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EDA 2004 01 26CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING JANUARY 26, 2004 Chairman Furlong called the meeting to order at 8:55 p.m. MEMBERS PRESENT: Tom Furlong, Steve Labatt, Brian Lundquist, Bob Ayotte, and Craig Peterson STAFF PRESENT: Todd Gerhardt, Justin Miller and Roger Knutson PUBLIC PRESENT: John D. Rice Clayton T. Johnson Dan Engelsma Glenn & Liz Baird Mike Korsh Janet & Jerry Paulsen Debbie Lloyd 525 West 78th Street Bloomberg Companies Inc. Kraus Anderson Chanhassen Cinema Kraus Anderson 7305 Laredo Drive 7302 Laredo Drive BOWLING ALLEY UPDATE. Miller: Two weeks ago we gave an update on the status of the bowling alley negotiations. At that time there were some concerns because it appeared that talks had kind of hit a wall. ! think the tone from the meeting 2 weeks ago was that there needed to be some work done. Needed to see some concrete evidence of some negotiations between the parties involved. Since that time there has been quite a few negotiations between mainly Market Street Station and the Chanhassen Cinema. We have invited representatives from those entities to be here tonight. The main issues that were keeping the negotiations from proceeding were a release of the parking easement. ! believe that those issues have been resolved. Those were questions that the participating entities could probably answer better than ! but we are confident that things have proceeded fairly well from the last time we met and we'd be happy to answer any questions. Furlong: Thank you. Questions for staff. Labatt: I'm curious to hear from the representatives. Furlong: ! think we all are. Okay, very good. Good evening. Dan Engelsma: Good evening. My name is Dan Engelsma with Kraus Anderson and ! think the staff report is pretty succinct. We're working towards a close for towards the end of December of last year. We ran into an issue on the parking easement and that put us into a little bit of a tailspin. We hit some roadblocks. Those have subsequently been Economic Development Authority - January 26, 2004 worked out really over the last week now and our problem at this point is we're in agreement, all of the parties are in agreement but we have a new party at the table with the cinema and we have a new lawyer now that we're trying to get up to speed. And we have gotten copies of all of the documents in their hands within the last couple of days and we think we need probably 2 to 4 weeks to get the lawyers up to speed. Make sure that all of those documents are in correct form. ! suspect because we have a new lawyer at the table there will be some tweaking of documents that we have to make so, and we're terribly embarrassed that we didn't get this closed last fall like we told you but we don't want to come here again after this without a closing schedule. But we really, we did think we had it and we sort of fell out of bed a little bit but it's now back on track so we're comfortable. We've had a meeting of the minds. We've got the theater here tonight. Glenn can certainly talk to you and Glenn and ! have had a number of conversations over the last several days and ! think we have an understanding so we can move forward at this point. Furlong: Questions? Peterson: ! guess I'll wait until the other parties speak. Furlong: Okay, very good. Thank you. Glenn Baird: Good evening. I'm Glenn Baird with the Cinema. ! guess I'm in the hot seat. ! guess ! would just have to agree with everything that Dan just said. We're in agreement. We seem to have sorted out many of the details regarding the parking issue and we literally hired our own attorney last week and we're trying to get him up to speed like Dan mentioned and he's working full speed on it and we have a couple of words that have to clarified in the documents but in principle ! think we are in agreement. So ! don't see anything stopping the process at this point in time and to go along with what Dan said, we're somewhat embarrassed by this but we're trying to get it done and we appreciate your patience in allowing us to get this completed hopefully within the next 30 days so we don't have to do this again. So ! don't have any other statements to make, but I'll be happy to answer questions. Furlong: Okay. Peterson: ! guess the only question that ! would have is, does it take 30 days really to, can we set a close date and move towards that close date and keep things moving along. Obviously if you can do it faster than 30 days you're going to save lawyer costs and ! guess it's in everybody's best interest to save cost but ! think it seems as though that would be reasonable to, if he has basically 5 weeks. It seems like an onerous amount of time to review and do some wordsmithing but ! think everybody at this table wants to keep things moving fast so you're going to probably hear that from everybody saying can we do it sooner. What will it take to do it sooner if possible? Glenn Baird: Truthfully as soon as we can get the, we have documents in our possession from Market Street Station and those are the similar documents we had last December. 