2007-2-20 Facsimile Message Prairie Run- Letters of Credit; Johnson, Larson, Peterson & Matt JOHNSON, LARSON, PETERSON & MAT?', P.A.
A'1TORNF,Y'S AT LAW
9U8 COMI►�RCIAL DRiVE
BLTF'FALO,MINN�SOTA 55313
re�LraoNe: (�63)6R2.a550---rnx: (�C.3)682-4465��ro�,�,pREE:(SGG)(�lf2•d$$Q
�12$: H'w�v-1�Dml9w.cnm
JAN C. LARSON•�� or cocrNsEL
JONN T.pEI'ERSONt THOMAS W.RTCHARUS'�
CIND! S. MA,T'f* THOMAS W. SPENCE
M�CHACL G.HALVORSON
�AVLRLY OFFiCF
t R�ul Pruperry�Gaw SpeclalLsl IIy Appoincmcnt O�ly
Ce►��d byMirure�utaS/ateBaii]s.rociRtiaa WALTER S.JO�INSON
•Qunllfic�f Ne��vul �9I2-2001
FACSIM.YLE MESSAGE
llATE: 2/20/07
THIS MESSAGE IS POR II-�ATTENTION OF: B�;d et Miller/Ci Clerlc
�AX NUMBER OF RECIPI�NT: 763-�197-3210
THIS MESSAGE IS FROM: Cindi S. Matt. Es4.
�.
THIS NLESS�GE INCLUDE5 '1'HTS COVER STIEET AND_ .,.ADDTTIONAL PA,GES.
IF YOU RLCEIVE LESS THAN TFIIS,PLE�SE CONTACT US AT: (763) 682-4550
1V�ESSACE:
RE_ Prairie Run—Letters o�Czedit
CONFIDEN71ALiTY NOTICE: '�he doeument(s) accorapaliyiug this fax coiitain eonfidential
informatioa which is legally privileged. Tbe information is intended only for the use of the iu[cnded
recipient namcd Abovc, lf you a�e not the intCncied recipient, you are hereby notif►cd that any
disclosure,eopyipg,distribution,v�the taking of�ny action in telianee on the contents of thi.�telecopied
information except it� direct delivery to the intendcci recipient named above is st��ctly prohibited. Tf
you havc received rhis fax in error, please notify us immcdiAtely by telephonc to an-an�e for thc return
of the origi��l documcpts to u�.
616-� l00 d 119-1 59qbZ89E91+ bd 11VY1 � NOSa313d NOSaVI NOSNHOf-YVOaj lq�9l 100Z-Od-93�
JOI�NSON, LARSON, PETERSON & MArT, P.A.
A'1"TOR1vEY5 AT LAw
908 CAMMERCIAL llli�vE
BUFFAI,O,hIINNESO7A 55313
•r���vNONr,: (763)682�550-�--vAx: (�63)682-44G5--�TpI,L FREE:(SGG)GH2•4$$Q
�'�'EB: wwW.ilartilaw.cnm
JAN C. LARSONfi OFCOuNSG[,
.TOHN T.PETERSONt THOMAS W.RTCHA.RI)S''
CINDI 5. MAT1"* TT�OMAS W.SPENCE
M�CHAEL G.HALVORSON
WAVERT.V OLTiCL
T Ren1 Prope�IV Law Spetlalisf �Y�ppolntrocnt Ooly
Crrlified hy Minnesolp Slaw&�rAs,euciutiu» WALTER 5�.TOHNSON
M Quaujeee Newra! I912-2002
Februazy 20, 2007
8ridget Miller
Albe�-tville City Clerk
5975 Main Avenue N.�_
P.O. Box 9
Albertville, MN 55301
VI,4 FACS.�MILE AND U.S. MAIL
763-497-3210
Re: Prairie RLu-►—Letters of Credit
T�ear Ms. Millcr:
1 rcpresent Gold Key Developmcnt, Inc. I am writing this letter in respouse to your
February ]6, 2007 letter to Ms. Julie Revak, regarding the City's deival of Gold Key
Development, Inc.'s request for a zeduction in the Letters of Credit on the !'rairie Ruu projcct. I
am copying Attorney Jason Kuboushek on thas lettcr because of my etlucal obligation regarding
comn�w�icarion with parties that are representcd by counsel. Based upon the fact that you sent a
t old
)etter directly o G Ke , it a cazs the Ci is not re resented b counsel as to this issue. If
Y. P P t Y P Y
you aze represented by counsel as to tl�is issuc, please have your at�ome contact me re ardin
Y 8 �
the samc. Otherwise, I trust that the City will haudle this issue itself in an expedient man.ner_
As you are awa�-e, by letter dated January 19, 2007, Julie Reva]c requestcd that tl�e City
reduce certain Letters of Credit of Gold Key Development, Inc.'s relating to Prairie Run, o�a the
basis that the projects were 90% complete, and the tenns of the various Letters of Credit have
bcen fiilfilled. Yt is my unde�standin� that City Attorney Michael Co�u-i recommended that thc
City Council reduce the Letters of Credit for Prairie Ru�� Addition at the Fcbruazy 5, 2007 Cicy
Council meeti��g. However, at the rebruary 5, 2007 meeting, the City Council apparently
unanimously dcnied the City Attorney's recommenda�ion to reduce the Letters of Credit of
Prairie Run, apparently because of the cuncnt lit�gation involving thc City a�ld Gold Key
Develop��,ent, Tnc.
