RES 2026-97 Approving a Development Contract Otsego Waterfront DistrictCITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2026-97
APPROVING A DEVELOPMENT CONTRACT
OTSEGO WATERFRONT DISTRICT
WHEREAS, Modern Construction of Minnesota, Inc. (the "owner") is proposing the final plat of Otsego Waterfront District;
and
WHEREAS, a final plat for the development was approved by the City Council on 12 October 2026; and
WHEREAS, Section 10-10-4.A of the Subdivision Ordinance requires the developer to execute a development contract to
provide the City construction and warranty securities for the public and private improvements and to provide the City
various remedies if the developer breaches the terms and conditions of said agreement; and
WHEREAS, those obligations are outlined and memorialized in the attached PUD Development Contract.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA THAT:
1. The PUD Development Contract attached hereto between the City of Otsego and Modern Construction of
Minnesota, Inc. is hereby approved in form subject to modification of fees, charges, and securities as approved by
City staff.
The Mayor and City Clerk are hereby authorized to execute the Development Contract on behalf of the City of Otsego.
(remainder of page blank; signatures follow)
ADOPTED by the City Council of the City of Otsego this 12th day of October, 2026.
MOTION BY: Dunlap
SECONDED BY: Tanner
IN FAVOR: Stockamp, Dunlap, Lund, and Tanner
OPPOSED: none
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CITY OF OTSEGO
Jessica L. Stockamp, Ma or
ATTEST:
Audra Etzel, City Clerk
(reserved for recording information)
DEVELOPMENT CONTRACT
(Developer Installed Improvements)
OTSEGO WATERFRONT DISTRICT
CONTRACT dated , 2026, by and between the CITY OF OTSEGO, a
Minnesota municipal corporation ("City"), and MODERN CONSTRUCTION OF MINNESOTA, INC., a
Minnesota corporation (the "Developer")
1. REQUEST FOR PLAT APPROVAL. The Developer has asked the City to approve a plat
for OTSEGO WATERFRONT DISTRICT (referred to in this Contract as the "plat"). The land is situated in
the County of Wright, State of Minnesota, and is legally described on Exhibit "A" attached hereto and made
a part hereof.
2. CONDITIONS OF PLAT APPROVAL. The City hereby approves the plat on condition that
the Developer enter into this Contract, furnish the security required by it, and record the plat with the
County Recorder or Registrar of Titles within one hundred (100) days after the City Council approves the
final plat.
3. RIGHT TO PROCEED. Within the plat or land to be platted, the Developer may not grade
or otherwise disturb the earth or remove trees, unless a grading permit has been approved by the City
240179v1 Otsego Waterfront District
Engineer following approval of a preliminary plat by the City Council, construct sewer lines, water lines,
streets, utilities, public or private improvements, or any buildings until all the following conditions have been
satisfied: 1) this contract has been fully executed by both parties and filed with the City Clerk, 2) the
necessary security has been received by the City, 3) the necessary insurance for the Developer and its
construction contractors has been received by the City, and 4) the plat has been filed with the Wright
County Recorder or Registrar of Titles' office.
4. PHASED DEVELOPMENT. If the plat is a phase of a multi -phased preliminary plat, the
City may refuse to approve final plats of subsequent phases if the Developer has breached this Contract
and the breach has not been remedied. Development of subsequent phases may not proceed until
Development Contracts for such phases are approved by the City. Park dedication charges referred to in
this Contract are not being imposed on outlots, if any, in the plat that are designated in an approved
preliminary plat for future subdivision into lots and blocks. Such charges will be calculated and imposed
when the outlots are final platted into lots and blocks.
5. PRELIMINARY PLAT STATUS. If the plat is a phase of a multi -phased preliminary plat,
the preliminary plat approval for all phases not final platted shall lapse and be void unless final platted into
lots and blocks and outlots, within two (2) years after preliminary plat approval.
6. CHANGES IN OFFICIAL CONTROLS. For five (5) years from the date of this Contract, no
amendments to the City's Comprehensive Plan or official controls shall apply to or affect the use,
development density, lot size, lot layout or dedications of the approved plat unless required by state or
federal law or agreed to in writing by the City and the Developer. Thereafter, notwithstanding anything in
this Contract to the contrary, to the full extent permitted by state law, the City may require compliance with
any amendments to the City's Comprehensive Plan, official controls, platting or dedication requirements
enacted after the date of this Contract.
7. CONTRACTORS/SUBCONTRACTORS. City Council members, City employees, and
City Planning Commission members, and corporations, partnerships, and other entities in which such
individuals have greater than a twenty-five percent (25%) ownership interest or in which they are an
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officer or director may not act as contractors or subcontractors for the public improvements identified in
Paragraph 6 above.
