Item 4ECITY OF
SOUTHLAK-E
MEMORANDUM
(August 3, 2010)
To: Shana Yelverton, City Manager
From: Robert H. Price, P.E., Director of Public Works
Subject: Approve a commercial developer's agreement with Hines
Southlake Land, L.P. for Carillon, Phase 1A, offsite
infrastructure located at the northeast corner of North White
Chapel Boulevard and State Highway 114
Action
Requested: Approve a commercial developer's agreement with Hines
Southlake Land, L.P. for Carillon, Phase 1A, offsite infrastructure
located at the northeast corner of North White Chapel Boulevard
and State Highway 114.
Background
Information: Hines Southlake Land, L.P. is proposing to construct a portion of
Kirkwood Boulevard and Southmont Drive in conjunction with the
Children's Medical Center development. In addition, a deceleration
lane will be constructed along State Highway 114 to accommodate
this development along with any future development in the Carillon
development.
The developer will construct approximately 2,800 linear feet of 12-
inch water line from White Chapel Blvd to the east property line of
the Children's Medical Center project site along State Hwy 114 in
accordance with the City's water master plan. City policy provides
for city construction cost participation in the oversizing (greater than
8 inch) of development required water lines shown on the city's
master plan. The City will reimburse the developer for the
incremental cost difference between an 8-inch and a 12-inch line in
an amount not to exceed $35,500 dollars.
In addition, the developer has agreed to construct approximately
2,600 linear feet of 12-inch water line along the proposed
Southmont Drive and Kirkwood Blvd. This water line will connect to
the 12-inch water line that will be constructed as part of the
Carillon, Phase 1A residential development that will begin
construction within the next several months. The City will
reimburse the developer for the upsizing cost from an 8-inch to a
12-inch in an amount not to exceed $34,000 dollars.
The developer will be constructing approximately 2,600 linear feet
of storm water pipe and 450 linear feet of box culvert to facilitate
the storm water runoff through the site. The developer will also
construct two earthen channels for the purpose of conveying storm
water through the development until future phases are constructed
as a part of the entire project.
A detention pond will be constructed in an area designated as a
7.646 acre public park; however, the subject park is neither
accepted and/or dedicated as part of this commercial developer's
agreement. A separate economic development (i.e., 380)
agreement will address the park dedication and may be approved
by the City Council.
In addition to the improvements outlined above, approximately 850
linear feet of 8-inch sewer will be constructed as a part of this
development.
No city participation in the drainage and sanitary sewer
improvements are planned or provided for in this developer
agreement.
Financial
Considerations: This development drains into Critical Drainage Structure #9
($278.14/acre * 15.842 acres) and will require a fee of $4,406.79 to
be paid prior to beginning construction.
Strategic Link: The CDA for Carillon, Phase 1A offsite infrastructure links to the
city's strategy map relative to the focus areas of Mobility and
Infrastructure. The specific corporate objectives that are met by
the construction of these improvements are: Providing travel
convenience within the City and region and Investing to provide
and maintain high quality public assets.
Citizen Input/
Board Review: N/A
Legal Review: Hines Southlake, L.P. requested minor changes to the language of
the standard commercial developer's agreement. The city's
attorney has reviewed the requested changes.
Alternatives: The City Council may approve the commercial developer's
agreement or deny it.
Supporting
Documents: Location Map
Commercial Developer's Agreement
Staff
Recommendation: Approve a commercial developer's agreement with Hines
Southlake Land, L.P. for Carillon, Phase 1A, offsite infrastructure
located at the northeast corner of North White Chapel Boulevard
and State Highway 114.
Staff Contact: Robert H. Price, P.E., Public Works Director
Gordon J. Mayer, Jr., P.E., City Engineer
Michelle McCullough, P.E., Civil Engineer
CARILLON, PHASE 1A, OFFSITE INFRASTRUCTURE
COMMERCIAL DEVELOPER AGREEMENT
An agreement between the City of Southlake, Texas, hereinafter referred to as
the "City", and Hines Southlake Land L.P., hereinafter referred to as the
"Developer", of the Phase 1A, Offsite Infrastructure Improvements related to
the Children's Medical Center of Dallas facility, hereinafter referred to as
"Addition" to the City of Southlake, Tarrant County, Texas, for the installation of
certain community facilities located therein, and to provide city services thereto.
