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MINUTES <br />CITY COUNCIL <br />MAY 27, 1998 <br />The City Administrator suggested that discussions commence at this point <br />with Ramsey County on the redevelopment of Little Canada Road. <br />Pederseu asl<ed at what point the site is protected from another theater <br />loclTing in Yhe im~nediate area. <br />Wise repoited that finalizing the lease will result in Cinemark's drafting <br />the developme~~t plans for the theater and applying for the building permit. <br />Once the building permit is issued, Cinemark will announce the theater, <br />and the potentia] of another theater locatin~ in the area diminishes. <br />However, there a~~e no absolute ~uarantees at any point in the process that <br />another theater would not come into the area. <br />Pedersen as!<ed how large the zone is for theaters. Wise replied that the <br />zone is Yypically four to five miles wide. <br />Wise indicaYed that he will get the lelse agreement to the City within 10 <br />days, and asked that the City get the development agreement to Cinemark <br />witl~in that same time period. Wise felt that work on these agreements <br />should move as fast as possible so the agreements can get signed and the <br />theaCer ani~ounced. <br />Morelan asl<ed if the lease agreement will outiine Cinemark's <br />responsibility for the lease over the life of the bonds, and asked how the <br />City wouid be protected if Cinemarlc defauhed on the lease. <br />Fifield indicated tllat the lease would be a contractual agreement. The <br />City is dealing with a major coiporate entity in Cinemark, and the lease <br />will be binding. If Cii~emark defaults, the City would have legal recourse. <br />Fifield stated tl~at tl~e City would have more comfort with the lon~-term <br />viability of Cinemark than another development entity. <br />Pedersen asked what would happen if Cinemark were bankrupt within five <br />years. Fifield replied thaY that is a risk, and the City must consider what <br />tllis would inean if it happeus. Fifield indicaCed that the project is not <br />without risl<, and indicaYed that the City will l~ave to think the financial <br />aspectsYhrough. <br />Wise reported that Cinemark h1s corporate credit and is a company that <br />does rated offerinbs. 'I'he City will ~et a lot of information on the <br />financial stability of Cinemark, and can analyze the quality of the credit. <br />Cinemark has approximltely 200 theater locations. Wise indicaYed that as <br />an investment rislc he would rather deal with a rated company. Fifield <br />concuired. Fifield reported that there is still ~t lot of information to collect, <br />but indicated that if the information ~ulls together, Yhere is greater comfort <br />that the project will cash flow. <br />7 <br />