8. DEVELOPMENT PLANS. The plat shall be developed in accordance with the following
plans. The plans shall not be attached to this Contract. The plans may be prepared, subject to the City
Engineer's approval, after entering the Contract, but before commencement of any work in the plat. The
City Engineer may approve minor amendments to Plans without City Council approval. If the plans vary
from the written terms of this Contract, the written terms shall control. The plans are:
Plan A - Plat
Plan B - Final Grading, Drainage, and Erosion Control Plan
Plan C - Plans and Specifications for Public Improvements
Plan D - Street Lighting Plan
Plan E - Landscape Plan
9. IMPROVEMENTS. The Developer shall install and pay for the following:
A. Sanitary Sewer System
B. Water System
C. Storm Sewer System
D. Streets
E. Concrete Curb and Gutter
F. Street Lights
G. Site Grading, Stormwater Treatment/Infiltration Basins, and Erosion Control
H. Underground Utilities
I. Setting of Iron Monuments
J. Surveying and Staking
K. Sidewalks and Trails
L. Retaining Walls
M. Landscaping
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The improvements shall be installed in accordance with the City subdivision ordinance; City
standard specifications for utility and street construction; and any other ordinances including Chapter 6 of
the City Code concerning erosion and sediment control. The Developer shall submit plans and
specifications which have been prepared by a competent Minnesota registered professional engineer to the
City for approval by the City Engineer. The Developer shall instruct its engineer to provide adequate field
inspection personnel to assure an acceptable level of quality control to the extent that the Developer's
engineer will be able to certify that the construction work meets the approved City standards as a condition
of City acceptance. In addition, the City may, at the City's discretion and at the Developer's expense, have
one or more City inspectors and a soil engineer inspect the work on a full or part-time basis. The
Developer, its contractors and subcontractors, shall follow all instructions received from the City's
inspectors. The Developer's engineer shall provide for on -site project management. The Developer's
engineer is responsible for design changes and contract administration between the Developer and the
Developer's contractor. The Developer or its engineer shall schedule a pre -construction meeting at a
mutually agreeable time at the City with all parties concerned, including the City staff, to review the
program for the construction work. Within thirty (30) days after the completion of the improvements and
before the security is released, the Developer shall supply the City with a complete set of reproducible "as -
constructed" plans and an electronic file of the "as -constructed" plans in an AutoCAD .DWG file or a .DXF
file, all prepared in accordance with City standards.
In accordance with Minnesota Statutes 505.021, the final placement of iron monuments for all lot
corners must be completed before the applicable security is released. The Developer's surveyor shall also
submit a written notice to the City certifying that the monuments have been installed following site grading,
utility and street construction.
10. PERMITS. The Developer shall obtain or require its contractors and subcontractors to
obtain all necessary permits, which may include:
A. Wright County for County Road Access and Work in County Rights -of -Way
B. MnDot for State Highway Access
C. MnDot for Work in Right -of -Way
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D. Minnesota Department of Health for Watermains
E. MPCA NPDES Permit for Construction Activity
F. MPCA for Sanitary Sewer and Hazardous Material Removal and Disposal
G. DNR for Dewatering
H. City of Otsego for Building Permits, Retaining Walls, Irrigation
I. MDH for water permits
J. MPCA for sewer extension
11. DEWATERING. Due to the variable nature of groundwater levels and stormwater flows, it
will be the Developer's and the Developer's contractors and subcontractors responsibility to satisfy
themselves with regard to the elevation of groundwater in the area and the level of effort needed to
perform dewatering and storm flow routing operations. All dewatering shall be in accordance with all
applicable county, state, and federal rules and regulations. DNR regulations regarding appropriations
permits shall also be strictly followed.
12. TIME OF PERFORMANCE. The Developer shall install all required public improvements
by November 30, 2027.
13. STREETS. The Developer agrees to maintain the streets within the Plat until the base
course bituminous surfacing has been accepted by the City. Should the City be required to grade the street
prior to paving, the cost of such grading shall be paid by the Developer and draw from the Developer's letter
of credit. Should the City determine that snowplowing is necessary prior to final wear course installation, the
City will plow the street(s) prior to acceptance of the streets. The Developer shall hold harmless and
indemnify the City from any and all liability related to snow plowing and shall pay all costs associated with
snow plowing. Any plowing undertaken by the City shall not constitute City acceptance or evidence of
acceptance of the street(s) in question. The final wear course shall not be constructed until at least one
construction season after the base construction is completed and shall be delayed one more construction
season if at least seventy five percent (75%) build out is not achieved. However, the final wear course shall
not be delayed for a period longer than two years after the base course is paved, regardless of build out; in
which case, the Developer shall provide an escrow for fog sealing the streets in the event the final wear
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course is placed prior to seventy five percent (75%) build out. Upon final completion of streets and
acceptance by the City as a City street rather than a private drive, the Developer shall guarantee to the City
for a period of two (2) years the streets have been constructed to City standards. The warranty period shall
not commence until such time as street construction is completed and the streets are accepted as City
streets by the City,. The two (2) year warranty period set forth above commences upon the date on which
the City accepts the streets by resolution.
The Developer shall construct a five-foot wide concrete sidewalk along the full width of Quantrelle
Avenue abutting Lot 1, Block 1, Otsego Waterfront District. The Developer shall extend a 10-foot-wide
asphalt trail from Lot 1, Block 1 of Otsego Waterfront District to Outlot A, Waterfront East, subject to review
and approval by the City Engineer not less than one (1) year from the date Outlot B, Otsego Waterfront
District has been removed from the designated flood plain or two (2) years from the date of final plat
approval, whichever occurs first.
14. LICENSE. The Developer hereby grants the City, its agents, employees, officers and
contractors a license to enter the plat to perform all work and inspections deemed appropriate by the City in
conjunction with plat development.
