HomeMy WebLinkAbout2020-3040CONSTRUCTION DISBURSEMENT AGREEMENT FOR OWNER'S FUNDS
THIS CONSTRUCTION LOAN DISBURSING AGREEMENT ("Agreement") is
entered into this 27th day of August, 2020 by and between First American Title Insurance Company ("Escrow Agent"), and the City of Columbia Heights, a municipal corporation ("Owner")
RECITALS
1.Owner has entered into construction contracts ("Construction Contracts") with RachelContracting LLC, Doran Companies, and Braun Intertec ("Contractors") pursuant to whichContractors have agreed to perfonn certain work or make certain improvements owned byOwner located at 3989 Central Avenue, 950 40th Avenue, and 961 Gould Avenue, Columbia
Heights, Anoka County, Minnesota.
2.Owner will deposit funds with Escrow Agent from time to time to pay Contractor("Owner's Funds").
3.Owner desires that Escrow Agent disburse Owner's Funds to pay advances made underthe Construction Contracts, and the Escrow Agent is willing to do so on the terms set forthherein.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and the sufficiency of which is hereby acknowledged, the parties agree as follows:
1.Escrow Agent is authorized and directed to disburse the Owner's Funds to:
a.Pay costs of construction of the improvements to be made to the Propertypursuant to the Construction Contracts.
b.Obtain lien waivers and satisfactions of liens and other encumbrances, if any,pursuant to statements of amounts due, which must be approved by Owner.
Contract # 2020-3040
2.Prior to each subsequent disbursement of the Owner's Funds hereunder, Escrow Agent
must be furnished the following items (collectively, the "Documents") via email to
Disbursing.mn@firstam.com:
a.An updated Owner's Sworn Construction Statement setting forth allcontractors, subcontractors and material suppliers with whom contracts havebeen entered into, the amount of each contract, the amount paid-to-date, the
amounts being requested, and the balances due (Exhibit "A").
b.An updated General Contractor's Sworn Construction Statement setting forthall contractors, subcontractors and material suppliers with whom contractshave been entered into, the amount of each contract, the amount paid-to-date,the amounts being requested, and the balances due (Exhibit "B").
c.A Request for Payment document signed by Contractors ( and approved byOwner) for the requested disbursement, along with written instructions todisburse the funds.
d.Sufficient funds to cover the requested disbursement.
e.Sufficient funds to cover unpaid Escrow charges.
f.Unconditional, up-to-date lien waivers from the previous draw for all
contractors, subcontractors and suppliers satisfactory to Escrow Agent,including also lienable interests such as architects, engineers and surveyors.
g.Invoices, affidavits, or substantiated evidence of payment to establish the costor value of the items or improvements for which disbursement is to be or has
been made.
h.With the final draw request, an updated Sworn Construction Statement,inclusive of all change orders, together with full and final unconditional lien
waivers from each Contractor for all work done and materials supplied forwhich payment has been made in full.
3.Not later than IO business days following receipt of the Documents, Escrow Agent will
notify Owner via email as to the sufficiency of the delivered Documents. If documents
are not satisfactory or are missing, Escrow Agent will advise Owner. If the documents aresupplied to the satisfaction of Escrow Agent and Owner, Escrow Agent will disbursedirectly to Contractors or other party identified in the relevant Request for Payment, theamounts shown therein; or if less, the amount approved by Owner. Upon Owner's
approval, Owner will transmit to Escrow Agent the funds in the amount of thedisbursement requested in the relevant draw request ( or so much thereof as Owner mayapprove), by transfer of such funds to Escrow Agent for deposit in Escrow Agent'sAccount No. 3017240000 maintained with First American Trust, FSB, 5 First American
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Way, Santa Ana, California, ABA No. 122241255. At the discretion of the Escrow Agent, payments of amounts due to subcontractors in any request may be made directly to the subcontractors.
4.Escrow Agent will order a search of the Anoka County records for the presence of any
mechanics liens. The search and notification will be limited exclusively to mechanicsliens and no other matters of title will be addressed.
5.Escrow Agent shall not be liable for interest on funds deposited with it.
6.No liability is assumed by Escrow Agent to Owner or any other party for protectionagainst mechanic's liens.
7.Escrow Agent will keep and maintain books and records in sufficient detail to reflect thedisbursements made by it pursuant to this Agreement. Owner may during normal
business hours examine the books and records of Escrow Agent pertaining to those
disbursements.
8.The parties acknowledge that Escrow Agent shall not be responsible for creating,furnishing or reporting any IRS 1099 notices or filings for any payments it disburses
under this Agreement for the parties.
9.The functions and duties assumed by Escrow Agent include only those described in thisAgreement, and Escrow Agent is not obligated to act except in accordance with the termsand conditions of this Agreement. Escrow Agent does not insure that the improvement
will be completed, that any improvement will be in accordance with the plans and
specifications, or that sufficient funds will be available for the completion ofimprovements. Escrow Agent may conclusively rely upon any document believed byEscrow Agent to be genuine and to have been signed or presented by the proper parties,consistent with reasonable due diligence on Escrow Agent's part.