It is understood by and between the parties that this Agreement is applicable to
the Addition (a commercial development) and to the off -site improvements
necessary to support the Addition. The Addition is further described in
Exhibit A and the Developer's scope of the work for the Phase 1A, Offsite
Infrastructure Improvements is shown in Exhibit B. The onsite
improvements for the Addition are being performed by Children's Medical
Center of Dallas pursuant to a separate Commercial Developer Agreement.
This final agreement supersedes the interim agreement dated July 13, 2010.
GENERAL REQUIREMENTS
A. It is agreed and understood by the parties hereto that the
Developer shall employ a civil engineer licensed to practice in the
State of Texas for the design and preparation of the plans and
specifications for the construction of all facilities covered by this
Agreement.
B. The Developer will present to the City either a cash escrow, Letter
of Credit, performance bond and payment bond acceptable to the
City guaranteeing and agreeing to pay an amount equal to 100% of
the value of the construction cost of all the public facilities to be
constructed by the Developer, and providing for payment to the City
of such amounts, up to the total remaining amounts required for the
completion of the public facilities if the Developer fails to complete
the work within two (2) years of the signing of this Agreement
between the City and Developer. All bonds shall be issued by a
Best -rated bonding company. All letters of credit must meet the
Requirements for Irrevocable Letter of Credit attached hereto and
incorporated herein.
The value of the performance bond, letter of credit or cash escrow
will reduce at a rate consistent with the amount of work that has
been completed by the Developer and accepted by the City.
Performance and payment bond, letter of credit or cash escrow
from the prime contractor(s) or other entity reasonably acceptable
to the City, hereinafter referred to as Contractor, will be acceptable
in lieu of Developer's obligations specified above.
Commercial Developer Agreement Page 1 of 19
C. The Developer agrees to furnish to the City maintenance bonds,
letter of credit and cash escrow amounting to 100% of the cost of
construction of underground public utilities and 100% for the
paving. These maintenance bonds, letter of credit or cash escrow
will be for a period of two (2) years from the date of acceptance of
all improvements and will be issued prior to the final City
acceptance of the Addition. Such acceptance will not be
unreasonably delayed by the City. The maintenance bonds, letter
of credit or cash escrow will be supplied to the City by the
contractors performing the work, and the City will be named as the
beneficiary if the contractors fail to perform any required
maintenance.
D. It is further agreed and understood by the parties hereto that upon
acceptance by the City, title to all facilities and improvements
mentioned herein above which are intended to be public facilities
shall be vested in the City, and Developer hereby relinquishes any
right, title, or interest in and to said facilities or any part thereof. It is
further understood and agreed that until the City accepts such
improvements, the City shall have no liability or responsibility in
connection with any such facilities. The City agrees to accept all
such facilities and improvements promptly after all improvements
have been completed in accordance with the civil construction
plans by the Developer in accordance with the terms of this
Agreement. Acceptance of the facilities for this provision and for
the entire Agreement shall occur at such time that the City, through
its City Manager or his duly appointed representative, provides
Developer with a written acknowledgement that all facilities are
complete, have been inspected and approved, and are being
accepted by the City.
E. On all public facilities included in this Agreement for which the
Developer awards his own construction contract, Developer agrees
to the following procedure:
1. Developer agrees to pay the following:
a. Inspection fees equal to three percent (3%) of the
hard construction costs of the water , street, drainage
and sanitary sewer facilities, on all facilities included
in this agreement for which Developer awards his or
her own construction contract, to be paid prior to
construction of each phase and based on actual bid
construction cost;
Commercial Developer Agreement Page 2 of 19
b. Administrative Processing Fee equal to two percent
(2%) of the hard construction costs of water, street,
drainage and sanitary sewer facilities, on all facilities
included in this Agreement for which Developer
awards his or her own construction contract, to be
paid prior to construction of each phase and based on
actual bid construction cost;
C. Trench testing (95% Standard);
d. The additional charge for inspections during Saturday,
Sunday, holidays, and after normal working hours;
e. Any charges for retesting as a result of failed tests;
f. All gradation tests required to insure proper cement
and/or lime stabilization.
2. The City agrees to bear the expense of:
a. All nuclear density tests on the roadway subgrade
(95% Standard);
b. Technicians time for preparing concrete cylinders;
and
C. Concrete cylinder tests and concrete coring samples.
The City can delay connection of buildings to service lines or
water mains constructed under this Agreement until said
water mains and service lines have been completed to the
satisfaction of and acceptance by the City.