15. EROSION CONTROL. Prior to initiating site grading, the erosion control plan, Plan B, shall
be implemented by the Developer and inspected and approved by the City. The City may impose
additional erosion control requirements if they would be beneficial. All areas disturbed by the grading
operations shall be stabilized per the MPCA Stormwater Permit for Construction Activity. Seed shall be in
accordance with the City's current seeding specification which may include temporary seed to provide
ground cover as rapidly as possible. All seeded areas shall be fertilized, mulched, and disc anchored as
necessary for seed retention. The parties recognize that time is of the essence in controlling erosion. If the
Developer does not comply with the MPCA Stormwater Permit for Construction Activity or with the erosion
control plan and schedule or supplementary instructions received from the City, the City may take such
action as it deems appropriate to control erosion. The City will endeavor to notify the Developer in advance
of any proposed action, but failure of the City to do so will not affect the Developer's and City's rights or
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obligations hereunder. If the Developer does not reimburse the City for any cost the City incurred for such
work within ten (10) days, the City may draw down the letter of credit to pay any costs. No development,
utility or street construction will be allowed and no building permits will be issued unless the plat is in full
compliance with the approved erosion control plan.
16. GRADING. The plat shall be graded in accordance with the approved grading development
and erosion control plan, Plan "B", The plan shall conform to City of Otsego specifications. Within thirty
(30) days after completion of the grading and before the City approves individual building permits (except
three (3) model home permits on lots acceptable to the Building Official), the Developer shall provide the
City with an "as -constructed" grading plan certified by a registered land surveyor or engineer that all storm
water treatment/infiltration basins and swales, have been constructed on public easements or land owned
by the City. The "as -constructed" plan shall include field verified elevations of the following: a) cross
sections of storm water treatment/infiltration basins; b) location and elevations along all swales, wetlands,
wetland mitigation areas if any, locations and dimensions of borrow areas/stockpiles, and installed
"conservation area" posts; and c) lot corner elevations and house pads, and all other items listed in City
Code. The City will withhold issuance of building permits until the approved certified grading plan is on file
with the City and all erosion control measures are in place as determined by the City Engineer. The
Developer certifies to the City that all lots with house footings placed on fill have been monitored and
constructed to meet or exceed FHA/HUD 79G specifications. The soils observation and testing report,
including referenced development phases and lot descriptions, shall be submitted to the Building Official for
review prior to the issuance of building permits.
Before a building permit is issued, a cash escrow shall be furnished to the City in accordance with
the City's current fee schedule to guarantee compliance with the erosion control and grading
requirements and the submittal of an as -built certificate of survey. Prior to the release of the required
individual lot grading and erosion control security that is submitted with the building permit, an as -built
certificate of survey for single family lots must be submitted to verify that the final as -built grades and
elevations of the specific lot and all building setbacks are consistent with the approved grading plan for the
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development, and amendments thereto as approved by the City Engineer, and that all required property
monuments are in place. If the final grading, erosion control and as -built survey is not timely completed,
the City may enter the lot, perform the work, and apply the cash escrow toward the cost. Upon
satisfactory completion of the grading, erosion control and as -built survey, the escrow funds, without
interest, less any draw made by the City, shall be returned to the person who deposited the funds with
the City.
A certified as -built building pad survey must be submitted and approved for commercial, industrial
or institutional developments prior to issuance of a building permit.
17. CLEAN UP. The Developer shall clean dirt and debris from streets that has resulted from
construction work by the Developer, home builders, subcontractors, their agents or assigns. Prior to any
construction in the plat, the Developer shall identify in writing a responsible party and schedule for erosion
control, street cleaning, and street sweeping.
18. OWNERSHIP OF IMPROVEMENTS. Upon completion of the work and construction
required by this Contract and final acceptance by the City, the improvements lying within public easements
shall become City property without further notice or action.
19. LATERAL STORM SEWER. The Developer shall post a security for lateral storm sewer
in the amount of $174,950.00 which is due upon final plat approval. The security amount shall be one
hundred twenty five percent (125%) of the City Engineer's estimated cost of all public improvements and/or
private improvements required by the Subdivision Ordinance or Zoning Ordinance.
The Developer shall pay a cash fee in the amount of $43,723.94 for the Trunk Storm Water
Management Fee for the North Mississippi Watershed due upon final plat approval, calculated as follows:
4.94 Gr Ac X $8,851/Gr Ac = $43,723.94
20. LATERAL SANITARY SEWER AND LIFT STATION. The Developer shall pay to the City
the required water availability charges and sanitary sewer availability charges. The water and sewer
availability charges shall be collected according to Section 8-1-6-B of City Code including 9.0 RECs per
gross acre for multiple family uses and 3.5 RECs per gross acre for commercial, industrial, or institutional
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uses. The Developer shall post a security in the amount of $107,575.00 for Lateral Sanitary Sewer
which is due upon final plat approval. The security amount shall be one hundred twenty-five percent
(125%) of the City Engineer's estimated cost of all public improvements and/or private improvements
required by the Subdivision Ordinance or Zoning Ordinance,
The Developer shall pay a cash fee in the amount of $140,982.66 for the Sewer Availability Charge
("SAC") at the time of plat approval which is calculated as follows:
4.94 Gr Ac X 9.0 REC's/Gr Ac X $3,171/REC = $140,982.66
21. LATERAL WATERMAIN. The Developer shall post a security in the amount of
$176,830.00 for the installation of lateral watermain and connection. The security amount shall be one
hundred twenty-five percent (125%) of the City Engineer's estimated cost of all public improvements and/or
private improvements required by the Subdivision Ordinance or Zoning Ordinance. The Developer shall
pay a cash fee in the amount of $204,338.16 for the Water Availability Charge ("WAC") at the time of plat
approval which is calculated as follows:
4.94 Gr Ac X9.0 REC's/Gr Ac X $4,596/REC = $204,338.16
22. SEWER CONNECTION CHARGE AND WATER CONNECTION CHARGE. The
Developer shall pay to the City required water and sewer connection charges. The water and sewer
connection charges shall be collected per Section 8-1-6-C of City Code for all uses and must be paid prior
to the issuance of a building permit based on the fee schedule in effect at the time of application for the
building permit.