818-� ZOO d ZZ9-1 59Dq189E91+ Vd 11bYi ? NOSa313d NOSadI NOSNHOf-�IOb� lq�9l 100Z-01-93�
February 20, 2007
Page 2
For your convenience I am attaching hereto a copy of the following docw�ents:
1. Julie Revak's January 19, 2007 rcquest that thc Lette�•s of Credit be rcduced;
2. Irrevocable Letter of Credit 2601 001 dated Au�ust G, 2004;
3_ Irrevocable Letter of Credit No. 2601 002 dated August 6, 2004;
�. Irrevocable Letter of Credit No. 2061 003 dated August 6, 2004;
5. Pertinent�ortions of the Development Agrccment regazding rl�e Letters of Credit;
6. Portion of the February 5, 2007 City Council Minutes indicati�,g City Aitorney
Couri's recommcndarion to reduce the Letter of Credit and the City'S denial of the
City Attomey's zecom.mendation; a�1d
7. The February 16, 2007 letcer from the City of Albertville denying the request to
reducc Lctters of Credit b�.sed on the "cun-ent defaults of tl,e Developer as bave bccn
communicated to the Developer in a previous Notice of Default."
The Ciry's refusal to rcduce the Letters of Crcdit, based upon the "cunrent defal�lt of the
Developer, as have been communicated to the Deve�oper in a previous Notice of Default." is
without legal juslification and cicarly violates the tcrms of the threc Letters of Crcdit and the
Development Agrecment. The City's refusal to reduce the Letters of Czedit are caL�sixig damages
to Gold Key Developinent, lnc. in the fonn o� additional fees on the Lette�•s of Credit and
attomeys fees and cxpenses associated with cleazing up this issue, as well as negatively
unpacting Gold Key's ability to obtain fmancing for other p%jects and expenses_
Each Letter of Credit provides for a m,echanism for a reduction, based upon the ternis of
the Development A�rccment and the level of completion of the project. Gold Key has complied
with the terms of the Letters and Dcvclopment Agreement as they relatc to the reduction and it is
entitled to an immediate reduction of the sazne, as recommezlded by the Czty's Attomey, Michael
CoLvi.
Letter of Crcdit No. 2601 001, at page 2, provides "This Irrevocable Letter of C�•edit may
be reduccd by 50% of the amount of special assessments paid on any lot in Prairie Run pursuant
to the Surety Release provisions set out in Section 6 of' the City of Alhertvillc Pla�vied Unit
pevelopmenr A�reement Prairie Rwi. The reduction per lot is listed on Fxhibit A. Each
drawing hereunder shall reduce by the amouut of such drawing the amount available under this
Letter of Credit."
Lctter of Credit No. 2601 002 provides "This Irrevocable Lettcr of Credit may be reduccd
by the cost of the on a��d off-site improvements cotnpletcd and paid for by the Developer
pursuant to the Surety Rclease provisions set out in Scction 6 of the City of Albertville Planned
Unit Uevelopment A�eement Prairie Run, Each drawinS herew�der shall reduce by the amount
of such drawing the amount available under ttus Letter o�Credit."
816-� EOO d ZZ9-1 99qDdA9E91+ Vd lld�l '8 NOSa313d NOSbVI NOSNHOf-YVOa� 1v�91 100Z-01-93�
February 20, 2007
Page 3
Letter of Credit No. 2601 003 provides "Thas lrrevocable Lctter of Credit may be reduced
by 150% of the cost of corrzpleted landscapi���/screening rx�aterials pursuant to the Surety Release
rov�sxons set out �n Section 6 of the Ci of�1l.bertville Planned
�' tY Uiut Develo ment A
p greement
Praine Ruu exce t that in n v o
, p o e en sha11 the letter of credit be reduced below $9,700_00 25/o of
�
the estimated landsca in costs for two ears from the '
p g ) y tunc •f the installat�on of landscap�ng
materials_ Each drawing hereunder shall reduce by the amount of sucl� drawing the amount
available tuider this Letter of Credit."
Thcsc tree items (municipal improveznents, site i�nprovcments auid landscapin� plans)
have bcen 5ubstantially completed and reduction in the Letters of Credit is rc uired_
q Nothing in
the Surety Release provisions of the Deve)opment Agree�nent, or the i,etters of Credit
I tl�emselves, allow the City to rcfuse to reduce thc Letter of Credit based upon the other defaults
� . .
alleged by the City m the cLu-rent liti�ation. The City s refusal to reduce�l�e Letters of Credrt is a
breach of contract and is, in my opi�uon, done in bad �aith beeause Gold Key Development, Inc.
has initiated legal action against the City. To tbe extent the Gold Key Development, Inc. suffers
da�nages, both out of pocket auid consequen�ial, as a result of the City's inappzopriate re�fitsal to
reducc the Letters of Credit, Gold Key does intend to seek reimbursement of thc same (including
attorneys fees and costs), eitl�ez� in the present litigation (by way of an �lmended Conlplaint), or
in a sepazate lawsuit.
1 respcctfully rec�uest that the City reconsider its refusal to ceduce the Letter of Credit at
the ncxt City Couilcil meeting. In the event the City refuses to rcduce tl�e Lettcr oi'Credit, Gold
Key Development, Inc. will start appropriate legal action to get the Tedttction that Gold Key is
cntitled to in these Lettcrs of Credit, a��d for its damages based upon the City's actions.
Please let xne know if you have questions or concezns. I'hank you.
Sincerely,
. / ��� ~
����
�
Cindi S. Matt
CSM/j al
cnclosLves
cc: Dean Johnson (w/enclos•ure�)
Jason Kuboushek, Esq. (w/enclosure.$)
918-� 8l0/q00 d ZZ9-1 99qqZ89E91+ Vd 11VY1 � NOSa313d NOSaVI NOSNHOf-�IOb� lY�SI 100Z-01-93�
FEB-13-2007 TUE 1� �44 AM DEAN JOHNSON HOMES FAX N0. 7634794821 P. 10
.1anu�ry �9,2007
City of Alhertville
5875 Ma�n Ava
AlberNiqe, MN 55301 .
Re:Lottmr of Crcdlt
Prairi�Run,Gold Key
Development, Inc.