2 Economic Development Authority - January 26, 2004 Our attorney just has to go through them. He got them last Friday and I've gone through in detail with him word for word on many of the points that were at issue and have those straighten out so it's just a matter of him reviewing those documents. Making sure that, ! think the only one that might be hanging out right now, and we're working to resolve that, there's really no negotiations, it's just a matter of getting the documents in order and that's with Southwest Metro. But John Rice has indicated that that may already be further along than we thought so ! don't see why we can't get it done sooner, but ! don't think ! can stand here and say ! can have it done by Friday. ! just don't, ! can't say that with 100 percent confidence but ! think within the next 2 weeks ! can be much more confident to say that. And ! don't see why we couldn't get it done by that time, but to stand here and say ! can absolutely guarantee it, ! can't do that and ! wouldn't want to say that. But 4 weeks would be ! think ample time. And it shouldn't take that long. Dan Engelsma: We can, and we can and will and have as we have in the past work with staff and really keep staff informed and give them a weekly update, but as we talk about this, this is really more than one document. If it was the one document that put us behind, a parking agreement. Parking cross easement agreement. But this lawyer has to review all of the Southwest Metro. There's an easement that Southwest Metro has on the cinema. There's cross easement agreements for ingress and egress, so there's quite a number of documents and we're trying to get this individual up to speed on so it's, ! would agree if it was wordsmithing on one document, we certainly don't need a month but we have probably 6 or 7 documents that all interplay with each other. So it is quite a bit of work. Quite a bit of reading and probably quite a bit of searching to make sure that everything is correct. There's a lot of history here and you people know the history better than even we know the history but we've been spending a lot of time trying to unlock things too so it just takes time and we will do everything in our power to move that schedule up. What we're trying to do is not have to come back again. Peterson: So is your assumption that you'll set a close date in 4 weeks or that you close in 4 weeks? Dan Engelsma: We can set a close date as soon as the lawyers have signed off on everything because we've already had ! think one or two close dates set up. And we're prepared to go to closing as soon as all the documentation is complete so if we get that documentation complete, we can go to a close probably within a week after completing that documentation. But we're asking for a month just to, we're asking for a month before we commit to the close just to make sure everything is done this time so we don't have to go back again but ! think each week we can work with staff and keep everybody informed as to what we're doing and I'm sure they can then keep you informed so that, we had an aggressive schedule going in. We did everything we could do to make it. We almost made it and so. Peterson: Okay, thank you. Glenn Baird: Other questions? Economic Development Authority - January 26, 2004 Furlong: Questions? Labatt: Not right now. Furlong: No. Gerhardt: Glenn, I just had one question. Is Ray planning on being back in town in the near future? Glenn Baird: Yes. He is, last we talked with him he is on his way back to Minneapolis today. So he's just not available and he has agreed to sign all the documents based on what we have worked out so that should not be an issue. Gerhardt: Great, appreciate it. Thank you. Furlong: So we're looking at, I guess from the timing standpoint, just to clarify, 2 to 3 weeks to finalize the documents. Get agreements on all the documents from the attorney and then a closing. Dan Engelsma: As quickly thereafter as possible. Furlong: Within a week thereafter. Dan Engelsma: Since I'm not a lawyer and ! don't know how long it took the lawyers to set up the last closing, I'm thinking it could be done within a week because everything should be ready. ! mean would