THAT CERTAIN MAINTENANCE, MATERIALS AND WORKMANSHIP AGREEMENT BETWEEN THE CITY AND APPLICANT WITH RESPECT TO THE FOLLOWING SUBDIVISION: VMG RETAIL. THIS LETTER OF CREDIT SHALL BE DEEMED IN FORCE UNTIL 08/01/2025 AND WILL AUTOMATICALLY BE 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. IN NO EVENT SHALL THIS LETTER OF CREDIT BE EXTENDED BEYOND OCTOBER 30, 2025 WHICH WILL BE CONSIDERED THE FINAL EXPIRATION DATE. ANY REFERENCE TO A FINAL EXPIRATION DATE DOES NOT IMPLY THAT WE ARE OBLIGATED TO EXTEND THE EXPIRATION DATE BEYOND THE INITIAL OR ANY EXTENDED DATE THEREOF. DRAFTS MUST BEAR THE CLAUSE: "DRAWN UNDER LETTER OF CREDIT IS000381171 U OF WELLS FARGO BANK, N.A., DATED JUKE 26, 2023.° THIS LETTER OF CREDIT SHALL REMAIN IN FULL FORCE AND EFFECT NOTWITHSTANDING A PARTIAL DRAW OR DRAWS SO LONG AS A SUM REMAINS TO BE DRAWN OR UNTIL 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 WELLS FARGO BANK, N.A. (THE "BANK"), AT 401 N RESEARCH PARKWAY, WINSTON-SALEM, NC 27101-4157. THIS LETTER OF CREDIT WILL BE CONSIDERED AS CANCELED 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 SUBJECTTO 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 "INTERNATIONAL 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 SHOULD ARISE, FLORIDA LAW SHALL PREVAIL. Very Truly Yours, WELLS FARGO BANK, N.A. M Authorized Signature The original of the Letter of Credit contains an embossed seal over the Authorized Signature. Page 2 of 3 Each page of this multipage document is an integral part of this Irrevocable Standby Letter of Credit Number 15000381171 U Page 65 of 163 Please direct any written correspondence or inquiries regarding this Letter of Credit, always quoting our reference number, toWells Fargo Bank, National Association, Attn: U.S. Standby Trade Services at either 704Davis Street, 2ndFloor KAACA02O]-023, San Leandro, [Ay4577-6yJ2 or 401 N. Research Pkwy,lsiFloor MACD4O04-0l7, VV|NST0N-SALEK8,N[27l0l-4l57 Phone inquiries regarding this credit should be directed to our Standby Customer Connection Professionals l-800-776-38b3Option 3 (Hours of Operation: 8:00 a.m. ET to 5:00 p.m. PT) Page 3 of 3 Each page ofthis mvmpagedocument i,anintegral part Page 66 of 163