To Whom It May Concem:
I am writing to request a reductbn�n our letter of Credit�t Pralrie Run, Gold Key Developmeri. Inc_
Letter cf crEdit#2801-D01 Amount$680,337_00-Muniapal Improvements
LOC#2601-002 Amount$53,OOfl.00 -Site Improvemenfs
LOC#2601-003 Amount$59,200.00-Landscaping Plan
Our records ind�cate these projects at 909�o complete.
Slncerery,
Julie Revak .
Dean R, Johnson Homes
918-� 8l0/900 d 119-1 59tiq189E91+ Vd 11dY� � NOSa313d NOSadI NOSNHOf-YIOb� 8ti�51 100Z-OZ-83�
FE8-13-�007 TUE 11 :42 AM DERN JOHNSON HOMES FA}� N0. 7634794821 P, 02
- 0�/19/Pp01 �u� 10:9d FA� 8710578 �►++ DfiAN JOSN90N �002/008
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15500 W���Bov�v,u�
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� '� : . n�voCABLE r.�TTPR oF CRP,uYT No.�60�DATED aUGUST 6,2,�1oa.
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I . etracive Enginee�g Teahnicisa
' `City f A1beRvillo
� =5975 Moin Aveaue
- � �P.O.�o�x 9 '
� �lbe�tvill�+.NIN 55301
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��We eby astablish aur Irrevocable Lettea�of Credit,number�cd t�s mdicated above.an�,
�;etYec 've im.atediately, in favor of the City of Albot't�*ille("'Cit�'� at the req�t snd S�r tho
; ;aoc t of Go1d T�ey Daveloprnont,Tno, (tho Develope�)in the aazovnt of aDd twt to�c ceed Six
� � d BightY Thousand Threra Htuulre�d Tbisty Sevca snd 04/100 ($680,337.00).as such
� � : t is deereaeed a�provided below, availablc to you by yoiq sig�t�raR or&afts drawn upon
� �ue'in onnecdon wf�tho Developar's obligati.ons as da�ibed ia the PlaYmed Unit Do�relopment
: ;
. i . CA ' eat for t�o Planacd Unit Dovolapznent to be lmown a�`Z'cairie Rnn". This am��unt
re�r s SO'�o of the estimaGod costs o£the Muaicip�ll'mprove,ments, Thie Irrcvoeab4:Lcttrs
� ;of 't is valid upon rocoatting af the Plat.
.�
�Eac dreft drawa undor thie Lett�of G�odtt mast b�accompanied by:
� � 1. The original of this Let�r of(��odir '
i ; 2. A n4tatizcd statemot�t e�oceeuted b�►the AdminisII�ativo Eagiaeerit�g
�' � � Teohnic'
�an, statin,g that tho Dwcloper�s w dafavlt under tho tca�tts of tho
I ,. I Dvvolope=s A,gr�emont,and that tbo C�ty is aa�itled to draw upo�a tha
� ; , f I,ctt�er of Ctedit. Such st�temwt shall eet farth tbe amonnt requi�cd to
' � cure suoh def�u�t,
' ; � .
Y � �draR drawa uader this Lettei of Crcdit must;
i
I j ; . 1. 8e si�ned ou bevalf of thc City by tha�tive Engiacai»g
Techuiciaa or hislh�desi��o.
2. Bs ia an amowat requireal to cttre the defgult by the Dev0loper,W►hich
: ; � amount shaU aot cxcecd$68Q,337.00. �
� : � 3. Bear oa its�'aoe the clauso, ��DRAWN UNDB�LEITER 4F CAJ�TT
� ' � � , NO.�601 QO1"datcd August 6,ZOOd. • .
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FEB-13-2007 TUE 11 �43 AT1 DEAN JOHNSON HOMES FRK N0, 7634794821 P, 03
0 �13/2QOT 10:�S FA% 9T10S�B �+� DBAN JOSIV90N (�003/006
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� ' ! � ' ; 4. Bo proscnted for payment during regular btuinnss�outs at our i;�Ilsction
' ; 6epartrateat at 901 Twelve Oalt9 Cente�Dri�o, Suito 9�9,Wayxs�ta,MN
; , SS391�no later t�an 2:00 p.a�. on Juno 30,2005.
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�Ibis � � cable Lotter ofCredit nnay be reduccd by 50°�6 of tho emou�t of special asse�ssrnents
apaud n at�y lot iu Prairie R�parauaut to the Surety Relaaso pmvis�ans set out iu Sectiori 6 of
;t��e 'ty of A►lbertville Plannod Uait Dcvolopmont Agr�ement Prairio Rua. Thc reductlon.pa lot
I : :�i8 ' on�tibit A �
. �
� ;�ac,h drawiag hereunder shall reduce by the at�oaat of suoh dtawin�Che amoumt avail:�ble undeir
i tbis of Credit.
,
��Wo Y agree ths!dr�a!!e dt'awn uader�d pre88nted 111 cOrifo�mity with tLe teoms c�;Ethis
'�T.et of C:redit cv�l bc duly hon�orcd upa�pn�catatio�►.
�
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yEx as otbcrwia�cac�press�y�tated�thi�I.ettet of Credit is su'bjoct to the Unifom�Ctu�toms aud
��P ce for poov�mea►tary Credits(lateet Rev.),Iaternasional Chamber of Commace�n�blioations
' � �No. 00(or latast nv.)(tlso Uniform Custom�s). as ra rnattera rwt govm�,ed by the un;lbrm
� ms,•t�s Letter of Credit thall be governed by amd cfln�ued ia accordence with��ae laws of
� ofMianesota, iaeluding the Unif�iotm Cvma►acial Cnde as in effeat iA th�e State��f
� . �
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'This ' ef G�dit is not trans6ecable or as�i�able and is nnt issuai Sor thz ba�o5t�►f aay third
;; clai,a�anc. .
