Horizon Development Expenses
CITY OF DUBUQUE, IOWA
MEMORANDUM
February 2, 2000
TO:
The Honorable Mayor and City Council Members
FROM:
Michael C. Van Milligen, City Manager
SUBJECT:
Horizon Development Group Claim--Site Remediation Expenses
Community and Economic Development Director Jim Burke is recommending
settlement of a claim by Horizon Development for additional site development
expenses for the Cartegraph Systems building in the Dubuque Technology Park in
the amount of $20,000.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
/s/ Michael C. Van Milligen
Michael C. Van Milligen
MCVM/dd
Attachment
cc:
Barry Lindahl, Corporation Counsel
Tim Moerman, Assistant City Manager
Jim Burke, Community and Economic Development Director
CITY OF DUBUQUE, IOWA
MEMORANDUM
February 1,2000
TO:
Michael Van Milligen, City Manager
FROM:
James Burke, Community and Economic Development Director
SUBJ:
Horizon Development Group Claim
Site Remediation Expenses
INTRODUCTION
This memorandum recommends City Council approval of a settlement of a claim by Horizon
Development for additional site development expenses for the CarteGraph Systems building in
the Dubuque Technology Park. The City Council is requested to approve a Release Agreement
related to this claim.
DISCUSSION
On April 30, 1999, the City closed the sale ofa lot in Dubuque Technology Park to
Horizon/Ducarte, LLC., the developer for the CarteGraph Systems building. Horizon began
construction of the building immediately after the closing and completed it for tenant occupancy
by January 3.
In the course of construction, Horizon encountered conditions on the site which required
substantially more excavation and removal of poor soil and replacement with rock than they had
planned. The attached letter from Tim Puis of Horizon states that while they would ordinarily
expect to spend $2,000 to $3,000 for this item, they actually expended some $40,753.63.
Mike Felderman from City Engineering and I visited the site in August at Horizon's request to
observe the soil problem. Following this visit, Engineering reviewed the inspection reports for
grading of this area and did some sampling of soil compaction. The results were inconclusive as
to the cause ofthe problem. Poor grading work by Sproule Construction or later traffic through
the site by Portzen Construction are the likely sources.
In December, Rick Dickinson and I met with Tim Puis and John Thode of Horizon. We
discussed the fact that the Development Agreement made no representations about the condition
of the property and that it provided Horizon the opportunity to conduct their own engineering
survey before purchase. They acknowledged this and admitted that they did not do their own soil
testing, but that they were relying on a survey which was done for the City.
During the course of this meeting, we said that the City could not accept complete responsibility
for this problem as normal practice would have been for Horizon to have discovered the problem
before construction and to adjust their plans accordingly. Developers rarely start a building
project without their own soil borings based on a specific plan for construction. We offered that
we would present the proposal of the City paying up to $20,000 in reimbursement for the extra
site work. Following the meeting, Tim Puis called to say that Horizon would accept this.
Corporation Counsel Barry Lindahl prepared the attached Release Agreement to formalize the
proposed settlement.
RECOMMENDATION
I recommend that the City Council approve a settlement of Horizon Development's claim as
described. This is based on the belief that it could be demonstrated that both parties have
responsibility. Horizon should have done their own soil testing. At the same time, the problem
was caused or aggravated by the City's contractor (Sproule) or a contractor the City permitted to
move across the property (Portzen). Horizon has accepted this concept and is prepared to sign
the City's release.
ACTION STEP
The Action Step is for the City Council to approve the attached Release Agreement and to direct
the City Manager to execute it on behalf of the City of Dubuque.
HORIZON
27 September 1999
Mr. Jim Burke
City of Dubuque
City Hall
50 West 13th Street
Dubuque, IA 52001
Re:
CarteGraph Systems, Inc.
