Item 06 Approval of a Two-Year Warranty Surety and Maintenance, Materials, and Workmanship Agreement with Avex Homes LLC for the Ocoee Reserve Subdivision ocoee
florida
AGENDA ITEM COVER SHEET
Meeting Date: May, 7 2019
Item # (:
Reviewed By:
Contact Name: Milen D. Womack, Project►'�Department Director: 'm
Engineer
Contact Number: 407-554-7313 City Manager:
Subject: Approval of a Two-Year Warranty Surety and Maintenance, Materials, and Workmanship
Agreement with Avex Homes LLC for the Ocoee Reserve Subdivision
Commission District 4- George Oliver Ill
Background Summary:
Ocoee Reserve is single-family residential subdivision located on Silver Star Road north of the Temple Grove
Estates subdivision. The Ocoee Reserve subdivision is made up of 43 detached single-family homes.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 and reclaimed water
utilities, the street and stormwater collection system, and the perimeter wall/fencing and associated landscaping.
All identified punchlist 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. Avex Homes LLC 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 Avex Homes LLC for the two-year warranty for Ocoee Reserve
and execute the Maintenance, Materials, and Workmanship Agreement with Avex Homes LLC?
Recommendations:
The Development Services Department recommends the acceptance of the Surety and the execution of the
Maintenance, Materials, and Workmanship Agreement with Avex Homes LLC for the Ocoee Reserve Subdivision.
Attachments:
1. Maintenance, Materials, and Workmanship Agreement with Avex Homes
2. Irrevocable Stand-By Letter of Credit Number 11934 issued by City National 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. N/A
Reviewed by N/A
2
MAINTENANCE,MATERIALS,AND
WORKMANSHIP AGREEMENT WITH LETTER OF CREDIT
(SUBDIVISION NAME/PHASE: Ocoee Reserve Phase 1
THIS MAINTENANCE,MATERIALS,AND WORKMANSHIP AGREEMENT
(this"Agreement')is entered into this 15th day of March,2019 by Avex Homes,LLC, a Florida
limited liability company(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 Ocoee Reserve(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 Final Site Plan for Ocoee Reserve
approved by the City on January 8,2018; 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 City National Bank(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 SIXTY-THREE THOUSAND THREE HUNDRED SIXTY-FOUR AND
42/100 DOLLARS ($63,364.42)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)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(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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ORLA_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.
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ORLA 1688244.1
DEVELOPER:
By: 4 `�'
P' t Name: =; , s r
itle: g r s:dr.-1
CITY:
AT VEST:
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 .
By:
City Attorney
-4-
ORLA_1688244.1
EXHIBIT"A"
LEGAL DESCRIPTION
A PORTION OF LOT 14 1/2, LAKE PARK HIGHLAND AS RECORDED IN PLAT BOOK
F, PAGE 124 OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA, LYING
IN SECTION 15, TOWNSHIP 22 SOUTH, RANGE 28 EAST, DESCRIBED AS
FOLLOWS:
COMMENCE AT THE NORTHWEST CORNER OF LOT 49 OF TEMPLE GROVE
ESTATES PHASE 1B, ACCORDING TO THE PLAT THEREOF AS RECORDED IN
PLAT BOOK 31, PAGE 28 OF THE PUBLIC RECORDS OF ORANGE COUNTY,
FLORIDA; THENCE RUN NORTH 89°56'08" EAST, ALONG THE NORTH LINE OF
SAID TEMPLE GROVE ESTATES PHASE 1B, ALSO BEING THE SOUTH LINE OF
SAID LOT 14 1/2, FOR A DISTANCE OF 15.00 FEET TO THE POINT OF
BEGINNING; THENCE RUN NORTH 00°03'50" EAST, ALONG THE EAST RIGHT-OF-
WAY LINE OF AN UNNAMED RIGHT-OF-WAY AS RECORDED IN DEED BOOK 397,
PAGE 500 OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA, FOR A
DISTANCE OF 563.96 FEET, TO A POINT ON THE SOUTH RIGHT-OF-WAY LINE
OF STATE ROAD 438, ALSO KNOWN AS SILVER STAR ROAD; THENCE RUN
NORTH 89°5T00" EAST, ALONG THE SOUTH RIGHT-OF-WAY LINE AS
•
RECORDED IN OFFICIAL RECORDS BOOK 5892, PAGE 483 OF THE PUBLIC
RECORDS OF ORANGE COUNTY, FLORIDA, FOR A DISTANCE OF 840.07 FEET;
THENCE RUN SOUTH 00°01'40" EAST, ALONG THE WEST LINE OF S&S ACRES
ACCORDING TO THE PLAT THEREOF AS RECORDED IN PLAT BOOK 8, PAGE 103
OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA AND THE
NORTHERLY EXTENSION THEREOF, FOR A DISTANCE OF 563.75 FEET TO THE
SOUTHWEST CORNER OF LOT 6 OF SAID S&S ACRES; THENCE RUN SOUTH
89°56'08" WEST, ALONG THE AFORESAID NORTH LINE OF TEMPLE GROVE
ESTATES PHASE 1B, ALSO BEING THE AFORESAID SOUTH LINE OF LOT 14 1/2,
FOR A DISTANCE OF 840.97 FEET TO THE POINT OF BEGINNING.