23. CONSTRUCTION ACCESS. Construction traffic access and egress for grading, public
utility construction, and public street construction is restricted to access the subdivision as approved by the
City Engineer.
24. PARK DEDICATION. The Developer shall pay a cash contribution of $533,250.00 in lieu
of land in satisfaction of the City's park dedication requirements. The charge was calculated as follows:
135 Dwelling Units X $3,950/Dwelling Unit = $533,250.00
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25. TRAFFIC CONTROL SIGNS. The Developer shall be responsible for the cost of traffic
control sign installation consistent with a traffic control sign plan approved by the City. The Developer shall
pay a cash fee to the City in the amount of $3,250.00. The charge is calculated as follows:
13 Signs X $250.00/Sign = $3,250.00
26. STREET LIGHT OPERATION COSTS. The Developer shall be responsible for the cost of
street light installation consistent with a street lighting plan approved by the City. The Developer shall pay
a cash fee to the City in the amount of $2,000.00. The charge is calculated as follows:
4 Lights X $500.00/1-ight = $2,000.00
27. LANDSCAPING. Landscaping shall be installed in accordance with the approved
landscape plan. The Developer shall post a $73,000.00 landscaping security at the time of final plat
approval to ensure that the landscaping is installed in accordance with the approved plan.
28. SPECIAL PROVISIONS. The following special provisions shall apply to plat development:
A. Implementation of the conditions listed in the Findings of Fact approved by the City Council on
October 12, 2026.
B. Otsego Waterfront District shall be developed in accordance with the PUD Development Stage
Plan submitted to the City subject to the stipulations, limitations, and conditions as approved by
the City Council.
C. All utility plans are subject to review and approval of the City Engineer.
D. The Developer shall pay Utility Availability Charges for Lot 1, Block 1, of the plat, at the time of
final plat approval.
E. The Developer shall pay Utility Connection Charges for the principal building on Lot 2, Block 1,
at the time a building permit is issued in accordance with the provisions of City Code.
F. All floodplain, grading, drainage, and erosion control plans and issues shall be subject to review
and approval of the City Engineer.
G. All easements shall be subject to review and approval of the City Engineer.
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H. The Developer shall grant to the City a temporary drainage and utility easement in a recordable
form approved by the City over Outlots A, B, and C, Otsego Waterfront District, to expire upon
either the outlots being final platted into lots and blocks or deeded to the City. The temporary
drainage and utility easements shall be simultaneously recorded with the final plat.
I. The Developer is required to submit the final plat in electronic format. The electronic format
shall be either AutoCAD.DWG file or a .DXF file. All construction record drawings (e.g.,
grading, utilities, streets) shall be in electronic format in accordance with standard City
specifications.
29. CONSTRUCTION ADMINISTRATION AND FEES FOR CITY SERVICES. The Developer
shall pay a fee for consulting engineering administration following approval of the Plat. City engineering
administration will include consultation with Developer and its engineer on status or problems regarding the
project, monitoring during the warranty period, general administration and processing of requests for
reduction in security. Fees for this service shall be the actual amount billed for those services, which are
estimated to be three percent (3%) of the estimated construction cost of the Improvements to be inspected,
assuming normal construction and project scheduling. The Developer shall pay for construction observation
performed by the City Engineer. Construction observation shall include part- or full-time observation, as
determined by the City Engineer, of proposed street, sanitary sewer, water and storm drainage construction
and will be billed on hourly rates actually required for said inspection, which are estimated to be five percent
(5%) of the estimated construction cost of the Improvements to be inspected. In the event of prolonged
construction or unusual problems, the City will notify the Developer of anticipated cost overruns for
engineering administration and observation services. Any amounts for engineering administration not
utilized from this escrow fund shall be returned to the Developer when all improvements have been
completed, all financial obligations to the City satisfied, and the required "as constructed" plans have been
received by the City.
The escrow and fee account shall also include estimated fees for Legal expenses actually
incurred (with any excess funds, if any, returned to Developer as indicated in this Contract), City
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Administrative Fee (a flat fee due upon execution of this Agreement), Trunk Water and Sewer Access Fees
(a flat fee due upon execution of this Agreement), Park and Trail Dedication Fees (a flat fee due upon
execution of this Agreement), and shall be as stated by the Financial Summary.
This escrow amount shall be submitted to the City prior to the City executing this Agreement.
All administrative and legal fees related to plan review, drafting of this Agreement and any other necessary
items shall be paid to the City prior to execution of this Agreement. Any amounts for legal and engineering
not utilized from this escrow fund shall be returned to the Developer when all improvements have been
completed, all financial obligations to the City satisfied, and the required "as constructed" plans have been
received by the City.
All other amounts listed as flat fees are non-refundable and available immediately for City use
when posted.
