Minutes - Council Work Session - 06/05/2007

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City Attorney Goodrich advised during this specific closed meeting tonight, the scope of representation by the attorneys would be limited to the pending foreclosure and the relationship of the priority of the recorded documents. The City has sent a letter to the foreclosing bank requesting information, which has to date not been responded to. There is nothing pending on the City Council on this issue, therefore it is an issue of first impression. The closed session would be necessary, as to have an open meeting would otherwise take place in the presence of potential litigants or potential litigants would have the ability to obtain the minutes. The closed session would benefit the public, as it would be an attempt to protect parkland and public property from the foreclosure process to the extent permitted by law. This meeting and closed session have been properly noticed. Finally, the Council needs confidential information in order to determine the available legal options. Consensus of the Council was to proceed to a closed session meeting based on the above legal advice. Mr. Bray stated in addition, there was one question he felt he was not able to answer fully, as it called for an analysis of the strengths and weaknesses of the City's claim, and it is not an appropriate discussion to have at an open meeting. Mr. Bushman stated he represents MinnWest Bank, who just took over lead in this credit on February 8, 2006. The project has not gone well, as the Council is aware. He does not represent just MinnWest Bank, but represents 23 other banks, as well as one other individual who participates. He would like to point out in this meeting that it is not his goal speaking from the Bank Group's point of view to engage legal counsel and start a bunch of fights. He does not think the legal fees are necessary. Never in any credit that has encountered some difficulties has he thought that the first place to resolve it was at the courthouse. Mr. Bushman stated he is very interested in holding dialogue with the City in how to resolve this. The goal of the Bank is to maximize the value of the asset, and fighting with the City will not get that done. To the extent that they can afford that the Bank would like to pursue those avenues. He would have preferred to pursue these avenues earlier, except unless he controls it or has an interest in it you become subject to lender liability or other issues. To the extent the Bank has just now started foreclosure action; it is time to begin the discussions with the Council. He would like to compromise. He is not here, nor is it the Bank Group's position, to try to pick a fight or drop the gloves; it is not in anyone's best interest. His position on what it takes to resolve this may be different than that of the City, and that may result in other legal action down the road. In fact, the discussion he had with Heidi Nelson and Brian Olson he thinks was just a courtesy call. It continued a discussion he had with Jim Norman when he was at the City; he enjoyed his relationship with Jim Norman. . The meeting with Heidi and Brian was more a hope and a desire to encourage a dialogue to resolve this matter. It has resulted in a letter from the City's legal counsel with a statement of facts. He would not argue with the facts presented, but he also thinks that if it gets to a case where there is a fervor to pursue this through the Courts, then so be it. This has already dragged out how many years past the timeline to get this developed. Mr. Bushman stated he looks outside and sees a lot of empty spaces. With that, in his opinion, there needs to be some reworking of this Development Agreement. It is an interesting dynamic with talk of fighting so hard to keep this Development Agreement in place, when it looks to be flawed. It needs to be City Council Work Session / June 5, 2007 Page 7 of 12