F. The Developer will be responsible for mowing all grass and weeds
and otherwise reasonably maintaining the aesthetics of all land and
lots in said Addition which have not been sold to third parties. After
fifteen (15) days written notice, should the Developer fail in this
responsibility, the City may contract for this service and bill the
Developer for reasonable costs. Such amount shall become a lien
upon all real property of the Addition so maintained by the City, and
not previously conveyed to other third parties, 120 days after
Developer has notice of costs.
G. Any guarantee of payment instrument (Performance Bond, Letter of
Credit, etc.) submitted by the Developer or Contractor on a form
other than the one which has been previously approved by the City
as "acceptable" shall be submitted to the City Attorney and this
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Agreement shall not be considered in effect until such City Attorney
has approved the instrument. Approval by the City shall not be
unreasonably withheld or delayed.
H. Any surety company through which a bond is written shall be a
surety company duly authorized to do business in the State of
Texas, provided that the City, through the City Manager, shall retain
the right to reject any surety company as a surety for any work
under this or any other Developer's Agreement within the City
regardless of such company's authorization to do business in
Texas. Approval by the City shall not be unreasonably withheld or
delayed.
The Developer agrees to fully comply with the terms and conditions
of all other applicable development regulations and ordinances of
the City.
J. The Developer agrees that the completed project will be
constructed in conformance with the Development Site Plan,
Construction Plans and other permits or regulatory authorizations
granted by the City during the development review process.
II. FACILITIES
A. ON -SITE WATER
The Developer hereby agrees to install water facilities to service
lots as shown on the final plat of the Addition. Water facilities will
be installed in accordance with plans and specifications to be
prepared by the Developer's engineer and released by the City.
Further, the Developer agrees to complete this installation in
accordance with Ordinance No. 170 and shall be responsible for all
construction costs, materials and engineering. In the event that
certain water lines are to be oversized because of City
requirements, the City will reimburse the Developer for the oversize
cost greater than the cost of an 8" line. Additionally, the City
agrees to provide temporary water service at Developer's request
and expense, for construction, testing and irrigation purposes only,
to individual lots during the construction of buildings, even though
sanitary sewer service may not be available to the buildings.
B. DRAINAGE
Developer hereby agrees to construct the necessary drainage
facilities within the Addition. These facilities shall be in accordance
with the plans and specifications to be prepared by Developer's
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engineers, released by the Director of Public Works, the City, and
made part of the final plat as approved by the Planning and Zoning
Commission. The Developer hereby agrees to fully comply with all
EPA and TNRCC requirements relating to the planning, permitting
and management of storm water which may be in force at the time
that development proposals are being presented for approval by
the City.
C. STREETS
The street construction in the Addition will be installed in
accordance with plans and specifications to be prepared by the
Developer's engineer and released by the Director of Public Works.
1. The Developer will be responsible for:
a) Installation and two year operation of street lights,
which is payable to the City prior to final acceptance
of the Addition; or an agreement with utility provider
stating that no charge will be made for street lights for
the two-year duration.
b) Installation of all street signs designating the names
of the streets inside the Addition, said signs to be of a
type, size, color and design standard generally
employed by the Developer and approved by the City
in accordance with City ordinances;
c) Installation of all regulatory signs recommended
based upon the Manual on Uniform Traffic Control
Devices as prepared by the Developer's engineer by
an engineering study or direction of the Director of
Public Works. It is understood that Developer may
put in signage having unique architectural features,
however, should the signs be moved or destroyed by
any means, the City is only responsible for
replacement of standard signage.
2. All street improvements will be subject to inspection and
approval by the City. No work will begin on any street
included herein prior to complying with the requirements
contained elsewhere in this Agreement. All water, sanitary
sewer, and storm drainage utilities which are anticipated to
be installed within the street or within the street right-of-way
will be completed prior to the commencement of street
construction on the specific section of street in which the
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utility improvements have been placed or for which they are
programmed. It is understood by and between the
Developer and the City that this requirement is aimed at
substantial compliance with the majority of the pre -planned
facilities.
It is understood that in every construction project a decision
later may be made to realign a line or service which may
occur after construction has commenced. The Developer
has agreed to advise the City Director of Public Works as
quickly as possible when such a need has been identified
and to work cooperatively with the City to make such utility
change in a manner that will be least disruptive to street
construction or stability.
