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Aldermen approve Reed Place MOU, Brickfire contract

December 9, 2011


The Starkville Board of Aldermen voted to allow for an atypical building method for the Reed Place subdivision and for renewal of a contract with the Mississippi Department of Human Services for the Brickfire Project contingent on resolution of legal issues.
With Ward 6 Alderman Roy A. Perkins and Ward 7 Alderman Henry N. Vaughn as the only opposition, the board approved a memorandum of understanding allowing Reed Place, LP and Reed Place II, LP to complete substantial construction of houses in each phase before building the roads and other infrastructure. By the same 5-2 margin, the board approved a second MOU establishing a tri-party agreement between Regions Bank, Reed Place and the city to keep funding for the subdivision secure.
Starkville Mayor Parker Wiseman said most subdivision developers install infrastructure first and then build homes, but all of the houses in each of Reed Place’s phases will be built at the same time.
“That being the case, the developer has asked the city (if it is) possible, rather than going through the traditional process of doing infrastructure build-out (and) getting infrastructure certification from the engineer and then being able to pull building permits for the houses on the lots, if he’s able to build the lots and the infrastructure simultaneously,” he said. “That sent our staff to the drawing board quite a bit.”
City Engineer Edward Kemp explained the benefits of the program. He said Reed Place will install a stone base roadway to give construction vehicles access to the site, then install utilities, pour slabs, frame all the houses and, finally, install the road infrastructure.
“The reason why they’re wanting to do this is, essentially, the finished product,” Kemp said. “As we’ve discussed ... when you install your roadway, curb and gutter at the very beginning, that roadway, curb and gutter is going to experience a lot of heavy duty construction traffic. What this developer is offering to do is wait until all of that heavy duty construction has occurred and then come in and build the roadway infrastructure.”
City Attorney Chris Latimer said city code allows for this construction method so long as the developer signs a contract with the city, shows the city its plans and demonstrates its financial ability to complete the project. For that reason, Wiseman said, the city, Regions and Reed Place will keep 150 percent of the project cost in a secure bank account.
Perkins said the city needed to adhere to ordinances as they stand instead of making exceptions for developers.
“When you go through the traditional way of doing business,” Perkins said, “then it has the tendency to treat those people that are similarly situated similarly.”
Earlier in the meeting, Latimer explained a series of legal issues with contract renewal for the Brickfire Project. There were actually two contracts to approve: a contract between the city and MDHS and a contract between the city and the Brickfire Project. Latimer said the issues arose in the former.
“... The threshold issue is it makes Starkville clearly liable for anything Brickfire does in error or any wrongs that might occur with the grant funding,” Latimer said. “Certainly, that makes me uncomfortable to have Starkville be liable when we don’t control the actions of Brickfire in administering its funds.”
Second, Latimer said, MDHS put a provision in the contract to attempt to reduce liability which falls afoul of the attorney general’s opinions on the issue. Third, he said, one item in the contract requires Starkville to provide proof of workers’ compensation insurance.
“That troubles me in that the people for Brickfire are not employees of the city of Starkville, so to me that confuses the issue as to why the city has to provide worker’s comp insurance,” Latimer said. “Lastly, there’s a paragraph that concerns disputes and how disputes are governed. That paragraph has typographical errors that are so extreme that you can’t tell what that paragraph is saying.”
Latimer said the city had two options. First, it could choose not to act on the contract; second, aldermen could approve it conditionally, allowing its passage to depend on either Latimer negotiating the contract terms with MDHS or Wiseman executing the contract with informed consent of Latimer’s legal concerns.
The board chose the second option, approving both contracts unanimously. Wiseman expressed support for this option.
“I am comfortable having the ball placed in my court, giving the city attorney some additional time to see if he can negotiate with DHS on the terms of the contract,” Wiseman said. “The reason I’m comfortable and I prefer that method to no action at all tonight is since this contract has to be approved by Dec. 15, it would necessitate a special called meeting.”

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