`GPe ell not bc callod upon to tesolvo iS6uo6 of fact or law betweea the Ciity aad the Y�avoloper,
_ er,me cxistaaoe of a dispute as o�issiu9 of law or f�ct b�twesn rlse Ciry aud ihE:
� ;Dev s�sall havo no effect or�the City's ability to draw on this lacvocsblc Lct�cr�o f Crcdit.
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818-j 6t0/l00 d ZZ9-1 99Yb189E91+ Vd 11dYi � NOSb313d NOSbVI NOSNHOf-INOa� 8ti�91 100Z-01-63�
FE8-13-2007 TUE 11�43 AM DEAN JOHNSON HOMES FAX N0. 7634�94821 P� ��
oe�i�izoo� � io:aa FAJL 9?105T6 +i� DEAN JOAN90N �ooaioue
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°� EXHIBIT A
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. ' ' � rI'tic llowin►g�mouats are tk�p�r lat speaisl essessa�eots to be aesesaed in Prairie Rvu ?he
' �`.! . � sttac ed Irl�aevocable Lcttes'o f C r�d it tnay bo reduced as eech lot's aascssmcnts are pai�l,P�'suant
� ., I
� ; i � �, yto� 8t�lC�y R,dea�o provisioas set out in 6ection 6 af the City of Albertrille Pl�ued.Unit
' ��Dov pi�t'Ag�eernait Prairie Run.
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;i ' � Siaglc Family lots $29,400.00 x 50°/a=�14.700
� ; . DvtacDed Towahome lots S?�,350.00 x SO°lo=$11,175
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FEB-13-2007 TUE 11 :G3 AM DEAN JOHNSON HOMES FAX N0. 7634794821 P, 05
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' 0 /1�/2007 10:�5 FAZ 87106T6 �++ DfiAN JOIDV90N �003/009
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, ' � ALPINE CArITAL, LLC
� ' 9l 9'IrovEtvP O�ts Cpt�R
� , ' 15500 Wnrzarw 8ocn.Ev,utp
� � WAYIXCAr 1�11� 55��1 � �
� pKONe: 952-249-9079 � �
. � F�x�95�249-1141
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� : ;� ' ' � ' � IRREVUCABLE LBTTBR OF CRLDTT NO.�DATBD AUOU6T�,:E004.
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' . .�; A� t;ativv Tnginccring TcchniGiaa
' �City f Alba�tville ,
�i597 M�� aAvaiuc
yP.O. o$9 �
- �Alb ' . ,MN 55301 '
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� �DCS=S1T OT�83II:
Ii;Vl�e a�by establish our Irrevocable Lott�r of Credit,numbcred a�indiaatcd above, a��i,
� � 'vc immed8ately,in favoa�of the C'sty of Albertville("Git��, at the tequest aad�7tt the
j acco t ot Gold Koy Dcv�elopmcnt, mc. (tbo Dovolopvr)in tho amount of a�d n,ot tn e�:ceed FiRy
�Tl�re Tfiousand aad 00/100(SS3,400,00),�s sncb amount ia decreased a8 provided b��lcw,
' Jgva� lo to you by yo�a cight draft or drafts d�awn upon us in wnnoc.tii�with thc Dr�cJopa�'s
�ob�li caas celstYng to the oompl�tion of on end off-site improvemants as descn'bed in the
� aP Unit Dev�lopment Ageear��t for thc Pl�ntsed Lhait Dovolopment to be lanown ae
� a 'e Rua". '1`hie Irnovnoablo Lottor of Credit is va]id npon recording of tbc Plat,
, ,
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� ' � dr�R drawn undrr this L.ettor o�'Credit must be accampanicd by:
� ' � • i. Thc of thia l.cttcr of Crodit;
aur�nal
� � . 2. A notari,zed sta�ement exacuted by the Administrative Fa�inse�ing
;� � ' � Tecbn ician, statiag tbat the Devolopa ia ia de�ult under the te,��ae of the
" � � D�vclopers A�tcGmcn2�and thaR the City i�caaticd to draw upa n thc
I , � . Y.etter of C�edi� Such atatem�t sha11 set forth the�ount reqicirod tv
' I : : cnre such default.
� draft,dtavva uader this L,ettar oP Ctedit mus�
� _ us
� � 1. Be sig�ed cn behalf af the Ciry by tho Adminis�tfvo Faiginoariog
! ' � Teclmi,�ian or bis/ber dasignee.
� �
' 2. Be in sa sc�ount requitbd to cure the de�ult by�he Developer. �vhioh
� N � ame�t s�an no�excc�ed�ss,000.00.
I' �: ' 3. Bear on its�ce the c.]$u9e, 'DRAWN UI�IDER LETIBR OF CE�BDIT
� � N0.�641 002"datod Augaet 6, 2004. .
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818-j 8l0/800 d Z19-1 99bq289E91+ dd 11dY1 8 NOSa313d NOSaVI NOSNHOf-�IOa� Bq�9l 100Z-01-93�
FEB-13-Z00� TUE 11 �43 AM DEAN JOHNSON HOME5 FAX N0. 7634794821 P. 06
� 0�/1�/2� 07 �0:95 FA$ 97105'lA r.►r DfiAN JO$NSON �008/008
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' '; ' � u 4. 8e presented for paymeat during regulaz bu,sinas.s bouts at ouz�.ollrction
; � ` ' j � ; ; dtparteaoat at 901 'hvelve Qaka Ceat�erDdvs. Suite 919, Waytc�t�MN
; ' . �: ; 55391,no latcr tha�t 2:00 p.m. on Jutu 30,2005.