30. SECURITY. To ensure compliance with the terms of this Contract, and construction of all
public improvements, and satisfaction of all other obligations, the Developer shall furnish the City with a
cash escrow or Irrevocable Standby Letter of Credit with automatic renewal provisions in the amount as
required under this Contract. The security amount shall be one hundred twenty five percent (125%) of the
City Engineer's estimated cost of all public improvements and/or private improvements required by the
Subdivision Ordinance or Zoning Ordinance. The Developer shall provide an additional security equal to six
and one-half (6.5%) of the estimated cost of the required public and/or private improvements for use by the
City for the purpose of assuming responsibility for design, bidding, and construction administration of the
required improvement in the event of a default by the Developer as provided for by this contract.
The issuer and form of the security (other than cash escrow) shall be subject to City approval in its
reasonable discretion. The security shall be issued by a banking institution in good standing as determined
by the City and approved by the City Administrator, The City shall have the ability to draw on the security at
a bank or branch bank located within fifty (50) miles of the City Hall. The security shall contain an automatic
renewal provision and shall not expire until all the Development is complete and fully and finally accepted by
the City, and all terms of this Contract are satisfied.
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The City may draw down the security, on five (5) business days written notice to the Developer, for
any violation of the terms of this Contract or without notice if the security is allowed to lapse prior to the end
of the required term. If the required public improvements are not completed at least thirty (30) days prior to
the expiration of the security, the City may also draw it down without notice. If the security is drawn down,
the proceeds shall be used to cure the default.
Upon receipt of proof satisfactory to the City that work has been completed and financial obligations
to the City have been satisfied, with City approval not to be unreasonably withheld or delayed, the security
shall be reduced from time to time in proportion to the work completed, but not below ten percent (10%)
which is the amount of the warranty security. For purposes of this Section, the warranty period shall be a
twelve (12) month period after the applicable work has been completed, except with respect to streets, for
which the warranty period shall be two years as addressed elsewhere in this Contract.
This security amount shall be submitted to the City prior to execution of the Contract. All
administrative and legal fees related to plan review, drafting of this Contract and any other necessary items
shall be paid to the City prior to execution of the Contract. Upon completion of the work contemplated
hereunder and expiration of the warranty period, the remaining security shall be promptly released to
Developer.
31. SUMMARY OF SECURITY REQUIREMENTS. The amount of the security described
above is calculated as follows:
CONSTRUCTION COSTS:
A. Sanitary Sewer and Lift Station - Lateral
B. Watermain - Lateral
C. Storm Sewer — Lateral
D. Streets, Trail and Sidewalks
CONSTRUCTION SUB -TOTAL
OTHER COSTS:
A. Site Grading, Erosion & Sediment Control & Wetland Protection
B. Engineering & Surveying Construction Services (6.5%)
C. Landscaping
$107,575.00
176,830.00
174,950.00
353,229.00
$812,584.00
$19,470.00
52,817.96
73.000.00
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OTHER COSTS SUB -TOTAL $145,287.96
TOTAL — SUBTOTAL $957,871.96
TOTAL IRREVOCABLE LETTER OF CREDIT $1,197,339.95
FOR SECURITY (125% OF SUBTOTAL
ESCROW
A. City Legal Expenses (Est. 1.0% of $812,584.00) $8,125.84
B. City Construction Observation (Est. 8.0% of $812,584.00) 65,006.72
C. GIS Data Entry Fee $250.00
ESCROW TOTAL $73,382.56
This breakdown is not a restriction on the use of the security.
32. SUMMARY OF CASH REQUIREMENTS. The following is a summary of the cash
requirements under this Contract which must be furnished to the City prior to the City Council signing the
final plat:
A. City Administrative (Est. 1.0% of $812,584,00)
B. Trunk Sewer Access Fee (SAC)
C. Trunk Water (WAC)
D. Trunk Storm Water Management Impact Fee
E. Park And Trail Dedication
F. Wetland, Street &Traffic Control Signs
G. Street Lights
TOTAL CASH REQUIREMENTS
$8,125.84
140,982.66
204,338.16
43,723.94
533,250.00
3,250.00
2,000.00
$935,670.60
33. WARRANTY. The Developer warrants all improvements required to be constructed by it
pursuant to this Contract against poor material and faulty workmanship, other than as set forth hereafter in
this Section 32, for a period of one (1) year. The warranty period for streets is two (2) years as specified in
this Contract. The warranty period for underground utilities is two (2) years and shall commence following
completion and acceptance by City Council. A minimum of ten percent (10%) of the total security as
specified above in the portion of Section 31 of this Contract shall be retained as warranty security
calculated as follows.
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WARRANTY RETAINAGE
A.
Sanitary Sewer
$16,136.25
B.
Watermain
26,524.50
C.
Storm Sewer
26,242.50
D.
Streets
52,984.35
E.
Erosion & Sedimentation Control
973.50
TOTAL WARRANTY RETAINAGE FROM LETTER OF CREDIT
$122,861.10
The Developer is not required to post this amount separately but rather this amount shall be
retained for warranty purposes from the total security posted according to Section 33 of this Contract until
warranty obligations are satisfied.
34. RESPONSIBILITY FOR COSTS.
A. Except as otherwise specified herein, the Developer shall pay all costs incurred by it or the City
in conjunction with the development of the plat, including but not limited to Soil and Water
Conservation District charges, legal, planning, engineering and construction observation
inspection expenses incurred in connection with approval and acceptance of the plat, the
preparation of this Contract, review of construction plans and documents, and all costs and
expenses incurred by the City in monitoring and inspecting development of the plat.
