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Home My WebLink About6.d. Request by Flint Hills Resources to extend the Roadway Agreement at the ATS terminal facility EXECUTIVE SUMMARY City Council Regular Meeting: November 21, 2017 AGENDA ITEM: Request by Flint Hills Resources to extend the Roadway Agreement at the ATS terminal facility AGENDA SECTION: Consent PREPARED BY: Anthony Nemcek, Planner AGENDA NO. 6.d. ATTACHMENTS: Location Map; Amendment to FHR Roadway Agreement; FHR Roadway Agreement Executive Summary dated September 2, 2014; FHR Roadway Agreement APPROVED BY: LJM RECOMMENDED ACTION: Motion to approve the Roadway Agreement with Flint Hills Resources and authorize the Mayor to enter into the Agreement. ISSUE Flint Hills Resources purchased the former site of Yocum Oil’s Rosemount Clean Energies facility to construct an ammonium thiosulfate (ATS) fertilizer distribution terminal. A roadway agreement between Yocum Oil and the City to delay paving of internal roadways at the site until September 1, 2014 was approved in 2011. When Flint Hills Resources purchased the property, an extension of the agreement was granted to accommodate the environmental assessment of the ATS terminal. The new agreement allowed paving of the facility roadways to be delayed until December 31, 2017. Work is continuing on the site, but due to the limited construction season in Minnesota paving is unable to be completed this year. Flint Hills Resources has requested that the roadway agreement be amended to extend the deadline for paving of the roadways within the site to December 7, 2018. RECOMMENDATION Staff recommends approval of the Amendment to the Roadway Agreement and authorization for the Mayor to sign the amendment. AMENDMENT TO ROADWAY IMPROVEMENT AGREEMENT THIS AMENDMENT to the AGREEMENT dated September 2, 2014 is made between the City of Rosemount (“City”) and Flint Hills Resources Pine Bend, LLC (“FHR”) as of the ____ day of _______________, 2017. 5. Following approval from the City, FHR agrees to use all commercially reasonable efforts to complete the construction of the Facility, subject to project cancellations or suspensions that FHR elects to make. If the Facility construction project is cancelled or suspended or otherwise delayed such that the start-up will not occur by December 31, 2017, the City and FHR agree that that the parties will discuss an additional amendment to this Agreement that would allow FHR to proceed with plans for a different use of the Property (if at that time FHR has any such plans for a different use) or that would set different dates for performance under this Agreement. If on December 31, 2017, the Property continues to be used in a manner that is substantially similar to how RD had used the facility, then (unless the City and FHR mutually agree on some other road improvement plans) the Property’s roads shall be improved by December 7, 2018 as illustrated on the South Service Road Paving Plan dated June 26, 2013. IN WITNESS WHEROF, the parties have executed this Agreement as of the day and year first above written. CITY OF ROSEMOUNT FLINT HILLS RESOURCES PINE BEND, LLC By: By: Its: Its: EXECUTIVE SUMMARY City Council Meeting Date: September 2, 2014 AGENDA ITEM: Flint Hills Resources Roadway Agreement at the former Rosemount Clean Energies (Yocum Oil) Site AGENDA SECTION: Consent PREPARED BY: Eric Zweber, Senior Planner AGENDA NO. ATTACHMENTS: Location Map; FHR Roadway Agreement; South Service Road Paving Plan; Rosemount Distribution Executive Summary dated September 20, 2011; Rosemount Distribution Roadway Agreement APPROVED BY: Motion to approve the Roadway Agreement with Flint Hills Resources and authorize the Mayor to enter into the Agreement. ISSUE Yocum Oil has operated a portion of the former Centennial Nitrogen to distribute diesel and biodiesel through their company Rosemount Distribution, LLC (also known as Rosemount Clean Energies). Rosemount Clean Energies had used three of the existing tanks on the site with additional investments in new tuck loading facilities and electrical equipment. To allow Yocum Oil time to plan for an expanded use of the site, the City of Rosemount approved a Roadway Agreement with Rosemount Distribution to allow the paving of the internal roadways to September 1, 2014. Earlier this year, Yocum Oil sold the Rosemount Clean Energies site to Flint Hill Resources (FHR). FHR is proposing to use the site as a terminal for their ammonium thiosulfate (ATS) fertilizer proposal. FHR is currently working with the Minnesota Pollution Control Agency (PCA) to prepare an environmental assessment worksheet (EAW) for the ATS terminal. Following the EAW, FHR will need to receive approval from the City for the ATS facility. To allow time for these approval processes, FHR is requesting that the City replace the Rosemount Distribution Roadway Agreement with a new FHR Roadway Agreement that delays the paving of the facility roadways December 31, 2017. Staff is supportive of this request with the conditions included in the agreement, which has been reviewed by the City Attorney. RECOMMENDATION Staff recommends approval of the Roadway agreement and authorization for the Mayor to sign the agreement. 