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HomeMy WebLinkAboutJune 5, 2000 Special Meeting Mayor Gary L. Peterson CITY Of COLUMBIA HEIGHTS Donald G. Jolly Marlaine Szurek 590 40TH AVENUE N.Ir., COLUMBIA HEIGHTS, MN 55421-3878 (6 '12) 782-2800 TDD 782-2806 Julienne Viyckoff John Hunter Please note: City Hall Phone Numbers have changed. New numbers are: Main Number (763) 706-3600; TDD (763) 706-3692 City Manager ViaIt Feltst ADMINISTRATION NOTICE OF SPECIAL CITY COUNCIL MEETING Notice is hereby ~ven that a Special Ci~ Council Meeting is to be held in the CI~ OF COLUMB~ HEIGHTS ~ foHows: Special Meeting of.' Date of Meeting: Time .of Meeting: Location of Meeting: COLUMBIA HEIGHTS CITY COUNCIL JUNE 5, 2000 IMMEDIATELY FOLLOWING EXECUTIVE SESSION CONFERENCE ROOM I A GENDA CALL TO ORDER/ROLL CALL e ADDITIONS/DELETIONS TO MEETING AGENDA (The Council, upon majority vote of its members, may make additions and deletions to the agenda. These may be items brought to the attention of the Council under the Citizen Forum or items submitted after the agenda preparation deadline.) 3. ITEMS FOR CONSIDERATION A. Supersedeas Bond for Leland Stauch Case. MOTION: Move to authorize the Mayor and City Manager to enter into an agreement with Arthur J. Gallagher & Co. of Minnesota, Inc. to acquire a supersedeas bond as required by the court order of May 25, 2000 in relationship to Leland Stauch's attorney fees. MOTION: Move to waive the reading of Resolution 2000-49, there being ample copies available to the public. MOTION: Move to adopt Resolution 2000-49, being a resolution authorizing borrowing money in the name of the City of Columbia Heights. MOTION: Move to authorize the Mayor and City Manager to enter into a promissory note with Northeast State Bank for the purpose of establishing a letter of credit as collateral for a supersedeas bond. 4. ADJOURNMENT The City of Columbia Heights does not discriminate on the bash of disability in the admission or access to, or treatment or employment in, its services, programs, or activities. Upon request, accommodation will be provided to allow individuals with disabilities to participate in all City of Columbia Heights' services, programs, and activities. Auxiliary aids for handicapped persons are available upon request when the request is made at least 96 hours in advance. Please call the City Council Secretary at 706-3611, to make arrangements. (TDD/706-3692 for deaf or hearing impaired only) EQUAL OPPORTUNITY EMPLOYER i I COLUMBIA HEIGHTS - CITY COUNCIL LETTER Special Meeting of: June 5, 2000 AGENDA SECTION: NO: ITEM: Parking Ramp Lease Estoppel NO: Agreement ORIGINATING DEPARTMENT: CITY MANAGER' S CITY MANAGER'S APPROVAL DATE: ~ DATE: Our City Attorney has a conflict of interest regarding this agreement in that an attorney from his finn is representing the financier. Therefore, Steve Bubul, Kennedy and Graven Chartered, will review this agreement before Monday night. This is essentially the same agreement as three years ago, with some minor changes. If these issues are found to be minor in nature, I will recommend approval at the special City Council meeting. I apologize for bringing this directly to a special City Council meeting: however, Gordon Awsumb had his financier deliver this to us in mid week for a Friday, A.M. closing. The bank did not accept a letter I drafted, which stated that I would recommend City Council approval of the agreement, assuming it passed the approval of Steve Bubul, the attorney in this case. The bank apparently was insufficiently satisfied with this statement and is now asking for City Council approval instead. If any significant questions remain unanswered by Monday night, I will not recommend approval. I do not anticipate that scenario. The estoppel certificate and agreement that is being proposed is attached. Further documentation will be available Monday night. COUNCIL ACTION: CiTY 'OF COLUMBIA HEIGHTS 590 40TH AVENUE N.E., COLUMBIA HEIGHTS, MN 55421-3878 (612) 782-2800 TDD 782-2806 lee Ndu,son. Viac Prcldmz Pmidtnzl Bank, FSB 4600 FAst-Wcf HilAway. S.i~ 415 B~Jlesd~ Marylind 20814 lIE: Fw~IpI Cudficae mad A~,a,,.tat (Fnnpl~l CeniScm) ia cremeorion widl fefintqeqnl m' the Coinaids Heilhb Office Cemer owmd by /adm Sm~~b:. 