Public Hearing on Annexation Agreement Amendment April 20

The Cape Charles Town Council will hold a public hearing on Thursday, April 20, 2023, at 6:30 pm in the Cape Charles Civic Center, 500 Tazewell Avenue to receive comment on the proposed amendment to the 1990 Annexation Agreement related to developer liability for future expansion of the water and wastewater infrastructure.

The proposed agreement will is available for public review on our website at www.capecharles.org, under Agendas & Minutes / Town Council by Thursday, April 13, 2023.  Written comments may also be submitted to clerk@capecharles.org by 4:00 p.m. on April 20^th and will be read into the record.

This Agreement was previously amended twice.  The Second Amendment of July 14, 1992, has never been publicly displayed.  It has never been on the Town’s website, and so far as we have found, not in the Land Records (as required by the Annexation Orders to be filed).  

Below is the proposed amendment:

THIRD AMENDMENT TO AGREEMENT OF MARCH 13, 1990

THIS THIRD AMENDMENT TO AGREEMENT is made this ___ day of April 2023, by and between Bay Creek South, LLC, Bay Creek Development, LLC and Bay Creek Resort, LLC (collecvely the “Developer”), and the Town of Cape Charles (the “Town”) (jointly the “Pares”). 

WHEREAS, Brown & Root I, Inc. (“Brown and Root”), entered into an Agreement dated March

13, 1990, in contemplaon of the annexaon of certain property owned by Brown & Root (the “Agreement”); 

WHEREAS, Brown & Root and the Town agreed on a first amendment of the Agreement on

November 25, 1991 (the “First Amendment to Agreement”);

WHEREAS, the property was annexed by the Town; 

WHEREAS, Brown & Root and the Town agreed on a second amendment of the Agreement on

July 14, 1992 (the “Second Amendment to Agreement”);

WHEREAS, Bay Creek South, LLC, Bay Creek Development, LLC and Bay Creek Resort, LLC are successors in interest to Baycreek LLC which was a successor in interest to Brown & Root;

WHEREAS, the Town has previously expended funds to upgrade its water and wastewater facilies, including the water and wastewater plants (the “Facilies”), and further upgrades to increase capacity and comply with laws and regulaons will be required; 

WHEREAS, the Town is in the process of entering into a franchise with the Virginia-American

Water Company to operate the Town’s water and wastewater Facilies (the “Franchise Agreement”); 

WHEREAS, the Pares have been working cooperavely to comply with the Agreement, as amended; 

WHEREAS, the Pares desire to further amend the Agreement to account for changed circumstances; 

WHEREAS, the Town finds that it is in the public interest to enter this Third Amendment to

Agreement; 

WHEREAS, the Town Council approved this Third Amendment to Agreement by Resoluon dated

April ___, 2023; 

WHEREAS, the Town Council authorized the Town Manager to enter into this Third Amendment to Agreement, and to adopt and instute procedures as necessary to implement the terms of the Third

Amendment to Agreement; 

THEREFORE, for good and valuable consideraon, the receipt of which is hereby acknowledged, and in consideraon of the mutual promises and recitals contained herein which form a part hereof, the Pares agree to amend and modify the provisions of the Agreement and First Amendment to Agreement as follows: 

1. Paragraph 10 of the Agreement is further amended by adding paragraph 10 (e):

e. In sasfacon of its obligaons under paragraph 10 related to expansions and improvements to the Town’s Facilies, when the Franchise Agreement goes into effect and ulies are charged at standard tariff rates approved by the Virginia State Corporaon Commission (the “Tariff”), the Developer shall also pay a municipal impact fee to the Town as each lot owned by the Developer is conveyed to a third party.  The impact fee shall be $3000 per lot.  The fee will be disbursed to the Town at the conveyance of each lot to a third-party, and payment of the fee will be a condion precedent to granng a building permit for the lot.  

• So long as the Tariff is in effect, compliance with the Tariff and the payment of the impact fees will sasfy the remaining obligaons of the Developer to the Town for expansions and improvements to the Town’s Facilies under paragraph 10 of the Agreement as previously and herein amended. Notwithstanding the forgoing, Developer will connue to be responsible to construct the necessary physical improvements within its property to accommodate the water and sewer services and to dedicate such improvements to the Town or its successors. 
• The Pares further agree that the provision of water and wastewater services through the Franchise Agreement fulfills the Town’s obligaons under paragraph 10 of the Agreement, as previously and herein amended. 
• Except as modified herein all the other terms and condions of the Agreement, First Amendment of Agreement, and Second Amendment of Agreement, are rafied, and incorporated herein by reference. 
• This amendment becomes effecve when the Franchise Agreement goes into effect.

IN WITNESS HEREOF, and intending to be legal bound hereby, the Pares have signed this Third Amendment to Agreement under seal effecve the day and year first above writen, and that it may be executed in one or more counterparts, each of which shall be deemed to be an original.