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DORSEY DORSEY &WHITNEY LLP TO: Michael J. Mornson CC: Jerome P. Gilligan FROM: Audra E. Williams DATE: August 14, 2005 RE: Development Agreement with Amcon St. Anthony, LLC and Request by Amcon St. Anthony, LLC for a Conditional Use Permit Amcon St. Anthony, LLC ("Amcon") has submitted an application to the City of St. Anthony (the "City") for a conditional use permit asking that the City allow Amcon to construct a 4,500 square foot restaurant within 250 feet of residential property. The City of St. Anthony has asked for a memo summarizing the issues this request raises in light of the above -referenced Development Agreement. The Development Agreement mandates that the Restaurant (as defined in the Development Agreement) to be constructed be 6,000 square feet in size. Amcon has proposed constructing a 4,500 square foot restaurant and paying the City a fee of $150,000.00 for this failure to satisfy the terms of the Development Agreement and to compensate the City for the resulting loss of tax revenue. The City has previously granted a conditional use permit to Amcon for construction of a 6,000 square foot restaurant at this location. The site plan has been revised so that the 4,500 square foot building will be moved further to the east than previously contemplated for the larger building, thus requiring another conditional use permit. The City is under no obligation to issue the requisite conditional use permit pursuant to the Development Agreement. In addition to the conditional use permit, Amcon has asked that the City agree to amend Development Agreement, documenting the revised requirements for the Restaurant. In addition to the square footage requirement, the Development Agreement also required that the Restaurant carry a liquor license, provide charitable gambling, and be bound by lease not later than September 1, 2004. Amcon has failed to lease the Restaurant to date, and the City will have an option to purchase the restaurant pad from Amcon for a purchase price of $100, beginning on September 1, 2005 and continuing until a lease is signed. By amending the Development Agreement as Amcon has requested, the City is waiving its option to purchase the Restaurant parcel at a bargain price. It may also be waiving any remedies it might have with respect to specific performance under the existing agreement. 4839-6656-307211 8/14/2005 4:31 PM W DORSEY & WHITNEY LLP