D. ON -SITE SANITARY SEWER FACILITIES
The Developer hereby agrees to install sanitary sewage collection
facilities to service lots as shown on the final plat of the Addition.
Sanitary sewer facilities will be installed in accordance with the
plans and specifications to be prepared by the Developer's
engineer and released by the City. Further, the Developer agrees
to complete this installation in compliance with all applicable city
ordinances, regulations and codes and shall be responsible for all
construction costs, materials, engineering, permits and Impact
Fees. In the event that certain sewer lines are to be oversized
because of City requirements, the City will reimburse the Developer
for the oversize cost greater than the cost of an 8" line.
E. EROSION CONTROL
During construction of the Addition and after the streets have been
installed, the Developer agrees to keep the streets free from soil
build-up. The Developer agrees to use soil control measures, such
as those included in NCTCOG STANDARD SPECIFICATIONS
FOR PUBLIC WORKS CONSTRUCTION, DIVISION 1000
EROSION AND SEDIMENT CONTROL, to prevent soil erosion. It
will be the Developer's responsibility to present to the Director of
Public Works a soil control development plan that will be
implemented for this Addition. When in the opinion of the Director
of Public Works there is sufficient soil build-up on the streets or
other drainage areas and notification has been given to the
Developer, the Developer will have seventy-two (72) hours to clear
the soil from the affected areas. If the Developer does not remove
the soil within 72 hours, the City may cause the soil to be removed
either by contract or City forces and place the soil within the
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Addition at the contractor's expense. All fees owed to the City will
be collected prior to acceptance of the Addition.
After construction of the Addition and prior to acceptance by the
City, the Developer agrees to have a permanent erosion control
plan prepared and approved by the Director of Public Works and
have the plan installed and working, effectively, in the opinion of the
Director of Public Works. This erosion control will prevent soil
erosion from the newly created lot/lots from washing into street
rights of way, drainage ways or other private property.
F. AMENITIES
It is understood by and between the City and Developer that the
Addition may incorporate a number of unique amenities and
aesthetic improvements such as ponds, aesthetic lakes, unique
landscaping, walls, and may incorporate specialty signage and
accessory facilities. The Developer agrees to accept responsibility
for the construction and maintenance of all such aesthetic or
specialty items such as walls, vegetation, signage, landscaping,
street furniture, pond and lake improvements until such
responsibility is turned over to a property owner's association.
G. USE OF PUBLIC RIGHT-OF-WAY
It is understood by and between the City and Developer that the
Developer may provide unique amenities within public right-of-way,
such as landscaping, irrigation, lighting, etc., for the enhancement
of the Addition. The Developer agrees to maintain these amenities
until such responsibility is turned over to a property owner's
association or other party. The Developer understands that the
City shall not be responsible for the replacement of these amenities
under any circumstances and further agrees to indemnify and hold
harmless the City from any and all damages, loss or liability of any
kind whatsoever by reason of injury to property or third person
occasioned by its use of the public right-of-way with regard to these
improvements and the Developer shall, at his own cost and
expense, defend and protect the City against all such claims and
demands.
H. START OF CONSTRUCTION
Before the construction of the water, sewer, streets or drainage
facilities can begin, the following must take place:
Commercial Developer Agreement Page 7 of 19
1. Approved payment and performance bonds must be
submitted to the City in the name of the City prior to
commencement of any work.
2. At least six (6) sets of construction plans to be stamped
"Released for Construction" by the Director of Public Works
must be submitted.
3. All fees required to be paid to the City.
4. Developer Agreement must be executed.
5. The Developer, or Contractor, shall furnish to the City a
policy of general liability insurance, naming the City as co-
insured, prior to commencement of any work. All insurance
must meet the Requirements of Contractor's Insurance
attached hereto and incorporated herein.
6. A Pre -Construction Meeting to be held with all Contractors,
major Sub -Contractors, Utilities and appropriate Government
Agencies.
