Title
RESOLUTION AUTHORIZING A FIRST AMENDMENT TO DEVELOPMENT AGREEMENT WITH ST. MARY’S DULUTH CLINIC HEALTH SYSTEM FOR THE DESIGN AND CONSTRUCTION OF NEW BUS SHELTERS AS PART OF THE DULUTH REGIONAL EXCHANGE DISTRICT TO INCREASE THE AMOUNT FROM $627,444.51 TO $723,374.54.
Body
CITY PROPOSAL:
WHEREAS, Resolution No. 23-0869 authorized the city to enter into a development
Agreement (the “Development Agreement”) with St. Mary’s Duluth Clinic Health System d/b/a Essentia Health (“Essentia”) for the design and construction of new bus shelters located on Superior St. and 2nd St. (the “Bus Shelters”) as part of the Regional Exchange District Project, pursuant to which Essentia will cause the design and construction of the Bus Shelters and pursuant to which the city will reimburse Essentia for costs thereof in an amount not to exceed $627,444.51.
WHEREAS, the design and construction of the Bus Shelters was funded with State of Minnesota appropriation bond proceeds authorized under the Regional Exchange District legislation, Minnesota Laws 2019, 1st Special Session Chapter 6, Article 10, as amended by Section 1 of Laws of Minnesota 2021, 1st Special Session Chapter 9 (the “Legislation”);
WHEREAS, the actual costs to design and construct the Bus Shelters is in excess of the amount allocated in the Development Agreement; and
WHEREAS, the city and Essentia desire to amend the Development Agreement to increase the maximum amount to provide for reimbursement up to the maximum amount authorized in the Legislation.
NOW, THEREFORE, BE IT RESOLVED, that the proper city officials are hereby authorized to enter into a first amendment to agreement for the design and construction of bus shelters located on Superior St. and 2nd St, substantially in the form attached as Exhibit 1, with St. Mary’s Duluth Clinic Health System, a Minnesota nonprofit corporation, pursuant to which Essentia will cause the design and construction of the Bus Shelters and pursuant to which the city will reimburse Essentia for costs thereof in the amount not to exceed $723,374.54, payable from Fund 455 Regional Exchange District; as authorized pursuant to Minnesota Laws 2019, First Special Session, Chapter 6, Article 10, as amended by Minnesota Laws 2021, First Special Session, Chapter 9, Section 1.
Statement of Purpose
STATEMENT OF PURPOSE: The purpose of this resolution is to approve a first amendment to the development agreement with St. Mary’s Duluth Clinic Health System d/b/a Essentia Health (“Essentia”) for the design and construction of new bus shelters located on Superior St. and 2nd St. (the “Bus Shelters”) as part of the Regional Exchange District. This project is payable from appropriation bond proceeds authorized as Project 8 pursuant to the Legislation (defined above). Project 8 is described as site improvements made upon private property (including retaining walls, public sidewalks, public stairs, and other related infrastructure) necessary to support construction of the Medical Entity West hospital and there are two development agreements for different components of Project 8. The Development Agreement subject to this amendment and resolution relates to the Bus Shelters only.
The maximum amount allocated toward the Bus Shelters in the Development Agreement (defined above) is $627,444.51 (the “Original Amount”), but the actual costs to design and construct exceed the Original Amount. The Legislation allows for additional funds above the Original Amount to be used toward the Bus Shelters up to a certain amount, and this first amendment allows for the city to reimburse Essentia for the maximum allowed in the Legislation. $23,344.43 of the cost of the Bus Shelters will not be reimbursed to Essentia because it exceeds the amount authorized by the Legislation, and Essentia is solely responsible for such amount.
Resolution No. 24-0616 authorizes an amendment to the grant agreement with the State of Minnesota to release funding for Project 8 under the amounts listed in the development agreements (unamended). There will be a sixth amendment to the grant agreement with the State of Minnesota in the near future so that the City can obtain the funds authorized under this first amendment with Essentia; however, the State requires the City to amend the Development Agreement before amending the grant agreement with the State.