� , . � � •
� i � � : Tl�ia ` 'ocable LraoP o1 c�e0it may be reduced by th�e cosc of�e oa aad oYf-eir,o�1a;�mv�aca�e
let+Cd and paid far by tho Dovolopar putsuaat to the Surery Releas�pmvisiona set vut in
P Sa 6;of Wv City of Alborc�ille P1aYroed U�mt Developm,ent Agreoment Ptsirie Rw�.
,, ,
;�B draw�g hereundear ahall�educe by the amoimt a�suah drawing the amo�mt avai�tible undec
�this ite�r af Crer�it.
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I �W c by agrea that drafle drawa undcr end prescntcd i.n oot�tosttiuty witb the t�ms i�f'shi�s
��Lett of Crcdit will bc duly bonorcd upott p�sco�vn,
�,Fxc as othawi�exgressly etate�,tbie L�ter of Gredit is svbjcct to tho Unif�oomo�Customs end
° ce�r powmea�ary C�+edit�(ia�eec Rev.),7t�tematiana]Chambcr of CotaO�ed�ce�aubiicaaons
'N4. (or latesr nn.) (t6e Uai.fbrm Cu.�ot�. Aa to mgttet�nct goveaned by tho UIIifoacm
'Cust e, this Letteor of Credit shall bc�overned by and co�ttued in acoardet►ce with 1hc laws of
�6 of D�9"iaaesota,iaoluding tbe UniSo�►Com�ncroi�l Cade as in affect iu tbe State c�f'
. , ona- .
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,: ' �T�iB tter of Credit is noc traasferable ar ass��sble aad ie�t issned Fvr the bencfit c�f any O�ir6
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�• '7We l not bo called upon to rosolve issues of fact at la,w betw�n tbe City and the]��cvcloper,
ih ; tbe ax�ssem,ce of a diapute as te issuag of 1aa►or fact betweea the City and the
, � oybz shall t�ave ao eff�ect on the City's ability to draw o�tbie Ietevocs�ble Lettet�af C�edik
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816-� 8l0/Ol0 d d19-1 59Y7Z89E91+ tld 11VY1 ? NOSa313d NOSbVI NOSNHOf-YVOa� 09�91 1001-OZ-93j
FEB-13-2007 TUE 11�44 AM DEAN JOHNSON HOMES FAX N0, 7634794821 P, 07
-0�/13/20�7 10:78 FAg 9T10S7B ++� DEAN JOSf190N f�0o7/008
� (� ��
I ' � ALPINE CAPI'TA,L, LLC
I " i � 9t��,�o�s c�rnr�x
, 15500 v��ru�►BovtBvu�a �
� '� _ w�Yr�►r�.MN 55391 ��
, , , � PuoNe: 952-249-9079 ���
�I . � � PN(: 952•249-�141
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. � � � IItREVpC,Agr.E�;TTRR OF CREDIT NO.Z6 DATED AUC�iJST 6, ;�ooa.
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: i, ' �,4' hative E�gincering Tec�nicisn .
+G�ty f�►lbertvillc
'S97 Mqin Avea�ua
�P.O. ox 9
� °A.1 ' MN 55301 _
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. � �Drar 5ir cr Madam:
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' �Wa y sstablieh our Ittevacable Le�tta�of Crod�►t,numberred as indicat�d above,acd�,
I -c 've i�ed�au�ly,in favor,of the Gtity of Albettville("Ciry")� at the request and ii�r the
� iacCo t of Gold Rey AoYelopmen�,Iac• (tb�e Dcvaloga)in tb�o amount af and aot to e«:cead FiRy
� �8igh Thousarld'hvo Huadt�d end 00/100($58,Zd0.00),ae such amount ia doercased as plovided
Nbolo , available t�o you by your sigbt dra#t or draft�drawn up�a us ia oonuectian'witb tbe
. rnev� oper'e abligatione r�lati�ng to cumpletioa eYlaa�cap;nS�scr�nin,g matai.als as cL�scn'bed in
: ':th� aonod Unit Dovolopmeat Agre�aoat for the Plauacd Uait Develapmont to be la�nwn se
'. ,�` � 'o Run". Thi6 amouat represeAts 150°�e ofthe es4matcd oosts of tho lsndscapinF�'sci�caiag
t' vatid n recer �of t�c
, ,. �: �. �ma 'e1s relaced to sa�d Plat. Tlve Lrovooeble I.etta�of Cc�dit �s � ��
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� �Eac drt�ft drawn undet tbis Letcer oPCn.dit musc be aaoompaniod by:
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� ' � 1. The original of this Lvttor of Crodit;
-' . 2, A notazizod 8tatomant exetutad by�he Admit�is�ativ�fim,graeecczg
I ' . ' T�clmician,stat�ing�hst t�a Developes is m default under the te�ins�of the
� .� Dcvelogers Agneen�nt, and tbat thc City is catitled to draw u�aat thc
, ? �' � I.ettec of Credit Such stetcment shall set forth tho amount required to
` � cure auch def8ult
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'E �a13 d1CawA uIIder thi6 Le�er of Credit�DU9L:
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.I 1. $o sigped on�ahalf aftha CitybY tho Ndminis�etivc Enginao�i��g.
� �. � ?ec��aicyas►ac hislhat dosigoee.
� �� ' 2, Bo ja aTi etmvu�t taqu,ired to cmra the defauU by dte Dav�loper,��'hich
' i . amount ehall not exeeed S58�200.00.
. :; ; � 3. Hc�r oa ib face the clause, "T�RAWN iJNDBR LF1'TBR OF A3EDIT
' ' ' N0.�QQ�"dated Auguet 6�2004.
