[Massplanners] Construction Completion Bonding

[Wayne Feiden]

We (Northampton) has used financial performance guarantees to ensure the completion of a project beyond infrastructure, but almost always using a letter of credit instead of a bond.

Two examples:
1. Currently the City holds a letter of credit to guarantee performance for the ValleyBike regional bike share.  If our vendor fails to perform we can cash the LC, and otherwise it expires at the end of its term.
2. Many years ago we agreed to purchase a parcel of land and had to commit the funds to purchase before we had grants and funding so a generous donor supplied a letter of credit that we would have cashed only if we had to spend our funds on the land and no grants came through. 

Wayne Feiden

Forgive typos.  This from my small phone.

On Jun 28, 2022, at 6:26 PM, THOMAS FUDALA via MassPlanners <massplanners at masscptc.org> wrote:


Only 1 specific experience, but have you considered using developer providing stock held under an escrow agreement by a trusted attorney? Theoretically doesn't cost the developer anything (they actually benefit from any dividends or stock price growth) but provides security to Town if properly drawn up. 

Tom Fudala
> On 06/28/2022 6:00 PM Bill Nemser via MassPlanners <massplanners at masscptc.org> wrote:
> 
> 
> Hello planners,
> 
>  
> 
> I'm wondering if any of you have worked on a project where you required a construction bond where the bond was tied to the completion of the actual project.  Typically, when I have required bonding for project,  it's for infrastructure improvements etc.   In this case, local leadership is concerned by concessions requested of the town by the developer and wants to ensure the project is constructed as presented.
> 
>  
> 
> If you've utilized something like this could you please let me know some of the details? Off hand I would be interested in
> 
>  
> 
> What is a general description of the project?
> What was the bond amount?
> What was the factor that made you request a construction completion bond?
>  
> 
> Any other info would be welcome.
> 
>  
> 
> Thank you!
> 
>  
> 
> Bill
> 
> 
> 
> 
> 
> Bill Nemser, AICP, LEED AP
> 
> Planning Director
> 
> Office of Municipal Services
> 
> Town of Maynard
> 
> 195 Main Street
> 
> Maynard, Ma. 01754
> 
> (978) 897-1302
> 
> 
> 
> 
> 
> 
> 
> -- 
> MassPlanners mailing list 
> MassPlanners at masscptc.org 
> http://masscptc.org/mailman/listinfo/massplanners_masscptc.org 
-- 
MassPlanners mailing list
MassPlanners at masscptc.org
http://masscptc.org/mailman/listinfo/massplanners_masscptc.org
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://masscptc.org/pipermail/massplanners_masscptc.org/attachments/20220628/2466e7cd/attachment.htm>