08-22-2007 Council Agenda - Laserfiche WebLink

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e 515 Little Canada Road. Little Canada. MN 55117-1600 (651) 766 -4029 / FAX: (651) 766 -4043 www. ci.little- Canada. mn. us MEMORANDUM TO: Mayor Blesener, Members of the City Council FROM: Joel R. Hanson, City Administrator DATE: August 17, 2007 RE: Settlement Agreement for The Preserve Development Costs MAYOR Lill Mesener COUNCIL Rick Montour Barbara Allan John Keis Michael McGraw ADNIINISTRATOR Joel R. Hanson As part of our development process, we require developers /landowners to execute a Cost Agreement to ensure the City is reimbursed for all costs associated with processing a land use application. In the case of The Preserve, these costs grew very large due to the re- processing and reviewing of the multitude of proposals. While the Developer reimbursed some of the costs, a large unpaid balance developed. As of the last invoice we sent the Developer, the outstanding charges totaled $84,597.42. The Developer has been contesting these charges for the last few years, largely due to our inclusion of City Attorney costs associated with monitoring the lawsuit. While the Cost Agreement includes "legal costs" in its scope, there was some question as to the appropriateness of these charges given the Developer's suit against us. (The costs associated with the lawsuit versus development approval totaled $15,602.34. These are Sweeney, Borer, and Sweeney costs and do not include the costs of defense and our deductible from the League of Minnesota Cities Insurance Trust.) In discussing this with Pete Regnier, our legal counsel defending us in The Preserve suit, and the City Attorney, we concluded it would be better to eliminate the City Attorney fees given their relationship to the application/approval process. (We are still collecting over $23,000 in City Administration fees that helps offset these costs.) Settlement discussions were conducted with Kevin VonRiedel. He agreed with my proposal to eliminate the City's legal fees. The revised total due would be $68,995.08. He proposed paying $40,000 in cash when we authorize a letter of credit reduction (balance of LOC remaining is $133,214) and the balance ($29,000) will be certified against the unsold lots in The Preserve and accrue interest at 6 %. Also, any remaining costs incurred, but not yet billed, will be reimbursed by the Developer and are eligible for certification if timely reimbursement does not occur. Finally, Dayspring is releasing these charges from its claim for damages against the City. Attached is a settlement agreement detailing the arrangement. Pete Regnier was involved in the drafting of this agreement and recommends approval as do I. -1-