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818-� 8l0/ll0 d Z19-1 59qYZ89E91+ dd 11dIN � NOSa313d NOSbYI NOSNHOf-YVOa� 09�51 100d-01-83�
FEB-13-2007 TUE 11 :44 AM DEAN JOHNSON HOMES FAX N0, 7634794821 P, 08
- . , �,p /19/P'b07 10:38 FA7C 971067B �v DFAN .10�V90N �008/009
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' � � � � 4. Bc prosented fi�r paymwt dnrin,g rcgutaz busiae85 Itoui5 at our��olleot�on
� dep�raneat at 901 TweJve Oaks Ce�Driva, Suite 919�Wcq►z�;�-MN
a � � SS391,tw lator thaa 2:00 p.tn. on Decambes 31.Z006.
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'�rbis �oc�lo L�ofc�aitma.yb�reduced by i5a�6 of�h�ao6c oecampt�ced
' scre�iag matcciale p�svaAt to thc Sunr.ty Xtolease ptevisions�t aut in Sccdon d of
� � �tbp � of AIbe�tv�ille P18nned Unit Devolopmeut Agreauient Prairic Ruo, cxac�pt thai:in no
�:oven sbaU the lctier of crcdit banducal bclow$9,700.00(ZS%of the estimated landsc�ping
� far two yea�s imm the ti�me of tbe installatiaa of dse land
r so�pia8 materials- .
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. ' bersundrr shall rcducc by tbe anwunt of auch drawiag the a�aouoat arrail:►ble undcr
!t°s � af C'�edit.
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� �We �aby agree rbac draf�drawn under and presented i�n co�formiry with the t�cme�rf t�ie
�, . ; � � of Credit will be duly hunured upon preseaiatiot�.
.f. � : A i
' � ' ��Bxc t as utherwise expressly statec�dus LMtm'of Ccedit is 6ubject to the CJnifo�C.1�statns end
. � �
� , '�Pr�e e:E�r pocumeatary G�edits(latest kev,),Intea�ational C�6ataber of Comrncirz��abLicstiotu
: '. �N6. 0'(or latest no,) (tho Uni.f+mn Cuscoaas). A�w mactecs not governed by tbo Uai:�orm
, ,�Cwt ` ,�this T..etie�of GYedit shall be&ovenned by and eonsG�in accerdancc w�th the laws of
�S , of Mianesota,i�+cluding the Uoifown Commm�cial Code as iun e£fect in the Stace��f
y aBofa
� :17ps of Ctedit im not trsasferable or aseiguab]e�d�is not is�ued for the be�e�t��f any Third
; claimaat.
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;Wc stot bc caUul upon to t�r.4olve iasaes of fact ar law 6ctaxti the City and the])zvaloper,
�'ho ,the e�det�,ee of a di9puTs as to issaca of law or fa�t betweem ths G�1y and thu�
�Dtv lopec shall have an et�ect nn the Ciry'9 9blLltr t0�8w On th1,4 ITCOvOCgbis I,etYdt t�f G��edi�.
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818-� 8l0/Zl0 d ZZ9-1 59qVdB9E91+ dd !lt�l � NOSa313d NOSaVI NOSNHOf-INOa� 09�91 lOOZ-OZ-93�
CTTY OF ALBERTVII.LE
PLANNED UNIT DEVELOPMENT AG�tEEMENT
PRAIItIE RUN
THIS AGREEMENT, entered into this I(� day of � � 2004 by and
. between GOLD KEY DEVELOPMENT, INC., a NI'innesota Corpor ' n, refened to herein
as "Developer"; and the CITY OF ALBER��,LE, County of Wrigh� State of Minnesota,
hereinafter refened to as "City";
PVTrNESSETH:
WHEREAS, Developer, Robert C. Heuring and Christine A. Heuring ai-e the fee
owners of the real property described in the attached Exhibit A, which is the real properry is
proposed to be subdivided and platted for development, and which subdivision, which is the
subject of this Agreement, is intended to bear the name "Prairie Rua" and shall hereinafter
be re:ferred to in its entirery as "Said Plat"or"Subject Property"; aad I
WFIEREAS, this Ageement shall apply to the Subject Property which is owned in I�i,
fee by Developer which is legally described as follows (after the filing of the Prairie Run '�
Plat): I�
Lots 1-15, Block 1 I�I
Lots 1-38, Block 2 ',
Outlot A �
' All said properiy in Prairie Run plat, City of Albertville, Coun of Wri II'�
tY ght, Mulnesota.
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such ponds. Said retention ponds aad basins shall be installed prior to the
installation of utilities.
4. Intended Use of Subdivision Lots. The City and Developer agree that the
numbered lots in Said Plat are intended only for single-family residential use in the
number and the configuration as are shown on Said Plat -Developer sha11 construct
only one single family dwelling per numbered lot, wiless Said Property is rezoned by
the City in the futlue into a classification which would allow additional units to be
constructed. "
5. Sureri Reqnirements.
A. The Developer will provide the City with an irrevocable letter of credit (or
other surery as approved by the City Attomey) as security that the obligations
of the Developez under thu contract shall be performed. Said letter of credit
or surety shall be in the amount of$791,537.00 representing the sum of 50%
of the estimated cost of the Municipal Improvements ($680,337.00), 100°/a of
the on and off-site improvements ($53,000.00), and 150% of the estixnated
cost for landscaping/screening materials celated to Said Plat ($58,200.00).
Said letter of credit or surexy must meet the approval of the City attomey as to
form and issuing bank.
B. The City may draw on said letter of credit or surety to complete work not
performed by Developer (including but not limited to on- and off-site
improvements, Municipal Improvements described above, erosion control,
and other such measures),to pay liens on property to be dedicated to the City,
to reunburse itself for costs incurred in the drafting, execution, administration
or enforeement of this Agreement, to repair or eorrect deSciencies or other
problems which occur to the Municipal Improvements during the warranty
period, or to otherwise fulfill the obligations of the under this A�eemern.
