Agenda - Council - 10/07/2003 - Special

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developer, and other pending commitments we have in the Eastern quadrant of the site. Proposed Alternate Security. As security for the Plat Phase, we request approval of this alternate security as defined in the Development Agreement. We will provide a Performance Bond equal to 125% of the entire Plat Phase estimates: $8,465,989.36 x 125% = $10,582,486.70 The surety, guarantee of performance, will be written to the National Contractor, Shingobee Builders, Inc. and collaterally assigned to the City of Ramsey. The $10,500,000 bond will support the estimated $2,500,000 - $3,000,000 of winter work, the balance of the Plat Phase, and bond: 125% of the 35% surplus estimates, for contingencies. We will provide to the City c~i~ Ramsey evidence of construction financing sufficient to pay for Plat Phase work from the Community National Bank. We will provide the City of Ramsey, via an agreement with the bank, copies of construction draw requests, lien waivers and other satisfactory evidence of payment as the work proceeds. This package of alternate security is traditional of many, if not most, transactions of this type. Secured Performance and Financing. As the Master Developer, Ramsey Town Center (LLC) will control the design and sequence of development activity and shoulder less than 10% of the project development costs. The Secondary Developers will supgort 90% of the improvements. As verified by the City's Represm~tatives in their financial due diligence review for the City, the Ramsey Town Center (LLC) initial financing package does not include $10,571,000 surplus in cash for a cash bond or letter of credit. Our initial financing package does include the construction financing for phases within the Plat Phase. The additional cash was not an oversight. A cash bond or letter of credit in this amount exceeds the lending limits, individually or cumulatively of the Community Bank Group and exceeds any or all standing equity. For this reason, all fourteen (14) drafts of the Development Agreement include, a provision for alternate financial security, which we could offer directly to the City Council. Secondary's Post. Secondary Developers, per the Development Agreement, will continue to be subject to the security arrangements as outlined in the Development Agreement.