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HomeMy WebLinkAboutCC 12 INFRASTRC IMP'S 07-05-88A, END CONSENT CALENDAR NO. 12 7-5-88 DATE: JUNE 27, 1988 'Inter-Corn THE'HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL---- CITY ATTORNEY FROM: $ UBJ ECT: EAST TUSTIN; AMENDMENT TO SUBDIVISION AGREEMENT FOR TRACT 12870 & REIMBURSEMENT AGREEMENT FOR PAYMENTS OF COSTS FOR INFRASTRUCTURE IMPROVEMENTS FOR EAST TUSTIN ASSESSMENT DISTRICT 86-2 In April, 1988, The Irvine Company ("TIC") and the City entered into a Subdivision Agreement for Tract 12870 which provided for TIC to construct and install infrastructure in and for Tract 12870 and to furnish faithful performance and labor and materials bonds to the City to guarantee the performance of these obligations. TIC has asked for City approval to substitute a letter or letters of credit in place of the bonds previously furnished. The letter or letters of credit woul'd' be the guarantee of a substantial financial institution that if the Company defaults in its performance the bank would pay the 'City the money necessary to have the improvements completed. In December, 1986, TIC and the City of Tustin entered into a Reimbursement Agreement which provides for TIC to complete certain portions Of the improvements within Assessment District' 86-2 and for the City to reimburse TIC when and if bonds are issued, for funds which have been advanced by TIC for these improvements. The Agreement contains a maximum limit for-the amount of the reimbursements of $3,000,000.00. In addition, the Agreement provides for TIC to post faithful' performance and labor and material bonds to guarantee the obligations which they have undertaken. The ~mount of the faithful performance bond is $15,073,856.00. It is proposed that the Agreement be amended to provide that the maximum amount of reimbursement be increased from $3,000,000.00 to $4,653,000.00 and that TIC be allowed to furnish the City a letter of credit in lieu of the posting of the bonds. The letter of credit would be a guarantee from a financial institution (the Security Pacific Bank) that if the Company defaults in the performance of its obligations with respect to the improvements which it undertakes, the Bank would pay the money to the City to complete these improvements. The Public Works Department and.the__~~.~ '.~W~' Attorney's office recommend approval of the proposed ~s. J G. ROURKE CITY ATTORNEY JGR: se :R: 06/27/88 (835) cc: WH MW AMENDMENT TO AGREEMENT FOR PAYMENT OF COSTS FOR INFRASTRUCTURE IMPROVEMENTS EAST TUSTIN ASSESSMENT DISTRICT 86-2 mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm THIS AMENDMENT TO AGREEMENT FOR PAYMENT OF COSTS FOR INFRASTRUCTURE IMPROVEMENTS, EAST TUSTIN ASSESSMENT DISTRICT' 86-2 (the "Amendment") is entered into by and between The Irvine Company, a Michigan corporation ("Company") and The City of Tustin, a municipal corporation ("City") as of this 20th day of June, 1988. RECITALS WHEREAS, City. and Company have previously entered into that certain "Agreement for Payment of Costs for Infrastructure Improvemenst, East Tustin Assessment District 86-2", dated as of December 15, 1986 (the "Agreement"), providing for the payment and reimbursement of certain costs to be incurred with respect to certain public improvements to serve all or a portion of the area of the City known as East Tustin, and the formation of East Tustin Assessment District 86-2 ("ETAD 86-2"); and WHEREAS, City and Company now have more accurate cost estimates for the work to be performed under the Agreement; and WHEREAS, Company wishes to indicate its consent to an increase in the maximum 'Company contribution to the costs of the improvements specified in Section 6 of the Agreement; and WHEREAS, Company has, .pursuant to the Agreement, delivered to City a Faithful Performance Bond and a Labor and Materials Bond ("the Bonds") to guarantee the performance of the obligations of ! Company pursuant to ~he Agreement; and WHEREAS, Company desires to substitute a Letter of Credit in place of the Bonds and City desires to permit such substitution. NOW, THEREFORE, in consideration of the above and other good and valuable consideration, City and Company hereby agree to amend the Agreement as follows: 1. In the second sentence of Paragrpah 6 on page 16. of the Agreement, the amount of "$3,000,000" is changed to "$4,653,000." 2. Paragraph 4(B)(iii) is hereby added to the Agreement to · read as follows: "(iii) To secure the Obligations contained in 4(B) (i) and' 4(B) (ii) above, Company may, in lieu of furnishing surety bonds, furnish to City a letter of credit in the same amount as provided in this Paragraph. Such let.ter of credit shall be from a financial institution subject to regulation by the state or federal government and shall pledge the funds specified in this Agreement." Except as amended above, the Agreement continues · unchanged, and as amended, it continues in full force and effect. IN WITNESS WHEREOF, City and Company have executed this Amendment as of the date first written above. CITY OF TUSTIN, a municipal corporation THE IRVINE COMPANY, a Michigan corporation By: Mayor, City of Tustin ATTEST: City Clerk, City of Tustin Tustin By: Its: By: It~: (C2081) 06/20/88'