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I I I Council Meeting Minutes January 13, 1987 Council Business, continued Schmidt asked for clarification that the developer will have the financing in place along with a Letter of Credit before the city spends any funds; once the city bonds and proceeds with clearing the site, we immediately assume all obligations, then at closing transferring title to the property to them and, at that point, they step in and the finance-providers can protect their interest in the site; and the only thing the City would have is the Assess- ment Agreement in terms of security so it is very important we know which company is signing the Assessment Agreement. Locke indicated when the property is sold, in addition to the Assessment Agreement, we would still have the Letter of Credit in place; in addition, a clause in the Development Agreement stip- ulates they cannot change their partnership without the approval of the City. If they default on the Development Agreement, the property does revert to the City. Schmidt inquired who would come first if the developer defaults, the lender or the city; Strehlow stated it is subject to the right of the first mortgage holder but the city has the right to acquiesce. Locke stated if the project were to be partially constructed and not proceed, the financial institution behind it would be equally interested in seeing the project through to completion. Schmidt stated now is the time to ask the "what if's," wants developer to know the city is very interested in seeing this project through to completion; and we are doing whatever we can to protect our interest. Benke asked, in terms of timing and processing of business owners and residents, to what extent contact has already been made to determine who would be interested in becoming tenants of the new building; Locke believes it would be in the city's best interest to have as many current tenants as possible become a part of the new project but would defer to Dave Parkhill to dis- cuss what the timing includes. Parkhill reviewed the proposed $4.5 million shopping center and the status of the project, noting a grocery or drug store would be the anchor tenant and that it would be designed very much like the Maple Wood Plaza. Parkhill noted the two apartment buildings and the nursing home would remain in place. With regard to Benke's question, Parkhill indicated he had not talked with any of the current tenants because it would not be appropriate at this time; however, if the tenants wish to remain and meet the requirements as determined by the lender, Parkhill would prefer to have them in the center. Page Eleven