Title
Resolution to Authorize Settlement of the Briarwood Capital Cost Recovery Fee Dispute and Approve a Settlement Agreement and Mutual Release of Claims
Staff
Prepared by: Jennifer Richards, Senior Assistant City Attorney
Reviewed by: Milton Dohoney Jr. City Administrator
Atleen Kaur, City Attorney
Body
Whereas, The City and Briarwood Outparcel, LLC, Briarwood Multifamily Owner, LLC, Mall at Briarwood, LLC, and SPG Holdings, LLC (collectively “Briarwood”) dispute Briarwood’s obligation to pay water and sewer capital cost recovery charge fees as required by Chapters 27 and 28 of the Code of Ordinances of the City of Ann Arbor, in connection with the installation of water meters and extending fire service to the new multi-family residential project (Sears Redevelopment) located at 920 Briarwood Circle and the new Dick’s Sporting Goods retail store located at 950 Briarwood Circle (“the Dispute”);
Whereas, Briarwood disputes that it must pay the following fees with respect to 920 Briarwood Circle: (i) the water capital recovery fee of $231,372.00 and the sewer capital recovery fee of $547,272.00 applicable to an 8-inch domestic water service with a 6-inch water meter with credits applied, and (ii) the water capital recovery fee of $82,137.00 for a 6-inch fire service with credits applied, and Briarwood disputes the following fees with respect to 950 Briarwood Circle: (i) the water capital recovery fee of $8,475.00 and the sewer capital recovery fee of $19,661.00 applicable to a 2-inch domestic water service with a 1.5-inch water meter with credits applied, and (ii) the water capital recovery fee of $82,137.00 for a 6-inch fire service with credits applied (collectively the “Disputed Fees”);
Whereas, Briarwood’s dispute of the Disputed Fees is based on the terms of the Grant of Easement and Dedication agreements dated April 14, 1975, recorded in Liber 1525, Page 506 and Liber 1525, Page 515, Washtenaw County Records (the “1975 Easements”) which contain language reserving rights to “tap and connect” into the water and sewer mains “without any additional charge therefor;”
Whereas, It is the City’s position that the Disputed Fees are legally and appropriately levied and thus, are due and payable by Briarwood as required by City Code;
Whereas, To avoid the time, expense and uncertainty of litigation and to allow the construction of needed multi-family housing to move forward, the City and Briarwood have reached an agreement to resolve the Dispute without litigation wherein Briarwood will pay the Disputed Fees, and in exchange for executing new easements without the reservation language to supersede the 1975 easements, Briarwood will receive a 25% easement credit against the payment of the Disputed Fees;
Whereas, For any future development, Briarwood or future development owners will also pay the applicable water and sewer capital cost recovery charges applicable to improvements in a future development, and in exchange for executing new easements without the reservation language to supersede the 1975 easements, Briarwood or future development owners will receive a 10% easement credit against the payment of the applicable fees for properties still covered by the 1975 easements;
Whereas, After the tenth anniversary of the effective date of the attached settlement agreement, Briarwood agrees any water and sewer capital cost recovery charges fees applicable to improvements in any future development will be paid in full by Briarwood or future development owners and neither Briarwood nor future development owners will receive any credits or reductions, except as provided in the Code of the City of Ann Arbor;
Whereas, The settlement agreement is applicable to and binding on Briarwood, its affiliates, its present and future members, and the present and future affiliates of those members, their assigns and successors, and any future owners;
Whereas, This settlement will be memorialized in the attached Settlement Agreement between the City and Briarwood, which is a full and final settlement of the Dispute and mutual release of all claims; and
Whereas, The City Attorney’s Office has advised City Council on this matter in attorney-client privileged and confidential legal advice memorandum;
RESOLVED, That City Council authorizes the City Attorney to fully resolve the Dispute as detailed above and in accordance with the attached Settlement Agreement, contingent on the receipt of the attached Settlement Agreement signed by the City and Briarwood, which shall be subject to City Attorney approval as to form and substance;
RESOLVED, That the Mayor and Clerk are authorized and directed to sign the settlement agreement; and
RESOLVED, That the City Administrator and City Attorney are authorized and directed to take appropriate actions to implement this resolution, including signing and implementing the settlement agreement.