391942v1 CLL RS215-4 448949v1 MDT RS215-4 1 ROADWAY IMPROVEMENT AGREEMENT THIS AGREEMENT is made between the City of Rosemount (“City”) and Flint Hills Resources Pine Bend, LLC (“FHR”) as of the ____ day of _______________, 2014. RECITALS WHEREAS, FHR owns certain real property in the City of Rosemount legally described on attached Exhibit A (“Property”); and WHEREAS, as part of the purchase of the Property from Rosemount Distribution, LLC (“RD”) on June 16, 2014, RD assigned to FHR that certain Roadway Improvement Agreement dated September 20, 2011 by and between the City and RD (the “2011 Agreement”); and WHEREAS, under the 2011 Agreement, RD previously installed a “Temporary Road” on the Property, as defined and detailed in the 2011 Agreement; and WHEREAS, in the course of developing and implementing its plans for the use of the Property (FHR currently plans to construct an ATS storage facility on the Property; such facility or any alternative facility will be referred to herein as the “Facility”), FHR expects to install a new road on the Property (the “Revised Final Road”) and will (prior to any such installation) apply for any required grading permit and site plan approval (the “Permits”); and WHEREAS, the City and FHR desire to revise certain provisions in the 2011 Agreement, as detailed herein. NOW, THEREFORE, for good and valuable consideration, the adequacy and receipt of which is hereby acknowledged, the parties agree as follows: 1. Under Paragraph 5 of the 2011 Agreement, the deadline for completing the “Final Road” (as defined in the 2011 Agreement), and removing any part of the Temporary Road that was not included in the Final Road, was September 1, 2014. The City and FHR hereby agree and acknowledge that the Final Road will not be constructed. The City and FHR hereby amend Paragraph 5 of the 2011 Agreement to apply to the Revised Final Road, and amend the deadline date in Paragraph 5 of the 2011 Agreement to be a date determined pursuant to Paragraph 4, below. 2. Under the 2011 Agreement RD has provided to the City a cash deposit in the amount of Ninety-Nine Thousand Dollars ($99,000) to secure faithful performance of its obligation under paragraphs 4 and 5 of this Agreement. Such cash deposit is currently being held by the City, without interest, and RD’s rights to such cash deposit have been conveyed to FHR as part of the purchase of the Property by FHR from RD. The deposit will be used for the purpose of satisfying the obligation of RD (as assigned to FHR, and as modified 391942v1 CLL RS215-4 448949v1 MDT RS215-4 2 by this Agreement) under paragraph 5 of the 2011 Agreement and Paragraphs 4 and 5 below, and for no other purpose. Any unused security will be returned by the City to FHR upon completion of the Revised Final Road in accordance with this Agreement. In the event that because of a change in the usage plans for the Property, FHR determines by the date stated in Paragraph 3, below, that the Revised Final Road will not be necessary at the present time, the City will retain the above-noted cash deposit (unless and until the City and FHR mutually agree that the cash deposit will be refunded to FHR, based on then-current plans for the Property), and the parties agree that in that case, the Revised Final Road will not be constructed hereunder or under the 2011 Agreement. 3. By no later than 90 days after the completion of FHR’s “front-end engineering” work for its Facility to be located on the Property (such completion date is currently anticipated to be in the second calendar quarter of 2015), unless FHR makes the determination noted in the last sentence in Paragraph 2, above, FHR shall submit a site plan or concept plan to the City for the Revised Final Road. FHR will keep the City timely informed concerning such completion date, and concerning the date of the start-up of operations noted in Paragraphs 4 and 5, below. 4. Should FHR submit for and receive either site plan or planned unit development (PUD) approval from the City that includes completion of the Revised Final Road, FHR will complete the Revised Final Road (in accordance with the City Code), and remove any part of the Temporary Road that is not included in the Revised Final Road, within 180 days of the start-up of operations of the Facility located on the Property 5. Following approval from the City, FHR agrees to use all commercially reasonable efforts to complete the construction of the Facility, subject to project cancellations or suspensions that FHR elects to make. If the Facility construction project is cancelled or suspended or otherwise delayed such that the start-up will not occur by December 31, 2017, the City and FHR agree that that the parties will discuss an additional amendment to this Agreement that would allow FHR to proceed with plans for a different use of the Property (if at that time FHR has any such plans for a different use) or that would set different dates for performance under this Agreement. If on December 31, 2017, the Property continues to be used in a manner that is substantially similar to how RD had used the facility, then (unless the City and FHR mutually agree on some other road improvement plans) the Property’s roads shall be improved by June 30, 2018 as illustrated on the South Service Road Paving Plan dated June 26, 2013. 6. In the event FHR fails to complete such improvements by the deadline date calculated under Paragraphs 4 and 5 above, but with FHR still intending at that time to complete the construction of the Revised Final Road, the City may draw on and use security provided under paragraph 2 to construct a Revised Final Road meeting the requirements of City Code in the location shown on the approved site plan or concept plan and the City is hereby given license to enter the Property to complete the construction of the Revised Final Road. 391942v1 CLL RS215-4 448949v1 MDT RS215-4 3 IN WITNESS WHEROF, the parties have executed this Agreement as of the day and year first above written. CITY OF ROSEMOUNT FLINT HILLS RESOURCES PINE BEND, LLC By: By: Its: Its: