Laserfiche WebLink
<br />Mr. Bray indicated as it is stated in the letter to Mr. Bushman, the City's position is that these <br />documents have priority over MinnWest Bank's first mortgage on the property. Mr. Bray <br />indicated one concern as a result of the position taken by the bank is that this creates uncertainty <br />as to the relative status of the mortgage and the Master Development Agreement. Staff thinks <br />the resolution of that issue could be made more difficult if the sale proceeds and the issue needs <br />to be resolved with multiple parties, rather than an individual party. <br /> <br />Councilmember Dehen questioned why this is not a closed session meeting due to the discussion <br />on the City's legal strategy. <br /> <br />City Attorney Goodrich indicated when Mr. Bray comes to the discussion of legal strategy he <br />will advise that the meeting be closed. <br /> <br />Councilmember Dehen stated he may want to ask questions about legal issues as they are being <br />discussed. <br /> <br />City Attorney Goodrich advised they need to be exceptionally careful about closing the meeting. <br />A meeting cannot be closed to give general legal advice, but when discussing threatened <br />litigation they can close the meeting. Staffis cognizant of Council member Dehen's comments. <br /> <br />Mr. Bray advised he does not think it is appropriate to close the meeting to discuss the fact that <br />litigation may be an option; it is appropriate if they get into discussion of specific strategy in that <br />litigation. He is trying to lay a framework, and coming to the conclusion of that it is his <br />recommendation to the City that the City consider commencing a declaratory judgment action <br />against the bank prior to July 9th to resolve this issue. Staff thinks there are benefits of resolving <br />this prior to the foreclosure sale, rather than after the foreclosure sale. <br /> <br />Mayor Gamec indicated he has questions about property the City owns, including parks, trails, <br />etc., according to the Development Agreement. <br /> <br />Public Works Director Olson requested discussion about the recording sequence of the Master <br />Development Agreement versus the mortgage. <br /> <br />Mr. Bray indicated the Master Development Agreement and the other four agreements that were <br />referenced have all been recorded at the County. The Master Development Agreement was <br />assigned a record document number that is one or two recording numbers after the mortgage. <br />The document number is not the sole basis for determining the priority of the document. The <br />knowledge of the parties as to when it was recorded is also a relevant fact. <br /> <br />Mayor Gamec stated his main concern is that number one, he would like to have it sold as a total <br />project; it would be much easier to deal with. He thinks they would like to stick with their <br />original plan. They have a park that is in great shape and done, and fees were set for the Pact <br />Charter School to use the park. According to what they are being told the City does not have that <br />park. <br /> <br />City Council Work Session / June 5, 2007 <br />Page 3 of 12 <br />