C. In the event that any eash, irrevocable letter of credit, or other surety referred
to herein is ever utilized and found to be deficient in amount to pay or
reimburse the City in total as required herein, Developer agrees that upon
bei.ng billed by the City, the Developer will pay within thirty (30) days of the
mailing of said billing, the said deficient amount. Tf there should be an
overage in the amount of utilized security, the City will, upoa making said
determination, refund to the Developer any monies which the City has in its
,�� possession whieh are in exeess of the actual costs of the project as paid by the
City. �
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D. Develo er hereby a ees to allow the Ci to s eciall assess the Develo er's
P � tY P Y P
property for any and all costs incurred by the City in enforcing any of the
terms of this agreement should the Developer's letter of credit or surety prove
insufficient or should the Developer fail to maintaia said letter of credit or
surety in the amount required above within 30 days of mailing of written
request by the City. Should the City assess the Developer's property for said
costs, the Developer agree not to contest or appeal such assessment and
waives all statutory rights of appeal under Mi�esota Statutes, including
Minnesota Staiute 429.081, to the extent of the costs- identified in this
Agreement.
E. That portion of said casl�, irrevocable letter of credit or other surety with
respect to the perfozmance of Site Improvements shall be released. upon
certification of the City Enguieer and approvai of the City Council that all
such items are satisfactonly completed pursuant to ttus Agreement.
F. In the event a surety referred to herein is in the form of an iz�revocable letter of
credi� which by its terms may become null and void prior to the time at
which all monetary or other obligations of the Developer are paid or satisfied,
it is agreed that the Developer shall provide the City with a new letter of
credit or other surety, acceptable to the City, at least forty-five (45) days prior
to the expira.rion of the original letter of credit. If a new letter of credit is not
received as required above, the City may without notice to the Developer
declare a default in the terms of this Agreement and thence draw in part or in
total, at the City's discredon, upon the expiri.ng letter of credit to avoid the
loss of surety for the eontinued obligatioa, The form of any irrevocable letter
of credit or vther surety must be approved by the City Attorney prior to its
issuance.
6. Su�reh►Release.
A. Periodically, as payments are made by the Developer for the completion of
portions of the Municipal Improvements, On- and Off-site Improvements,
and/or Landseaping Improvements and when it is reasonably pz-udent, the
Developer may request of the City that the surety be proportionately t-educed
for that portion of the Municipal Improvements which have been fully
completed and payment made therefor. All such decisions shall be at the
discretion of the City Couneil. The City's cost for proeessing reduction
.-� xequest(s) shall be billed to the Developer. 5uch cost shall be paid to the City
within thirty(30) days of the date of mailing of the billing.
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818-� 8l0/9l0 d ZZ9-1 59tiVZ89E91+ Vd 11VYr � NOSb313d NOSaVI NOSNHOf-INOa� Z9�91 1001-OZ-93�
B. Developer may request of the City a reduction or release of any surety as
follows:
i. When another acceptable letter of credit or surety is furnished t�
the City to replace a prior letter of credit or surety.
ii. When all or a portion of the Municipal Improvements have been
installed and as the conesponding special assessznents are paid,
that portion of the letter of credit or surety -atlributable to the
municipal improvemeats may be reduced by 50% of the dollar
amount of special assessments w}uch have been paid
iii. When all or a portion of the on- and off-site improvements or the
Landscaping Improvements have been i�nstalled, the leiter of credit
or surery may be reduced by the dollar amount at�ibutable to that
portion of improvements so installed, except the City shall retain
the letter of credit or surety in the amount of 25% of the estimated
landscaping costs for two years frorn the time of the installation of
said landscaping materials.
C. The costs incurred by the City in processing any reduction request shall be
billed to the Developer and paid to the City with�in thirry (30) days of billing.
7. Abandonment of Proiect - Costs a�d Exuenses, In the event Developer
should abandon the proposed development of the Subject Property, the City's
costs and expenses related to attorney's fees, professional review, drafting of
ttus A�eement, prepazation of the feasibility report, plans and specifications,
and any o�er expenses undertaken in reliance upon Deve�oper's various
representations shall be paid by Aeveloper within thirty (30) days after receipt
of a bill for such costs from the City. In addition, in the event Developer
abandon the projec� iun whole or in part, ceases substantial field work for
more than nine (9)months, fails to provide sufficient ground-cover to prevent
continuing soil erosion from the Said Plat, or fails to leave the abandoned
property in a condition which can be mowed using conventional lawn
mowing equipment, Developer agrees to pay all costs the City may incur in
taking whatever action is reasonably necessary to provide ground-cover and
otherwise restore Said Plat to the point where undevelop�d grounds are level
and covered witb permanent vegetation sufficient to prevent continumg soil
. erosion from Said Plat and to facilitate mowing of Said Plat In the event that
sa.id costs are not paid, the City may specially assess such costs aga.inst the
lots witlun Said Plat and/or take necessary legal action to recover such costs,
9
816-� 8l0/9l0 d d19-1 59YtiZ89E91+ dd i1VY1 � NOSa313d NOSbdI NOSNHOf-YVOa� 25�91 lOOZ-OZ-93�
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including attomeys fees. Developer laiowingly and voluntarily waives all
rights to appeal said special assessments under Minnesota Statutes section
h29.081.
S. Deve�oaer to �a_y City's Costs and Expenses. It is understood and agreed
that the Developer will reimburse the City for all �easonable adminis�ative,
legal, planning, engineering and other professional costs incurred in tbe
creation, administration, enforcement or execution of this Agreement and the
approval of Said Plat, as well as all reasonable engineering expenses incurred
by the City in designing, approving, installing, and inspecting said
Improvements descn`bed above. Developer a�ee to pay all such costs within
30 days of billing by the City. If Developer fails to pay said amounts, then
the City may specially assess such costs against the lots within Said Plat.
Heuring and Developer knowingly and voluntarily waives all r�ghts to appeal
said special assessments under Minnesota Staiutes secfiion 429.081.