GENERAL PROVISIONS
A. INDEMNIFICATION
DEVELOPER COVENANTS AND AGREES TO INDEMNIFY AND
DOES HEREBY INDEMNIFY, HOLD HARMLESS AND DEFEND
CITY, ITS OFFICERS, AGENTS, SERVANTS AND EMPLOYEES,
FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS FOR
PROPERTY DAMAGE OR LOSS AND/OR PERSONAL INJURY,
INCLUDING DEATH, TO ANY AND ALL PERSONS, OF
WHATSOEVER KIND OR CHARACTER, WHETHER REAL OR
ASSERTED, (INCLUDING, WITHOUT LIMITATION,
REASONABLE FEES AND EXPENSES OF ATTORNEYS,
EXPERT WITNESSES AND OTHER CONSULTANTS), ARISING
OUT OF OR IN CONNECTION WITH, DIRECTLY OR
INDIRECTLY, THE CONSTRUCTION, MAINTENANCE,
OCCUPANCY, USE, EXISTENCE OR LOCATION OF SAID
IMPROVEMENT OR IMPROVEMENTS, AND SHALL FURTHER
BE LIABLE FOR INJURY OR DAMAGE TO CITY PROPERTY,
ARISING OUT OF OR IN CONNECTION WITH ANY AND ALL
ACTS OR OMISSIONS OF DEVELOPER, ITS OFFICERS,
AGENTS, SERVANTS, EMPLOYEES, CONTRACTORS,
SUBCONTRACTORS, LICENSEES, INVITEES OR
TRESPASSERS.
Commercial Developer Agreement Page 8 of 19
DEVELOPER AGREES TO INDEMNIFY THE CITY, ITS
OFFICERS AND EMPLOYEES FOR ANY DAMAGES, CLAIMS
OR LIABILITIES ARISING FROM THE NEGLIGENT ACT OR
OMISSION, OR OF THE CONCURRENT NEGLIGENT ACT OR
OMISSION, OF THE CITY, ITS OFFICERS AND EMPLOYEES.
B. Venue of any action brought hereunder shall be in Fort Worth,
Tarrant County, Texas.
C. Approval by the Director of Public Works or other City employee of
any plans, designs or specifications submitted by the Developer
pursuant to this Agreement shall not constitute or be deemed to be
a release of the responsibility and liability of the Developer, his
engineer, employees, officers or agents for the accuracy and
competency of their design and specifications. Such approval shall
not be deemed to be an assumption of such responsibility and
liability by the City for any defect in the design and specifications
prepared by the consulting engineer, his officers, agents, servants
or employees, it being the intent of the parties that approval by the
Director of Public Works signifies the City's approval on only the
general design concept of the improvements to be constructed. In
this connection, the Developer shall for a period of two (2) years
after the acceptance by the City of the completed construction
project, indemnify and hold harmless the City, its officers, agents,
servants and employees, from any loss, damage, liability or
expense on account of damage to property and injuries, including
death, to any and all persons which may arise out of any defect,
deficiency or negligence of the engineer's designs and
specifications incorporated into any improvements constructed in
accordance therewith, and the Developer shall defend at his own
expense any suits or other proceedings brought against the City, its
officers, agents, servants or employees, or any of them, on account
thereof, to pay all expenses and satisfy all judgements which may
be incurred by or rendered against them or any of them in
connection with herewith.
D. This Agreement or any part herein, or any interest herein, shall not
be assigned by the Developer without the express written consent
of the City Manager, which shall not be unreasonably withheld or
delayed.
E. On all facilities included in this Agreement for which the Developer
awards his or her own construction contract, the Developer agrees
to employ a construction contractor who is approved by the City,
and whose approval shall not be unreasonably withheld or delayed,
Commercial Developer Agreement Page 9 of 19
said contractor to meet City and statutory requirements for being
insured, licensed and bonded to do work in public projects and to
be qualified in all respects to bid on public projects and to be
qualified in all respects to bid on public projects of a similar nature.
In addition, the Developer, or Contractor shall furnish the payment
and performance bonds in the name of the City prior to the
commencement of any work hereunder and shall also furnish to the
City a policy of general liability insurance.
F. Work performed under the Agreement shall be completed within
two (2) years from the date thereof. In the event the work is not
completed within the two (2) year period, the City may, at its
election, draw down on the performance bond, letter of credit or
other security provided by Developer and complete such work at
Developer's expense; provided, however, that if the construction
under this Agreement shall have started within the two (2) year
period, the City may agree to renew the Agreement with such
renewed Agreement to be in compliance with the City policies in
effect at that time.
G. Prior to final acceptance of the Addition, the Developer shall
provide to the City three (3) copies of Record Drawings of the
Addition, showing the facilities as actually constructed.