10.Escrow Agent shall not be responsible for any losses of documents or funds while suchdocuments or funds are not in its custody. Documents or funds which are deposited inthe United States mail shall not be construed as being in the custody of Escrow Agent.
11.[It is anticipated that 6 draws will occur for the project.] Escrow Agent shall be paid thesum of Three Hundred Fifty and 00/Dollars ($350.00) per draw request for its servicesunder this Agreement. Escrow Agent reserves the right to charge additional fees shouldcircumstances warrant.
12.This Agreement shall be binding upon the parties hereto and their respective successorsand assigns.
13.This Agreement can be amended or modified only by a written Amendment signed by the
parties hereto.
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Senior Escrow Officer
EXHIBIT A
LEGAL DESCRIPTION
Real property in the City of Columbia Heights, County of Anoka, State of Minnesota, described as follows:
PARCEL 1 (Abstract and Torrens-Certificate of Title No. 142077):
Lot 32, Block 6, Reservoir Hills, Anoka County, Minnesota.
Lots 25 through 28, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, Anoka County, Minnesota.
The vacated alley adjacent to Lots 25 through 28, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, Anoka County, Minnesota.
Those parts of Lots 28 through 31, Block 6, Reservoir Hills; Lots 23, and 24, Block 1, Walton's
Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills; and of the vacated alley adjacent to
Lot 24, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills; lying southwesterly and westerly of the following described line: Beginning at a point on the south line of Block 1, Walton's Rearrangement, said point being 18.00 feet West of the southeast corner of Lot 23, of said Block 1, Walton's Rearrangement; thence Northerly on a line 18.00 feet West of and parallel with the east line of Lot 23 a distance of 87 .00 feet; thence on a straight line to a
point on the north line of Lot 30 of said Block 6, Reservoir Hills, said point being 4 7 .23 feet Easterly of the northwest corner of said Lot 30 and there terminating.
The following portion of the above description being registered land:
That part of Lot Twenty-three (23), Block One (1 ), Walton's Rearrangement of Lots Thirty-three (33)and Thirty-four (34), Block Six (6), Reservoir Hills, lying southwesterly and westerly of thefollowing described line: Beginning at a point on the South line of said Block 1, Walton'sRearrangement, said point being 18.00 feet West of the southeast corner of Lot 23 of said Block
1, Walton's Rearrangement; thence Northerly on a line 18.00 feet West of and parallel with saideast line of Lot 23, a distance of 87.00 feet; thence on a straight line to a point on the north lineof Lot 30 of said Block 6, Reservoir Hills, said point being 47.23 feet Easterly of the northwestcomer of said Lot 30 and there terminating.
PARCEL 2 (Abstract):
Those parts of Lots 27 through 31, Block 6, Reservoir Hills and those parts of Lots 23 and 24,
Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills and of the vacated alley abutting Block 1, "Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills", as dedicated in said plat, lying within the following described tract: Commencing at a point on the south line of said Block 1, Walton's Rearrangement distant 18.00 feet west of the southeast
comer of Lot 23, said Block 1, Walton's Rearrangement; thence northerly on a line 18.00 feet
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west of and parallel with the east line of said Lot 23, a distance of 87.00 feet, to the actual point of beginning of the tract to be described; thence continuing northerly on the extension of said line to the north line of Block 6, Reservoir Hills; thence westerly along said north line of Block 6, to a point being 47.23 feet easterly of the northwest comer of Lot 30, Block 6, Reservoir Hills; thence southeasterly, to the point of beginning;
Excepting therefrom Tract A, Registered Land Survey No. 250, Anoka County, Minnesota.
PARCEL 3 (Torrens-Certificate of Title No. 142076):
Tract A, Registered Land Survey No. 250, Anoka County, Minnesota.
PARCEL 4 (Torrens-Certificate of Title No. 116494)
Tract B, Registered Land Survey No. 250, Anoka County, Minnesota.
PARCEL 5 (Abstract)
Lots 24, 25 and 26, Block 6, Reservoir Hills. Lots 20, 21 and 22, Block 1, Walton's
Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, and all of the vacated alley adjacent to said Lots 20, 21 and 22. Those parts of Lots 27, Block 6, Reservoir Hills and of Lot 23, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills and of that part of the vacated alley abutting Block 1, "Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir
Hills", as dedicated in said plat, which lies Westerly of the Northerly extension of the East line of Lot 23, said Block 1, lying easterly of the following described line: Beginning at a point on the South line of said Block 1, Walton's Rearrangement, said point being 18.00 feet West from the Southeast comer of Lot 23 of said Block I, Walton's Rearrangement; thence Northerly on a line 18.00 feet West of and parallel with the East line of said Lot 23, to the North line of said Block
6, Reservoir Hills; Excepting therefrom Tract B, Registered Land Survey No. 250, Anoka County, Minnesota.
PARCEL 6 (Torrens-Certificate of Title No. 115040)
Lot 19, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, Anoka County, Minnesota.
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