B. The Developer shall hold the City and its officers, employees, and agents harmless from claims
made by itself and third parties for damages sustained or costs incurred resulting from plat
approval and development. The Developer shall indemnify the City and its officers, employees,
and agents for all costs, damages, or expenses which the City may pay or incur in
consequence of such claims, including attorneys' fees.
C. The Developer shall reimburse the City for costs incurred in the enforcement of this Contract,
including engineering and attorneys' fees.
D. The Developer shall pay, or cause to be paid when due, and in any event before any penalty is
attached, all special assessments referred to in this Contract. This is a personal obligation of
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the Developer and shall continue in full force and effect even if the Developer sells one or more
lots, the entire plat, or any part of it.
E. The Developer shall pay in full all bills submitted to it by the City for obligations incurred under
this Contract within thirty (30) days after receipt. If the bills are not paid on time, the City may
halt plat development and construction until the bills are paid in full. Bills not paid within thirty
(30) days shall accrue interest at the rate of eighteen percent (18%) per year. Additionally, the
Developer shall pay in full all bills submitted to it by the City prior to any reductions in the
security for the development.
F. In addition to the charges and special assessments referred to herein, other charges and
special assessments may be imposed such as but not limited to sewer availability charges
("SAC"), City water connection charges, City sewer connection charges, and building permit
fees.
35. DEVELOPER'S DEFAULT. In the event of default by the Developer as to any of the work
to be performed by it hereunder, the City may, at its option, perform the work and the Developer shall
promptly reimburse the City for any expense incurred by the City, provided the Developer, except in an
emergency as determined by the City, is first given notice of the work in default, not less than forty-eight
(48) hours in advance. This Contract is a license for the City to act, and it shall not be necessary for the
City to seek a Court order for permission to enter the land. When the City does any such work, the City
may, in addition to its other remedies, assess the cost in whole or in part.
36. MISCELLANEOUS.
A. The Developer represents to the City that the plat complies with all city, county, state, and
federal laws and regulations, including but not limited to: subdivision ordinances, zoning
ordinances, and environmental regulations. If the City determines that the plat does not
comply, the City may, at its option, refuse to allow construction or development work in the plat
until the Developer does comply. Upon the City's demand, the Developer shall cease work until
there is compliance.
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2401790 Otsego Waterfront District
B. Third parties shall have no recourse against the City under this Contract.
C. Breach of the terms of this Contract by the Developer shall be grounds for denial of building
permits, including lots sold to third parties.
D. If any portion, section, subsection, sentence, clause, paragraph, or phrase of this Contract is for
any reason held invalid, such decision shall not affect the validity of the remaining portion of this
Contract.
E. Grading, curbing, and one lift of asphalt shall be installed on all public and private streets prior
to issuance of any building permits.
F. If building permits are issued prior to the acceptance of public improvements, the Developer
assumes all liability and costs resulting in delays in completion of public improvements and
damage to public improvements caused by the City, Developer, its contractors, subcontractors,
material men, employees, agents, or third parties. No sewer and water connections or
inspections may be conducted and no one may occupy a building for which a building permit is
issued on either a temporary or permanent basis until the streets needed for access have been
paved with a bituminous surface and the utilities are accepted by the City Engineer,
G. The action or inaction of the City shall not constitute a waiver or amendment to the provisions of
this Contract. To be binding, amendments or waivers shall be in writing, signed by the parties
and approved by written resolution of the City Council. The City's failure to promptly take legal
action to enforce this Contract shall not be a waiver or release.
H. This Contract shall run with the land and may be recorded against the title to the property. In
the event this Contract is recorded, upon request by Developer, the City covenants to provide a
recordable Certificate of Completion within a reasonable period of time following the request,
upon the completion of the work and responsibilities required herein, payment of all costs and
fees required and compliance with all terms of the Contract. A release of this Contract may be
provided in the same manner and subject to the same conditions as a Certificate of Completion
provided there are no outstanding or ongoing obligations of Developer under the terms of this
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Contract. The Developer covenants with the City, its successors and assigns, that the
Developer is well seized in fee title of the property being final platted and/or has obtained
consents to this Contract, in the form attached hereto, from all parties who have an interest in
the property; that there are no unrecorded interests in the property being final platted; and that
the Developer will indemnify and hold the City harmless for any breach of the foregoing
covenants.
I. Insurance. Prior to execution of the final plat, Developer and its general contractor shall
furnish to the City a certificate of insurance showing proof of the required insurance required
under this Paragraph. Developer and its general contractor shall take out and maintain or
cause to be taken out and maintained until six (6) months after the City has finally accepted
the public improvements, such insurance as shall protect Developer and its general contractor
and the City for work covered by the Contract including workers' compensation claims and
property damage, bodily and personal injury which may arise from operations under this
Contract, whether such operations are by Developer and its general contractor or anyone
directly or indirectly employed by either of them. The minimum amounts of insurance shall be
as follows:
Commercial General Liability (or in combination with an umbrella policy)
$2,000,000 Each Occurrence
$2,000,000 Products/Completed Operations Aggregate
$2,000,000 Annual Aggregate
The following coverages shall be included:
Premises and Operations Bodily Injury and Property Damage
Personal and Advertising Injury
Blanket Contractual Liability
Products and Completed Operations Liability
Automobile Liability
$2,000,000 Combined Single Limit — Bodily Injury & Property Damage
Including Owned, Hired & Non -Owned Automobiles
Workers Compensation
Workers' Compensation insurance in accordance with the statutory requirements of the
State of Minnesota, including Employer's Liability with minimum limits are as follows:
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2401790 Otsego Waterfront District
• $500, 000 — Bodily Injury by Disease per employee
• $500, 000 —Bodily Injuryby Disease aggregate
• $500, 000 — Bodily Injury by Accident
The Developer's and general contractor's insurance must be "Primary and Non -Contributory".
