Item #04 Approval of Payments Totaling $325,000 to the Owners of the Fountains West Dev.
AGENDA ITEM COVER SHEET
Meeting Date: November 4, 2008
Item # 3
Contact Name:
Contact Number:
David Wheeler
407 -905-3100,
ext. 1504
Reviewed By:
Department Director:
City Manager:
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Subject: Payments totaling $325,000 to the owners of the Fountains West development in
accordance with the Development Agreement of December 22, 2006 and subsequent commitments by
City staff.
Background Summary:
The City executed a Development Agreement with the owners of the Fountains West commercial
development, SHW, LLC and Living Waters Church Ocoee, Inc., in December 2006 following approval
by the City Commission on December 19, 2006. (The developers are now collectively referred to as
OCOE, LLC, which is managed by Halvorsen Development Corp.) The Development Agreement built
upon a three-party agreement executed by OCOE, Orange County, and the City for relocation of West
Road, which was approved by the City Commission on June 6, 2006. In furtherance of its obligations
under the West Road realignment agreement and the Development Agreement, the City undertook
construction of additional turn lanes on West Road and the installation of a mast arm traffic signal at
the intersection of West Road/Ocoee Crown Point Parkway at Ocoee-Apopka Road. The total cost of
this work was about $420,000.
An additional obligation of the City was to grant up to $250,000 in Road Impact Fee credits to
OCOE upon the development's plat being filed concurrent with dedication of "Road A" (now know as
Fountains West Boulevard) to the City. The credits are in exchange for 50% of the value of the
dedicated right of way (0.93 acre @ $280,000 per acre) and 50% of the cost of constructing the
roadway itself ($234,911.52). The resulting $247,655.76 in Road Impact Fee credits would be applied
to reduce the cost of building permits granted after the plat had been recorded.
However, the plat was actually recorded in September 2008, almost one year after the required
building permits were granted. In order to receive those permits, OCOE paid a total of $919,500.12 in
Road Impact Fees and received no credits due to the fact that the plat had not been recorded at that
time. Although out-parcels remain under the OCOE's control, these parcels will be sold to other parties
prior to development; therefore, we expect there to be no future building permits to which the credit
could be applied. As an alternative, there is documentation from October 2007 that the credit would be
treated as a "reimbursement by check from the City" upon recording of the plat. OCOE now presented
the City with an invoice for $250,000 as a claim against those Road Impact Fee credits.
Also related to the development, but not included in the Development Agreement, is a commitment
made by City staff that the City would reimburse OCOE in the amount of $75,000 for the cost of
enlarging the reclaimed water mains being installed as part of the development's improvements. The
reclaimed water main upsizing is to accommodate future extensions in the developing area of Ocoee.
OCOE has also submitted an invoice to City for payment of the promised contribution to this part of the
project. City Engineering staff have reviewed the invoice and concur that it fairly represents the true
cost of the improvements.
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Issue:
The Engineering Department has proposed that the City reimburse the developers in the amount of
$247,655.76 to reflect a credit for impact fees paid in 2007, and make the $75,000 payment for the
costs associated with upsizing the reclaimed water main. Accordingly, the Department requests that
the City Commission authorize the Finance Department to make those payments to OCOE, LLC.
Recommendations
The Engineering Department recommends that the City Commission approve the disbursement of
$247,655.76 from the Road Impact Fee Fund and $75,000 from the Utility Bond Fund to satisfy the
City's obligations under the Development Agreement and other documents. Making these payments
would refund 27% of the $919,500.12 paid by the owners in road impact fees for the Fountains West
development and offset 35% of the owners' $215,515.80 in costs for reclaimed water system
construction. The road impact fee refund reflects 50% of the value of right of way and construction
costs for Fountains West Boulevard, a new City street, while the reclaimed water system payment
represents the cost of upsizing the water lines to serve future nearby development.
Attachments:
None.
Financial Impact:
Making these payments would require $247,655.76 from the Road Impact Fee Fund and $75,000 from
the Utility Bond Fund.
Type of Item: (please mark with an 'x'J
Public Hearing
Ordinance First Reading
Ordinance Second Reading
Resolution
Commission Approval
Discussion & Direction
For Clerk's DeDt Use:
_ Consent Agenda
_ Public Hearing
_ Regular Agenda
Original Document/Contract Attached for Execution by City Clerk
Original Document/Contract Held by Department for Execution
Reviewed by City Attorney
Reviewed by Finance Dept.
Reviewed by ( )
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