CONTAINING 10.88 ACRES MORE OR LESS.
-5-
ORLA_1688244.1
EXHIBIT"B"
SEE ATTACHED
-6-
ORLA 1688244.1
BANK'S ADDRESS:
25 West Flagler Street,4th Floor
Miami,Florida 33130
Attention:hInternational865391Dor305-577- �; City National Bank
Telephone:786-539-2111 or305-577-5504
IRREVOCABLE STANDBY LETTER OF CREDIT NO. 11934 Bci FINANCIAL GROUP
Date of Issuance: February 22,2019
SUBDIVISION NAME/PHASE: OCOEE RESERVE/PHASE I
Applicant Beneficiary •
Avex Homes,LLC City of Ocoee
28 East Washington Street 150 North Lakeshore Drive ,
Orlando,Florida 32801 Ocoee,FL 34761
Issuing Bank ATTENTION:
City National Bank of Florida City Engineer
25 West Flagler Street,4th Floor 150 North Lakeshore Drive
Miami,Florida 33130 Ocoee,FL 34761
Attn: International Department
oa 8114'40
AMOUNT-$63,364.42 (Sixty-Three
2Nr• ock Thousand Three Hundred Sixty-Four
Will S 42/100 U.S.Dollars)
v �
` ',te DATE OF EXPIRY
February 22,2020
Ladies and Gentlemen,
We hereby establish our Irrevocable Standby Letter of Credit No. 11934, in favor of City of Ocoee, a
Florida municipal corporation, and authorize you to draw on City National Bank of Florida (the
"Bank"), at 25 West Flagler Street, 4th Floor, Miami, Florida 33130, Attention International
Department, by order of Avex Homes, LLC, 28 East Washington Street, Orlando, Florida 32801 up to
but not exceeding the aggregate amount of Sixty-Three Thousand Three Hundred Sixty-Four and
42/100 U.S. Dollars ($63,364.42), 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: OCOEE RESERVE/PHASE I; 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
PO Box 025620 Page 1 of 3
Miami,FL 33102-5620
citynational.com
Member FDIC I Equal Housing Lender �:�,
,k City National Bank
BCI FINANCIAL GROUP
CITY NATIONAL BANK OF FLORIDA
IRREVOCABLE STANDBY LETTER OF CREDIT NO. 11934 (PAGE 2 OF 3)
3. A statement purportedly signed by the Mayor, City Manager or authorized representative to the
effect that City National Bank of Florida 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; or
4. A statement purportedly signed by the Mayor, City Manager, or authorized 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: OCOEE RESERVE/PHASE I.
This Letter of Credit shall be deemed in force until February 22, 2020, and will automatically be
extended for periods of one (1) year each without amendment unless we provide the City Manager of
the City of Ocoee, at the address indicated above, 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 No. 11934 of City National Bank of
Florida, dated February 22,2019."
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 City National Bank of Florida, 25 West Flagler Street, 4th Floor, Miami, Florida
33130,Attention International Department.
This Letter of Credit will be considered as cancelled upon receipt by us of the original credit instrtunent
or upon any present or future expiry date hereunder,whichever shall occur first.
SPL BAS
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PO Box 025620 � o o .�
Miami, FL 33102-5620 z SEAL
citynational.com ►�- 1s7o 0
Member FDIC I Equal Housing Lender % '►1iq� -� Page 2 of 3
City National Bank
BCI FINANCIAL GROUP
CITY NATIONAL BANK OF FLORIDA
IRREVOCABLE STANDBY LETTER OF CREDIT NO. 11934 (PAGE 3 OF 3)
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 "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.
(SEAL)
SIGNED: February 22, 2019
CITY NATIONAL BANK OF FLORIDA
By: is G TI By:
lam 13, JILL
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1,
AN M.MURCIA,AVP AMARILYS V' DES,VP
INTERNATIONAL BANKING OFFICER LOAN SERVICES SUPERVISOR
PO Box 025620
Miami, FL 33102-5620
citynatlonal.com Page 3 of 3
Member FDIC I Equal Housing Lender