2013-347ORDINANCE NO. 2013-347
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY
MANAGER TO SURRENDER TO DRP COUNTRY LAKES, LLC THAT CERTAIN
IRREVOCABLE STANDBY LETTER OF CREDIT DATED OCTOBER 1, 2009 DRAWN ON
J.P. MORGAN CHASE BANK IN THE AMOUNT OF $176,143.93 IN WHICH
WYNNE /JACKSON LAKES DEVELOPMENT, L.P. IS THE APPLICANT AND THE CITY
OF DENTON, TEXAS IS THE BENEFICIARY; AND FURTHER RELEASING DRP
COUNTRY LAKES, LLC, A SUCCESSOR REAL PROPERTY OWNER TO
WYNNE /JACKSON LAKES DEVELOPMENT, L.P. FROM ANY FINANCIAL
OBLIGATION REGARDING THAT CERTAIN LETTER AGREEMENT DATED
DECEMBER 29, 2000 BY AND BETWEEN THE CITY OF DENTON AND
WYNNE /JACKSON LAKES DEVELOPMENT, L.P.; AUTHORIZING THE ACCEPTANCE
OF A REPLACEMENT IRREVOCABLE STANDBY LETTER OF CREDIT FROM THE
PRESENT OWNER OF THAT CERTAIN REAL PROPERTY BEING GENERALLY
KNOWN AS COUNTRY LAKES, IN THE CITY OF DENTON, TEXAS, BLOOMFIELD
HOMES, L.P., IN THE AMOUNT OF $176,143.93; PROVIDING AN EFFECTIVE DATE.
WHEREAS, certain financial obligations were incurred with respect to water and
wastewater line improvements which the City constructed in accordance with an "Annexation
Agreement" entered into by and between the City and Violet Properties Associate, L.P. on the 4th
day of August, 1999, which Annexation Agreement was executed pursuant to a certain
"Compromise Settlement Agreement and Release of All Claims" ( "Compromise ") entered into
by and between the City of Denton, Texas and Denton County Fresh Water Supply District Nos.
1 -A and 5 and Violet Properties Associates, LP. Also executed on the 4th day of August, 1999;
which Compromise settled pending litigation entitled City of [ ewon, Texas v. Denton t "crtlrlt w
Fresh Water Supply District No. lA and Denton County Fresh Water Supply District No. 5, and
Violet Properties Associate, L.P., Cause No, 99- 40158 -362, in the 362°1 Judicial District Court
in and for Denton County, Texas; and
WHEREAS, in the Annexation Agreement referenced above there was a requirement that
the record owner and any successor owner provide the City with security regarding the
repayment of the debt incurred by the City to construct such water and wastewater
improvements, and said Agreement provided that whomever was the owner of record of the land
would provide the City, as further security, a letter of credit in the amount of $176,143.93; and
WHEREAS, later on December 29, 2000, the City of Denton and Wynne /Jackson Lakes
Development, L.P. ( "Wynne /Jackson ") entered into a letter agreement ( "Letter Agreement ")
regarding the cost of the water and wastewater revenue bond debt which was incurred by the
City; in such agreement; and in furtherance thereof, Wynne /Jackson posted a letter of credit with
the City, currently in effect, on the 1St day of October, 2009 (the "2009 LOC "); and
WHEREAS, thereafter, on the 7th day of June, 2010, Wynne /Jackson conveyed the
affected realty to DRP Country Lakes, LLC ( "DRP "), a successor real property owner; and
thereafter, on the 29th day of August, 2013, DRP conveyed the affected realty to the present
owner of record, Bloomfield Homes, L.P.( "Bloomfield "); and
WHEREAS, DRP has requested that it be allowed to recover the letter of credit currently
held by the City, and that it be released from further financial liability under the Annexation
Agreement and the Letter Agreement; Staff has indicated to DRP that it is necessary and
appropriate for the new owner of record to post substitute collateral in the form of a letter of
credit in the amount of $176,146.93 with the City before the City releases DRP; Staff has
obtained such letter of credit from Bloomfield, and recommends to the Council that it surrender
the letter of credit to DRP, release DRP from financial liability under the Annexation Agreement
and the Letter Agreement, and accept the new letter of credit from Bloomfield in the amount of
$176,143.93; NOW THEREFOR
THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS:
SECTION 1. The preamble stated hereinabove is hereby incorporated into this
ordinance.
SECTION 2. The City Manager or his designee is hereby authorized to surrender the
October 1, 2009 letter of credit posted by Wynne /Jackson to DRP Country Lakes, LLC; and is
further authorized to accept the $176,143.43 letter of credit from Bloomfield Homes, L.P. as
further security for repayment of the outstanding indebtedness owing to the City; and the Council
authorizes the release of DRP from any further financial liability under the Annexation
Agreement and the Letter Agreement.
SECTION „3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the _ l day of °k. , 2013,
,f
MAk,K A. 1311 :ROtL G11S, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By.w. .
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
By; .. 9rw.w ....._.. __
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