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Case #1 a: Continued <br /> <br />City Attorney Goodrich explained that the City Council has already approved a metes and bound <br />subdivision for the PACT Charter School and the Council would be approving a deed to Amcon <br />as they did with Academic Investments. In addition, the Council has approved a secondmy <br />development agreement with Academic Investments, but it was never signed by Academic <br />Investments so it would then be signed by Amcon. There are fees that they are asking to be <br />deferred. After meeting with Mr. Foster, they are proposing that the City place a mortgage on the <br />property in lieu of the letter of credit and the payment of the fees as described in the agreement. <br />In order for the City to access the fees they would have to foreclose on the property. It is <br />anticipated that the bonds will close in February but if rates change it could be as late as May 1st. <br />If the bonds are not closed by May 1st Amcon would obtain permanent financing. If Amcon is <br />unable to obtain permanent financing the City would still hold the first mortgage on the property <br />and would be ahead of any other vendor. Mr. Goodrich was not sure if the City had ever taken a <br />mortgage on a property in lieu of a letter of credit. The issue the Council needs to discuss is the <br />establish ment of precedent and why this situation is different. <br /> <br />Councihnember Cook inquired if one of the reasons this situation is different is because it is a <br />non-profit organization. <br /> <br />City Attorney Goodrich replied yes. <br /> <br />Councihnember Kurak inquired as to when the mortgage would be put in place. <br /> <br />City Attorney Goodrich explained that the City would place a mortgage on the property at the <br />closing of the land with Ramsey Town Center, LLC. He noted that if the Council agrees with <br />placing a mortgage on the property they should list why they chose to do so. <br /> <br />Mr. Foster stated that the school is non-profit, and it is extremely unlikely the City will ever have <br />a situation again where a developer will be coming in to take over for another developer and <br />there is delay on the financing. Because Amcon has to come in and take over for Academic <br />Investments there is a delay in financing the project and it is also the reason why Amcon does not <br />have a mortgage to take down the land like most other situations. He did not believe that the <br />City would be setting precedent by placing a mortgage on the property because it was not likely <br />that they would see a similar situation again. <br /> <br />Mayor Gmnec stated that one of the reasons is that the Council has approved the issuance of <br />revenue bonds to construct the school and the mortgage is a measure to protect that the City will <br />be paid for site improvement costs. <br /> <br />City Attorney Goodrich inquired as to who can stop the bond sale. <br /> <br />Mr. Cairns stated that they will not come back to the City until they have a bond purchase <br />agreement. <br /> <br />City Council/December 16, 2003 <br /> Page 13 of 33 <br /> <br /> <br />