All insurance policies (or riders) required by this Contract shall be (i) taken out by and
maintained with responsible insurance companies organized under the laws of one of the
states of the United States and qualified to do business in the State of Minnesota, (ii) shall
name the City, its employees and agents as additional insureds (CGL and umbrella only) by
endorsement which shall be filed with the City and (iii) shall identify the name of the plat. A
copy of the endorsement must be submitted with the certificate of insurance.
Developer's and general contractor's policies and Certificate of Insurance shall contain a
provision that coverage afforded under the policies shall not be cancelled without at least
thirty (30) days' advanced written notice to the City, or ten (10) days' notice for non-payment
of premium.
An Umbrella or Excess Liability insurance policy may be used to supplement Developer's
or general contractor's policy limits on a follow -form basis to satisfy the full policy limits
required by this Contract.
J. Indemnification. To the fullest extent permitted by law, Developer agrees to defend, indemnify
and hold harmless the City, and its employees, officials, and agents from and against all
claims, actions, damages, losses and expenses, including reasonable attorney fees, arising
out of Developer's negligence or its performance or failure to perform its obligations under this
Contract. Developer's indemnification obligation shall apply to Developer's general
contractor, subcontractor(s), or anyone directly or indirectly employed or hired by Developer,
or anyone for whose acts Developer may be liable. Developer agrees this indemnity
obligation shall survive the completion or termination of this Contract.
K. Each right, power or remedy herein conferred upon the City is cumulative and in addition to
every other right, power or remedy, express or implied, now or hereafter arising, available to
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240179v1 Otsego Waterfront District
City, at law or in equity, or under any other agreement, and each and every right, power and
remedy herein set forth or otherwise so existing may be exercised from time to time as often
and in such order as may be deemed expedient by the City and shall not be a waiver of the
right to exercise at any time thereafter any other right, power or remedy.
L. The Developer may not assign this Contract without the written permission of the City Council.
The Developer's obligation hereunder shall continue in full force and effect even if the
Developer sells one or more lots, the entire plat, or any part of it, until the City's issuance of a
Certificate of Completion and Release.
M. Retaining walls over four feet in height shall be constructed in accordance with plans and
specifications prepared by a structural or geotechnical engineer licensed by the State of
Minnesota. Following construction, a certification signed by the design engineer shall be filed
with the Building Official evidencing that the retaining wall was constructed in accordance with
the approved plans and specifications. All retaining walls identified on the development plans
and by special conditions referred to in this Contract shall be constructed before any other
building permit is issued for a lot on which a retaining wall is required to be built. All retaining
walls must comply with the City's engineering manual and the City's zoning ordinance.
N. Should the Developer convey any lot or lots in the Development to a third party, the City and the
owner of that lot or those lots may amend this Development Contract or other city approvals or
agreements for development or use of those lots without the approval or consent of the
Developer or other lot owners in the Development. Private agreements between the owners of
lots within the Development for shared service or access and related matters necessary for the
efficient use of the Development shall be the responsibility of the lot owners and shall not bind
or restrict City authority to approve applications from any lot owner in the Development.
37. NOTICES. Required notices to the Developer shall be in writing, and shall be either hand
delivered to the Developer, its employees or agents, or mailed to the Developer by certified mail at the
following address: Attn: Jesse Hartung 12301 Central Ave NE Suite 209 Blaine, Minnesota 55434.
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2401790 Otsego Waterfront District
Notices to the City shall be in writing and shall be either hand delivered to the City Administrator, or
mailed to the City by certified mail in care of the City Administrator at the following address: Otsego City
Hall, 13400 90th Street NE, Otsego, Minnesota 55330.
[The remainder of this page has been intentionally left blank.
Signature pages follow.]
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240179v1 Otsego Waterfront District
CITY OF OTSEGO
10
(SEAL)
E
STATE OF MINNESOTA )
)ss,
COUNTY OF WRIGHT )
Jessica L. Stockamp, Mayor
Audra Etzel, City Clerk
The foregoing instrument was acknowledged before me this day of ,
2026, by Jessica L. Stockamp and by Audra Etzel, the Mayor and City Clerk of the City of Otsego, a
Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its
City Council.
NOTARY PUBLIC
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240179v1 Otsego Waterfront District
DEVELOPER:
MODERN CONSTRUCTION OF MINNESOTA, INC.
1."V
STATE OF MINNESOTA )
)ss.
COUNTY OF )
Jesse Hartung
Its Chief Executive Officer
The foregoing instrument was acknowledged before me this day of ,
2026, by Jesse Hartung the Chief Executive Officer of Modern Construction of Minnesota, Inc., a
Minnesota corporation, on behalf of said entity.