H. Such drawings will be stamped and signed by a registered
professional civil engineer. In addition, the Developer shall provide
electronic files showing the grading plan and drainage area map;
the plan and profile of the sanitary sewer, storm drain, roadway and
waterline; all lot lines, and tie in to the state Plane Coordinate
System.
III. OTHER ISSUES
A. DOWNSTREAM CRITICAL DRAINAGE STRUCTURE FEE
This development drains into downstream critical drainage
structure #9. A downstream critical drainage structure fee of
$4,406.29 ($278.14 / acre * 15.842 acres) if required for this
development..
B. OFF -SITE DRAINAGE
The developer will construct at no additional cost to the City,
an earthen channel beginning on the north side of SH 114 from
the existing 2-8' by 4' concrete box culverts to the proposed
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Southmont Drive for the purpose of transporting storm water
through the development until future phases are constructed
as a part of the entire project.
A second earthen channel will be constructed at no additional
cost to the City, from the proposed detention pond
approximately 1,500 feet in length for the purpose of
transporting storm water flow from the proposed project site
until future phases are constructed.
C. 12" WATER LINE — City Participation
The interim developer's agreement noted that the Developer
would construct approximately 2,150 LF of 12 inch public
waterline along SH 114 from White Chapel Blvd to the
Children's Medical Center of Dallas facility. The City will
reimburse the Developer for the upsizing from an 8 inch to a
12 inch water line in an amount not to exceed $28,000.00.
In addition to the 12 inch water line along SH 114 mentioned
above, as part of this final agreement, the developer will
construct approximately 2,600 linear feet of 12 inch water line
along proposed Kirkwood Blvd and Southmont Drive. The City
will reimburse the Developer for the upsizing from an 8 inch to
a 12 inch water line in an amount not to exceed $34,000.00.
The developer has also agreed to construct approximately 620
linear feet of 12 inch water line along SH 114 from the
proposed Southmont Drive to the eastern property line of the
Children's Medical Center of Dallas Addition. The City will
reimburse the Developer for the upsizing from an 8 inch to a
12 inch water line in an amount not to exceed $$7,500.00
D. PARK FEES
There are no park fees associated with this phase of the
Carillon development. Although the final plat indicates that
7.646 acres on Block 1, Lot 2 will be dedicated to the City as a
public park, this developer's agreement does not accept this
land as park dedication.
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E. TREE PRESERVATION ORDINANCE
All construction activities shall comply with the current Tree
Preservation Ordinance requirements and as may be amended by
the City Council. Such conditions include, but are not limited to,
proper posting of tree protection warning signs and tree protective
fencing to be maintained throughout the duration of the project.
Commercial Developer Agreement Page 12 of 19
SIGNED AND EFFECTIVE on the date last set forth below.
HINES SOUTHLAKE LAND LIMITED PARTNERSHIP,
a Texas limited partnership
By: Hines Southlake Land GP LLC,
a Delaware limited partnership,
its General Partner
By: Hines Interests Limited Partnership,
a Delaware limited partnership,
its sole Member
By: Hines Holding, Inc.,
a Texas corporation,
its General Partner
By:
Name: Charles W. Elder
Title: Senior Vice President
Address: 2200 Ross Avenue
Suite 4200W
Dallas, Texas 75201
Attn: Rob Witte
STATE OF
COUNTY OF
On , before me, ,
Notary Public, personally appeared personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his authorized capacity, and that by his
signature on the instrument, the person, or the entity upon behalf of which the
person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
Notary Public
My commission expires:
Commercial Developer Agreement Page 13 of 19
CITY OF SOUTHLAKE, TEXAS
John Terrell, Mayor
ATTEST:
Lori Payne, City Secretary
Date:
Commercial Developer Agreement Page 14 of 19
REQUIREMENTS FOR IRREVOCABLE LETTER OF CREDIT
1. The Letter of Credit must have a duration of at least one year.
2. The Letter of Credit may be substituted for utility security deposits
exceeding $10,000.00. The City reserves the right to specify the face
amount of the letter of credit.
3. The Letter of Credit must be issued by a FDIC insured bank in a form
acceptable to the City of Southlake. The City reserves the right to
approve/disapprove the bank issuing the Letter of Credit.
4. The Letter of Credit must be issued by a bank that has a minimum capital
ratio of six (6%) percent, and has been profitable for each of the last two
consecutive years.