Lot 11, Block 2 - Dubuque Technology Park
Site Remediation Expenses
Dear Jim:
Pursuant to your request, please find detailed below the expenses associated with the over-
excavation required to core and fill areas of the CarteGraph Systems development site to permit
installation of the building foundation and parking lot.
Date Tonnage Amount
8/16/99 974.26 $12,178.25
8/17/99 16.19 202.38
8/19/99 29.77 372.13
8/26/99 834.59 10,432.38
8/27/99 1,052.15 13,151.88
8/28/99 251.16 3,139.50
8/30/99 -1Q2J.l 1 277.13
Total 3,260.29 40,753.63
. Supporting load tickets available upon request.
** All tonnage is for coring, crushed rock and fill at a cost of $12.50 per ton.
As you can see, we have cored and replaced 3,260 tons of improperly placed soil at a total
material expense of $40,753.00. In additional to the material costs, engineering and staff
expenses have cost our company an additional $1,500.00.
On a development of this size, we would anticipate core and fill costs between $2,000 and
$3,000 for a virgin site. For an engineered-filled site, we would expect coring and filling to be
minimal and less than a virgin site.
49 Kessel Court. Suite 211 . Madison, WI 53711 . (608) 274-1188 . FAX (608) 274-2363
1660 Embassy West Drive, Suite 250 . Dubuque, lA 52002 . (319) 556-1188 . FAX (319) 556-4890
Page Two
As you are aware from your site visit on 23 August 1999, a large portion of the cored area was
the portion exposed to truck traffic hauling excess material from the Advance Data Comm site to
a stockpile located on the eastern side of this property at your directive. Additionally, it is
apparent that the site fill was not placed in an engineered fashion resulting in soil compaction
below contractual specifications,
I look forward to meeting with you at your earliest possible convenience to discuss resolution of
this issue,
Should you have any questions in the interim, do not hesitate to contact me at 556-1188.
Sincerely,
HORIZON DEVELOPMENT GROUP
/s/ Timothy J. Puls
Vice President of Development
c: Mr. Rick Dickinson, Greater Dubuque Development Corporation
File
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RELEASE AGREEMENT
This Release is made and entered into this 16th day of January, 2000, by and between the CITY OF
DUBUQUE ("City") and HORIZON/DUCARTE, LLC ("Horizon").
WHEREAS, on April 30, 1999, Horizon purchased from Ciry real property legally described as Lot 11, Block 2 in
Dubuque Technology Park (the "Properry") for the purpose of constructing a building thereon;
AND WHEREAS, during construction Horizon encountered unanticipated conditions on the Property which
required additional excavation and removal of soil at Horizon's cost;
AND WHEREAS, Horizon has now made a claim with Ciry for the cost of the additional excavation and soil
removal, which claim Ciry derries;
AND WHEREAS, Ciry and Horizon now desire to settle the claim.
NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS
1. Ciry agrees to reimburse Horizon for part of the cost of the additional excavation and soil removal in the amount
of $20,000.00, receipt of which is hereby acknowledged by Horizon.
2. Horizon hereby releases Ciry of and from any and all claims of any kind arising out of the condition, known or
unknown, of soil upon the Property; provided, however, that said release shall not include or extend to any liability of the Ciry
for any environmental contamination of the Property which predates the conveyance of title thereto from the Ciry to Horizon.
For purposes of this Agreement "environmental contamination" shall mean and include the presence, use, storage, deposit,
spill, release, discharge, seepage or migration of any substance or material which requires clean-up, removal or some other form
of remedial action under any federal, state or local laws, ordinances, codes, rules or regulations.
3. This is a settlement of a disputed claim and the parties agree that it shall not constitute an admission of any kind
of either parry as to the cause of the condition of the Property nor either parry's liability or responsibility therefor.
4.
This Release Agreement shall be binding on Horizon, its successors and assigns.
ORIGINAL
CITY OF DUBUQUE
By: Michael C. Van Milligen, City Manager
HORIZON/DUCARTE, LLC
By: Charles V. Heath, Authorized Member