you agree with that? John Rice: Plus the, John Rice, I'm the attorney for Bloomberg. Once the documents are basically agreed upon, then it's approximately a week because it's a matter of gathering people in the title company and what time of the month. End of the month the title company when they're busy, whether they can do it but. Clayton Johnson: The financing's in place. Furlong: So the only, there's no contingencies here. The only thing is just getting the new attorney up to speed. Getting an agreement on the language and getting it done. Dan Engelsma: Getting agreement on the language and then getting all of the documents signed by Bloomberg, Kraus Anderson and the theater. John Rice: There are a lot of documents and to handle all the easements and create the necessary replacement documents. There's just a lot of documents. I've got half a dozen. I think Mr. Kelly did like 10 agreements. And Mr. Schmekpepper with Kraus Anderson did, he did more than I did so he's at like about 8. Furlong: Okay. 4 Economic Development Authority - January 26, 2004 John Rice: Besides the deeds and the other things that go into a normal closing. So there's a lot of documents. Furlong: There's volume, thank you. John Rice: ...we're lawyers, we love documents. You just got to keep jabbing us. Dan Engelsma: And we will. Furlong: Good. Any other questions then? Gentlemen, thank you. Ayotte: Thank you. Furlong: Appreciate your being here this evening. I'll bring it back to the EDA to the commissioners for discussion. Comments. Thoughts. Labatt: I'm encouraged to see the vast majority of the players here. ! realize Ray's gone. Thank you for coming and updating us. ! think that their 30 day window here of opportunity is a valid request and as long as we can keep it in that 30 days and if they can continue to update Justin weekly on the progress and then he can shoot out an e-mail to us once the documents are agreed upon. Once they're signed and when they pick a closing date. I'm fine. We're too close to shove them out the door and poke their attorney so, I'll leave it at that. Furlong: Okay. Thank you. Other comments. Lundquist: ! just find it incredibly ironic that had the parties done what they agreed to do back on the 29th of May, that we wouldn't be here today. Two weeks ago it was give us 2 more weeks. Now it's give us 4 more weeks. Now we have another party in the process that we've heard that they've agreed to but as we have learned through this process, it ain't over til it's over so my position from 2 weeks ago stands that ! still believe our only recourse is to force the 30 day cancellation because you know billable hours are billable hours. You can put them in, a lot at once or you know spread them over a 3 or 4 week process and we've just seen too many times through this process that it's taken a lot longer and there's always something that comes up, so my position remains the same as it was 2 weeks ago. I'm incredibly disappointed through this process that we've continued to drag it out and anyway, it is what it is ! guess and at this point there probably isn't a lot we can do so. Furlong: Okay, thank you. Other comments? Ayotte: The last time ! spoke ! did voice a concern about not having enough information. ! do understand now the reason for the change on some of the things that occurred, but at the 30 day mark ! will probably side more with Councilman Lundquist's view. We really have to, have to get it done. So I'm taking a moderation. Moderate position between Economic Development Authority - January 26, 2004 Steve and Brian but I'd be very, very concerned if at the end of 30 days ! found out that there was another reason why we didn't get it done. Thank you. Furlong: Comments? Peterson: I'll echo Bob's comments exactly so. Furlong: As will I. As will I. I mean we got more information tonight than we did 2 weeks ago. That's helpful. And we can understand the situation. Whether or not we like it, we can understand it but ! agree with Mr. Ayotte and Mr. Peterson and others, it's time to get it done so. Very good. Is there any other discussion or actions being desired? Gerhardt: No action's needed on this item. Furlong: Alright. APPROVAL OF MINUTES: Peterson moved, Lundquist seconded to approve the Minutes of the Economic Development Authority meeting dated January 12, 2004 as presented. All voted in favor and the motion carried unanimously with a vote of 5 to 0. Lundquist moved, Furlong seconded to adjourn the meeting. All voted in favor and the motion carried. The Economic Development Authority meeting was adjourned at 9:15 p.m. Submitted by Todd Gerhardt Executive Director Prepared by Nann Opheim