5. The customer must provide the City with supporting financial information
on the bank to allow the City to ascertain requirements are met. Suitable
financial information would be the previous two (2) years December 31
Call Reports submitted to the FDIC and audited financial statements.
6. Partial drawings against Letters of Credit must be permitted.
7. The City must be able to draft on sight with proof of amount owed.
8. The customer pays any and all fees associated with obtaining Letter of
Credit.
9. Expiring Letter of Credit must be replaced by substitute Letters of Credit at
least 30 days prior to the expiration date on the Letter of Credit held by the
C ity.
Commercial Developer Agreement Page 15 of 19
REQUIREMENTS FOR CONTRACTOR'S INSURANCE
Contractor's Insurance
1. Without limiting any of the other obligations or liabilities of the CONTRACTOR, during the
term of the Contract, the CONTRACTOR shall purchase and maintain the following minimum
insurance coverages with companies duly approved to do business in the State of Texas and
satisfactory to the CITY. In this section "Project" shall mean the public facilities to be constructed
by Developer or under Developer's contract with a CONTRACTOR. Coverages shall be of the
following types and not less than the specified amounts:
a. Workers' compensation as required by Texas law, with the policy
endorsed to provide a waiver of subrogation as to the CITY; employer's
liability insurance of not less than the minimum statutory amounts.
b. Commercial general liability insurance, including premises -
operations; independent CONTRACTOR's liability, completed
operations and contractual liability covering, but not limited to, the
liability assumed under the indemnification provisions of this
Contract, fully insuring CONTRACTOR's (or Subcontractor's)
liability for injury to or death of CITY's employees and third parties,
extended to include personal injury liability coverage with damage
to property of third parties, broad form property damage, with
minimum limits as set forth below:
General Aggregate......................$2,000,000
Bodily Injury $1,000,000 Each Occurrence
Property Damage $1,000,000 Each Occurrence
Products—Components/Operations Aggregate . $1,000,000
Personal and Advertising Injury ............ $ 1,000,000
(With Employment Exclusion deleted)
Each Occurrence ...................... $ 1,000,000
Contractual Liability:
Bodily Injury $1,000,000 Each occurrence
Property Damage $1,000,000 Each occurrence
The policy shall include coverage extended to apply to completed operations,
asbestos hazards (if this project involves work with asbestos) and ECU
(explosion, collapse and underground) hazards. The completed operations
coverage must be maintained for a minimum of one year after final completion
and acceptance of the work, with evidence of same filed with CITY.
C. Comprehensive automobile and truck liability insurance, covering owned, hired
and non -owned vehicles, with a combined bodily injury and property damage
minimum limit of $1,000,000 per occurrence; or separate limits of $500,000 for
bodily injury (per person), and $500,000 for property damage. Such insurance
shall include coverage for loading and unloading hazards.
d. Property Insurance (Builder's All Risk)
Commercial Developer Agreement Page 16 of 19
(i) CONTRACTOR shall purchase and maintain, at all times during the term
of its Contract with the Developer property insurance written on a
builder's risk "all-risk" or equivalent policy form in the amount of the initial
contract price, plus value of subsequent contract modifications and cost
of materials supplied or installed by others, comprising total value for the
entire Project at the site on a replacement cost basis without optional
deductibles. Such property insurance shall be maintained, unless
otherwise in writing by all persons and entities who are beneficiaries of
such insurance, until final payment has been made, or until no person or
entity other than the CITY has an insurable interest in the property
required by this paragraph to be covered, whichever is later. This
insurance shall include interests of the CITY, the CONTRACTOR,
Subcontractors and Sub -Subcontractors in the Project.
(ii) Property insurance shall be on an "all-risk" or equivalent policy form and
shall include, without limitation, insurance against the perils of fire (with
extended coverage) and physical loss or damage including, without
duplication of coverage, theft, vandalism, malicious mischief, collapse,
earthquake, flood, windstorm, falsework, testing and startup, temporary
buildings and debris removal including demolition occasioned by
enforcement of any applicable legal requirements, and shall cover
reasonable compensation for CONTRACTOR's services and expenses
required as a result of such insured loss.
(iii) If the insurance required by this paragraph requires deductibles, the
CONTRACTOR shall pay costs not covered because of such
deductibles.