NOTARY PUBLIC
DRAFTED BY:
CAMPBELL,KNUTSON
Professional Association
Grand Oak Office Center 1
860 Blue Gentian Road, Suite 290
Eagan, MN 55121
Telephone: 651-452-5000
DSK/smt
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2401790 Otsego Waterfront District
MORTGAGE HOLDER CONSENT
TO
DEVELOPMENT CONTRACT
LPG LAND, LLC, a Minnesota limited liability company, which holds a Mortgage executed by
Modern Construction of Minnesota, Inc., a Minnesota Corporation, ("Mortgagor"), in favor of LPG Land, LLC,
a Minnesota limited liability company, ("Mortgagee"), dated July 11, 2023, and filed July 14, 2023 in the
Office of the County Recorder, Wright County, Minnesota as Abstract Document No. A1534253, on all or
part of the subject property, the development of which is governed by the foregoing Development Contract,
agrees that the Development Contract shall remain in full force and effect even if it forecloses on its
mortgage.
Dated this day of 12026.
STATE OF MINNESOTA
)ss.
COUNTY OF
LPG LAND, LLC
in
Its
[print name]
[title]
The foregoing instrument was acknowledged before me this day of
2026, by ,
the of LPG LAND, LLC, a Minnesota limited
liability company, on behalf of said entity.
NOTARY PUBLIC
DRAFTED BY:
CAMPBELLKNUTSON
Professional Association
Grand Oak Office Center 1
860 Blue Gentian Road, Suite 290
Eagan, Minnesota 55121
651-452-5000
DSK/smt
24
240179v1 Otsego Waterfront District
EXHIBIT "A"
TO
DEVELOPMENT CONTRACT
Legal Description of Property Being Final Platted as
OTSEGO WATERFRONT DISTRICT
Lot 1, Block 1, Lot 2, Block 1, Lot 1, Block 2, and Outlot A, all in Nathe 2nd Addition, Wright County,
Minnesota, according to the recorded plat thereof.
[To be platted as Otsego Waterfront District, Wright County, Minnesota.]
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2401790 Otsego Waterfront District
[BANK LETTERHEAD]
IRREVOCABLE LETTER OF CREDIT
TO: City of Otsego
City Hall
13400 90th Street NE
Otsego, Minnesota 55330
Dear Sir or Madam:
No. _
Date:
We hereby issue, for the account of (Name of Developer) and in your favor, our Irrevocable
Letter of Credit in the amount of $ available to you by your draft drawn on sight on the
undersigned bank.
The draft must:
a) Bear the clause, 'Drawn under Letter of Credit No. dated 2 ,
of (Name of Bank) ";
b) Be signed by the City Administrator or Finance Director of the City of Otsego.
c) Be presented for payment at (Address of Bank) , on or before 4:00 p.m. on November 30,
2
This Letter of Credit shall automatically renew for successive one-year terms unless, at least forty-five
(45) days prior to the next annual renewal date (which shall be November 30 of each year), the Bank delivers
written notice to the Otsego Finance Director that it intends to modify the terms of, or cancel, this Letter of Credit.
Written notice is effective if sent by certified mail, postage prepaid, and deposited in the U.S. Mail, at least forty-
five (45) days prior to the next annual renewal date addressed as follows: Otsego Finance Director, Otsego City
Hall, 13400 90th Street NE, Otsego, MN 55330, and is actually received by the Finance Director at least thirty
(30) days prior to the renewal date.
DEMAND(S) FOR PAYMENT MAY ALSO BE MADE BY FACSIMILE TRANSMISSION TO OR
SUCH OTHER FAX NUMBER AS (NAME OF ISSUING BANK) MAY IDENTIFY IN A WRITTEN NOTICE TO
YOU. TO THE EXTENT PRESENTATION IS MADE BY FACSIMILE TRANSMISSION YOU MUST PROVIDE
TELEPHONE NOTIFICATION THEREOF TO (NAME OF ISSUING BANK) AT TELEPHONE NUMBER:
PRIOR TO OR SIMULTANEOUSLY WITH THE SENDING OF SUCH FACSIMILE
TRANSMISSION. HOWEVER, THE ABSENCE OF SUCH TELEPHONE CONFIRMATION AS DESCRIBED
ABOVE DOES NOT AFFECT OUR OBLIGATION TO HONOR SUCH DRAWING, IF SUCH DRAWING IS
OTHERWISE IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS IRREVOCABLE LETTER
OF CREDIT. IF DEMAND FOR PAYMENT IS MADE BY FAX, PRESENTATION OF ORIGINAL
DOCUMENTS IS NOT REQUIRED.
•E
DEMAND(S) FOR PAYMENT TO BE MADE VIA EMAIL TO PRESENTATION OF
ORIGINAL DOCUMENTS IS NOT REQUIRED.
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2401790 Otsego Waterfront District
This Letter of Credit sets forth in full our understanding which shall not in any way be modified,
amended, amplified, or limited by reference to any document, instrument, or agreement, whether or not referred
to herein.
This Letter of Credit is not assignable. This is not a Notation Letter of Credit. More than one draw may
be made under this Letter of Credit.
This Letter of Credit is issued subject to the International Standby Practices 1998, International Chamber
of Commerce Publication No. 590 ("ISP98"). This letter of Credit shall also be governed by the laws of the State
of Minnesota, including the Minnesota Uniform Commercial Code, to the extent not inconsistent with ISP98.
We hereby agree that a draft drawn under and in compliance with this Letter of Credit shall be duly
honored upon presentation.
We hereby agree that a draft drawn under and in compliance with this Letter of Credit shall be duly
honored upon presentation.
[NAME OF BANK]
BY:
Its
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2401790 Otsego Waterfront District