2007-5-8 Prairie Run- Letters of Credit; Johnson, Larson, Peterson & Matt � • .
JOHNSON, LARSON, PETERSON & MATT, P.A.
ATT'ORiVEYS AT LA\V
908 COMMERCIAL DRtVE
BUFFALO,MI?VNESOTA SS313
re�,eriio.�e: (7G3)G82-JSiO�—F,��; (7G3)6824465--ro�L Faee:(8GG)G82--i5S0 I
�VF,I3: www.jlnmlAw com '
Jarr c. LaasoNt
JOHN T. PETERSONt or couvsEt,
CI�DI S. MATT* THOMAS W. RICHARDS*
MICNAEL G. HAL�'ORSON THOMAS W. SPENCE
�'AVERLY OFFIC'F.
�'Renl Prope�rp Lmv Specialist QY�ppointment Only
Cer�ifiedb�•Nlin�resotaStrrre BarA.rsocrrrtian �VALTER S.JOHI`'SON
"Qualifrcd Ner�t�a!
1911-2001
May 8, 2007
Tina L. Lannes
Albertville City Clerk
597� Main Avenue i�'.E.
I'.0. Box 9
Albei'tville, MN 55301
vIA FACSIMILE AND U.S. ,LIAIL
763-497-3210
I
Re: Prairie Run—Letters of Credit
Dear 1�Is. Lannes:
As you are aware, I represent Gold Key Development, Inc. I am writin this letter in
g
res ons � .
e to �our Ma
P y y 3, �007 letters to Dane Swenson at Alpine Capital, regardin� extension of
Letters of Credit No 2601-002 and 2601-QO1.
I am copying Attorney Jason Kuboushek on this letter because of my ethical obligation
re�ardin� communication with parties that are represented by counsel. Based upon the fact tflat
yo�l copied me and Gold Kcy on the lettei• {though Gold Key has not received it), it appears that
tl�e City is not represented by counsel as to tl�is issue. If yoii are represented by counsel as to this
issi�e, please have your attorney contact me regarding thc same. Otherwise, I trust that the City
�vill handle this issue itself in an expedient manner.
The purpose of this lettei- is to renew Gold Key's request, set foi-th in my Febi-uar�� 20,
2007 letter, to reduce the Letters of Credit. For yotir convenience, I am attaching a copy of n�y
February 20, 2007 letter, and attachments, hereto. I understand the City's position to be that it
�vitl not reduce the Letters of Credit because of the pendin� Iitigation and the alleged current
defaults of Gold Key. For the reasons set forth in detail in my February 20, 2007 letter, I
respectfiilly disagree witli the City's position that the letters of credit nat be reduced based the
defaults alleged in the cur-rent litigation. The Development Agreement and the Letters of Credit
pi�ovide for a mechanism foi• reduction based upon completion of the site improvements, the
municipal iinpi�ovements and the landscapin� plan. The municipal improvements and site
improvements are completed and the letter of credit should be rediiced based upon the lots sold
and the improvecnents made.
May 8, 2007
Pagc 2
Please be advised that the City's refusal to reduce the Letters of Credit, and now the City
requiring an extension of the Letters of Credit in the original amount, based upon pending �
litigation and the alleged current defaults of the Developer, is without legal justification and
clearly violates the terms of the three Letters of Credit and the Development Agreement. The '
City's refusal to reduce the Letters of Credit are causing damages to Gold Key Development,
Inc. in the form of additional fees on the Letters of Credit and attorneys fees and expenses I'
associated wit1� cleac�ing up this issue, as well as negatively impacting Gold Key's ability to
obtain financing for other projects and expenses. Be advised that Gold Key does intend to seek
these a�nounts as additional damages in the Prairie Run litigation. I think it makes sense for the
City to mitigate its damages by reducing the letters of credit, as contemplated by the agreement
bet«�een the parties. Please let me know if the City is willing to do so, no later than May 15,
2007, in ligtit of the May 17, 2007 deadIinc imposed by you in your lettei•.
Please let me know if you have questions or c�ncerns. Tl�ank you.
Sincerely,
C`/%�%(.til� ,�- 1 � 1 t�wl l
Cindi S. Matt
CSM/hs
enclosures
cc: Dean Johnson (�v,'enclosure,$)
Jason Kuboushek, Esq. (tiv/efzclos•t�res)
Dane Swanson, Alpine Capital