06-23-2004 Council Agenda - Laserfiche WebLink

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1)0W\It -M Development & Acquisition, LLC January 6, 2003 Mr. Joel R. Hanson Administrator City of Little Canada 515 Little Canada Road Little Canada, MN 55117 -1600 Re: Provinces Apartments Little Canada, MN Dear Mr. Hanson: Little Canada Leased Housing Associates, L.L.P. purchased The Provinces, a 118 -unit apartment project, in 1996. Tax- exempt bonds were issued by the City in the amount of 53,885,000. In September of 1998, the City and the Partnership entered into an agreement to create an escrow to potentially fund installation of a sprinkler system at The Provinces. The City made an initial one -time deposit of $38,850. Deposits made by the owner were to continue until such time as the Escrow holds sufficient funds to provide for the installation of a sprinkler system that sprinkles the common areas and provides two sprinkler heads in each living unit. The Escrow agreement states that, "if the 4(d) class rate or other such similar rate is eliminated and funds in the Escrow are insufficient to pay for the installation of the sprinkler system in the buildings, the Escrow shall be terminated and the City Deposit plus accrued interest shall be returned to the City. Remaining funds in the Escrow shall be returned to the Partnership...The Partnership's obligation to make such payment shall cease if the 4(d) class rate or other such similar rate is eliminated." As you know , the 4(d) class rate is scheduled to be terminated as of December 31, 2003. The current Escrow balance is approximately 5132,190, and based on the 2002 deposit is pr5jected to be about 3150,000 as of December 31, 2003. I have enclosed a recent bid to sprinkle the buildings totaling 3258,000. As of the termination of the 4(d) class rate, the Escrow is anticipated to be insufficiently funded in the amount of 3108,000. - 3 - 2355 Polaris Lane North Suite 100 :Minneapolis, MN 55447 Phone 763/354 -5500 Fax 763/354 -5650