Developer has the right to request time sheets or work records to verify said
billing prior to payment.
9. Erosion and S�ltation Control. Before any g�adi.ng is started on any site, all erosion
control measures�as shown on the approved erosion control plan shall be strictly
complied with as set forth in the attached Exhibit D. Developer shall also install all
erosion control measures deemed necessary by the City Engineer should the erosion
con�ol plan prove inadequate in a.ny respect.
�0. Arainage Requirements. Developer shall comply with all requirements set forth
for drainage into a.ny county ditch or other ditch through which water from Subject
Property may drain, and shall make any necessary improvements or go through any
necessary procedures to ensure compliance with any federal, state, couaty or city
drainage requirements, all at Develope�'s sole expense.
11. Maintaia Pnblic Property Dama�ed or Clnttered Durin�Construct�on.
Developer agrees to assume fiill financial responsi'bility for any damage which rnay
occur to public property including but not lirnited to streets, s�eet sub- base, base,
bituminous su�£ace, curb, utility system including but not limited to watermaiul,
sanitary sewer or storm sewer when said damage occurs as a result of the activity
which takes place during the development of Said Pla� Developer furthez agrees to
pay all costs required to repair the streets, utility systems and other public property
,� � dama.ged or cluttered with debris when occurring as a d'uect or indirect result of the
construction that takes plaee in Said Plat.
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816-� 6l0/1l0 d 119-1 59DYZ89E91+ Vd 11�IN '8 NOSa313d NOSbVI NOSNHOf-WOa� E5�51 100Z-OZ-93�
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s
AlUenville to Reimbursc Certain Ex�enditures from the Proceeds of]3onds �o be lssucd by
the City as amending adding the estimated reimbursement expenditure arnount at a cost of
$1,652,709.00 and on file in the offtce oftihe City Clerk_ Motion carried unanimously.
olton&Menlc. hi ,� ' eer's reeommendation for Release of Su,rety fo�T�wne La�ces
1� and 2-- Addition fc�tb.e fiiU �mount of the remainin ette
Assistant City Cngineer Nafstad indicated that David Hempel of CPDC has submitted a request
for Release of Surety for Towne Lakes 15�and 2"d Addition. Staff has reviewed the docunients
and is recommending that the Council approve the request to Release tlie Surety and the full
amount of the rcmaining Letters of Credit for Towne Lakes 1 A`and 2i°Addition be returned.
MOTION BX Council member Berni��g, seconded by Co�u�cil mecnber Fay to approve Boltion &
Menk, Inc. Engineer's recommendation for Release of Surety for Towne Lakes ls`and 2nd
Addition and that the full amount ofthe remaining Letters of Credit be returncd and on file in tlie
off'icc of the City Clerlc. Motion carried unanimously.
LEGAL
Annrove Citv Attorney�ec�nnmendation to reduc�tkae Letter of Credit for P�airie Run Additior�
Go d e e el
City Attorney Couri rcminded the Co�u�cil that the City is in litigation with Gold Key
Development on the Prairie Run Addition: There is an estiirated $600,000 in Letters of Credits on
the Prairie Run Addition, which Couri is recommending the Cily recluce.
MOTION BX Council member Vetsch, seconded by Council member Berning to deny the City
Attorney's recomnnendation to reduce the Letter of Credit for Prauie Run Addition {Gold I�ey
Development} and on file in the office of the City Clerk. Motio» carried unaniniously.
et M n M a.�7:00 .m. or n th or a public hearine or the Vacation o�'
���Dz)e�A.y_eA�e�F
City Attomey Couri informed the Council that in 2006 Council set a public hearing for the
vacation of MacKenzie Avenue N$. The notiee was published, but staff neglected to mail
notitications to the property owners. Staff is looking for Council to set another public hearing,
which staff will be certain that noti�cations are mailed to the appropriatc property owners.
NdOTION SY Council member Benting, seconded by Council member T'ay to sct Moaday,
March 5, 2007 at 7:00 p.m. or soon thereafter for a public hearing fo�the Vacation of MacKenzic
Avenue NL• and on file in the office of the City Clerlc. Motivn carricd unanimously.
ADMTNISTRATIOIv
Written Re�
City Adrninistrator Kruse noted that the City Hall conslruction continues to prob ess. The HVAC
system has been installEd. I'he majoriry of the kitchen equipment has been installed_
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FEB-17-2007 SAT 12�31 PM DEAN JOHNSON HOMES FAX N0. 7634794821 P. 02
� � 02r16-'1A7 15:48 FROMI-A]bert�illelCity oP +763-497-3210 T-076 P0fl1/001 F-14�
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,b, " v'11 '� 6976 Maln Avenue I�t.p_ • p0, 8ox V � AlberlvlNe,MN 58J01�(7691 d97.Jbaa � i0x;(769j 497-3�10
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, � Feb:uary 16,2Q07 '
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,� � �; Dom�& Johnson Conatnution„Inc. . '
. Afm: Jqlie Revsk .
i 4700 County Road 19 �,
� Medins,MN• 55357 I
� � RB: L�toer of G�,�edits
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i � � Dea�Ms, Ravek: , �II
( � . � TLid lot�r is to inEm�n you tbat at t6e Feb�us�(5, 200?City Canncil mecting, tho j
� City coutwi!aaeniraously mnved to dany t}�reqqest to nduce tite I.�tte�s of
� � C�Cdit hcld by,tl��City for m�micipal iruprovemants,ait��uutprovemeal�,and
� ', . laadscaP�a@ improvemmte to the Pteirie Ruu Addition. � �
, � Tba�tion was besed mi the curreat defisults af t6a Dcvrlopct,as havc bccn
ooaomuniot�ed tv dio Develope�ia a p�eviou6 noace of defeult,
: . SiAce�+ely, � ,
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�.�vl.�:
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