(iv) This property insurance shall cover portions of the Work stored off the
site, and also portions of the Work in transit.
d. OWNER's Protective Liability Insurance:
(i) CONTRACTOR shall obtain, pay for and maintain at all
times during the prosecution of the work under the contract
between the CONTRACTOR and the Developer, a CITY's
protective liability insurance policy naming the CITY as
insured for property damage and bodily injury, which may
arise in the prosecution of the work or CONTRACTOR's
operations under the contract.
(ii) Coverage shall be on an "occurrence" basis, and the policy
shall be issued by the same insurance company that carries
the CONTRACTOR's liability insurance with a combined
bodily injury and property damage minimum limit of
$1,000,000 per occurrence.
e. "Umbrella" Liability Insurance:
The CONTRACTOR shall obtain, pay for and maintain umbrella liability
insurance during the term of the Contract between the CONTRACTOR and the
Developer, insuring CONTRACTOR for an amount of not less than $5,000,000
Commercial Developer Agreement Page 17 of 19
per occurrence combined limit for bodily injury and property damage that
follows form and applies in excess of the primary liability coverages required
herein above. The policy shall provide "drop down" coverage where underlying
primary insurance coverage limits are insufficient or exhausted.
Policy Endorsements
1. Each insurance policy to be furnished by CONTRACTOR shall include the
following conditions by endorsement to the policy:
a. name the CITY as an additional insured as to all applicable policies;
b. each policy shall require that 30 days prior to cancellation, non -renewal
or any material change in coverage, a notice thereof shall be given to
CITY by certified mail. If the policy is canceled for nonpayment of
premium, only 10 days written notice to CITY is required;
C. the term "CITY" shall include all authorities, boards, bureaus,
commissions, divisions, departments and offices of the CITY and
individual members, employees and agents thereof in their official
capacities, and/or while acting on behalf of the CITY;
d. the policy please "other insurance" shall not apply to the CITY wliere the CITY
is an additional insured on the policy.
2. Special Conditions
a. Insurance furnished by the CONTRACTOR shall be in accordance with the
following requirements:
any policy submitted shall not be subject to limitations, conditions or
restrictions deemed inconsistent with the intent of the insurance
requirements to be fulfilled by CONTRACTOR. The CITY's decision
thereon shall be final;
ii. all policies are to be written through companies duly licensed to transact
that class of insurance in the State of Texas; and
iii. all liability policies required herein shall be written with an "occurrence"
basis coverage trigger.
b. CONTRACTOR agrees to the following:
�. CONTRACTOR hereby waives subrogation rights for loss or damage to the
extent same are covered by insurance. Insurers shall have no right of recovei-v
or subrogation against the CITY, it being the intention that the insurance
policies shall protect all parties to the contract and be primaii coverage for all
losses covered by the policies:
ii. companies issuing the insurance polices and CONTRACTOR shall have
no recourse against the CITY for payment of any premiums or
assessments for any deductibles, as all such premiums and deductibles
are the sole responsibility and risk of the CONTRACTOR;
Commercial Developer Agreement Page 18 of 19
iii. approval, disapproval or failure to act by the CITY regarding any
insurance supplied by the CONTRACTOR (or any Subcontractors) shall
not relieve the CONTRACTOR of full responsibility or liability for
damages and accidents as set forth in the Contract Documents or this
Agreement. Neither shall be bankruptcy, insolvency or denial of liability
by the insurance company exonerate the CONTRACTOR from liability;
deductible limits on insurance policies exceeding $10,000 require
approval of the CITY;
vi. any of such insurance policies required under this paragraph may be
written in combination with any of the others, where legally permitted, but
none of the specified limits may be lowered thereby;
vii. prior to commencement of operations pursuant to this Contract, the
Developer or the Developer's CONTRACTOR shall furnish the CITY with
satisfactory proof that he has provided adequate insurance coverage in
amounts and by approved carriers as required by this Agreement;
viii. CONTRACTOR shall provide notice of any actual or potential claim or
litigation that would affect required insurance coverages to the CITY in a
timely manner;
ix. CONTRACTOR agrees to either require its Subcontractors to maintain
the same insurance coverage and limits as specified for the
CONTRACTOR or coverage of Subcontractors shall be provided by the
Contract; and
X. Prior to the effective date of cancellation, CONTRACTOR shall deliver to
the CITY a replacement certificate of insurance or proof of reinstatement.
Commercial Developer Agreement Page 19 of 19
.
11
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