11m~oppI Camlkm mbr-.s mvarious al,,/n,,m, mlmed to thc trammidaS fac~ity mid related wmlkwmy. in connection with a ;violas fefinmcm; m' the OITgt Cantor. the City apix'oved and ex~'med a P. fkin8 Ceflificae between the City and Ik['Vn,,,d Loaf Services. L.P. dated July 14. lY97 (the ~ Cefd~cme'). This k'uer cornsfire dam& i will Im tim Fmtopl~_l Cenifcde to dm City Comcd at iu ant feluhr mmdnl, and rectumely* almlmovml. pfwided tim tim dok'm im modified roach that iu terms are fona ib oE courme mulmy~ la the City'm demminaim dm ai fepm.mmetrm,~.,e,; Bade by the City an THE CITY OIe COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON TMIr BASIl OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER BSTOPPEL CERTZFICATE AND AGREEMENT THIS ESTOPPEL CERTIFICATE AND AGREEMENT ("Agreement~) made this day of , 2000. by CITY OF COLUMBI&HEIGHTS, a Minnesota corporation, (6he "City"), for the benefit of PRESIDENTIAL BANK. FSB, a federal savings bank, (the "Lenders). WHERSAS, Lender has agreed to make a loan (the "LoanM) to IaAKE-STAT~ PROPERTIES, INC., a Minnesota corporation, (the "Borrower') secured by a Mortgage made by Borrower dated of even date herewith (the 'MorUgage") encumberiz~ certain real property more particularly described in "EXHIBIT A" attached hereto and incorporated herein by this reference and all right, title and interest of Borrower under the following agreements (collectively, the "Parking Agreements')~ 1. =he Management Agreemen~ Eor Parking Facilities and Lease of Plaza Property dated July 20, 1982, originally executed beCween The Housing and Redevelol)ment Au~hor~t~ xn and for the CitV of Columbia Heights and Ter~ Evenson ("~ven!~') relating to =he const~ction and use of a'parking garage facility (the "P-rking G~raae.) on certain real property (the "Pp~kir~ Gar~oe Farce1") described in ~thit B attached hereto and the lease of certain real property (the .W~]kw~y p~rce]~), as described in ~xhibit C attached hereto, Co Evenson for the construction of an enclosed overhead pedestrian walkway (the ']I~", and collectively with the Parking Garage, the Parking Garage Parcel and the Walkway Parcel, the 'P~rkin~ Property·) between the Parking Garage and the Office Building Parcel~ and 2. the Agreement Between The City o~ Columbia Heights and Zaidan Holdings Inc. for the Operation of the Parking Ramp dated June 30, 1988, originally executed beuween the City and Zaidan Holdings Inc. ("~a~dan"}, as subeequently modifiedbytheAgreement for Modification o~ Managemenc Agreement for Parking Facilities dated Pebruar? 11, 1991, nr~.ginally executed between the Cit~ end Zaidan: and WHEREAS, the proceeds of the Loan shall be used to refinance certain indebtedness owed by Borrower; and W~EREAS, Lender has agreed comake such Loan only upon City's delivery of the certifications and agreements set forth herein, upon which bender shall rely. NOW THEREFORE, in consideration of the sum of Ten Dollars ($10.00) in hand paid b~ Lender unto City, ~he receipt and sufficiency of which are hereby acknowledged, City hereby cert~fies and agrees unto and with Lender as follows: 1. The "WHEREAS" clauses set forth above are incorporated herein by this refer~nc~ as if set forth in full. 2. The copy of each of the Parking Agreements attached hereto is a true, complete and correct copy of same. Borrower has succeeded to all right, title and interest of Evenson and Zaidan under the Parking Agreement. 2. NO default or other event has occurred which, now or upon notice and/or passage of time or both, entitles City to terminate or exercise any other remedies under the Parking J~Jreements. The Parking Agreements are in full force and effect, are enforceable against City, and City has no defenses to the enforcement of same. 3. City owns fee simple title to the Parking Property and has not and will not grant a lien on its fee simple interest in the Parking Property and has not and will not assign its interest in the Parking Agreements. 4. Neither of the Parking Agreements has been modified and City will not modify, cancel or terminate either of the parking Agreements without Lender's prior written consent. bender w~11 not be bound by any modification without its prior written consent. 5. City hereby consents to the assignment and mortgage of all of Borrower's right, title and interest under the Parking Agreements (herein, the "Borrower's Interests") to and for the benefit of Lender. 6. In the event bender exercises any of its rights under the Mortgage, then bender and/or lc successors and assigns shall have all of the rights and privileges of Borrower under the Parking Agreement, including any and all renewal rights contained therein. 7. The bender shall not become personally liable for the obligations of Borrower under the Parking Agreement unless and until the date it becon~es the owner of the Borrowerrs Interestsby virtue of a foreclosure. assignment in lieu of foreclosure, or otherwise (the 'transfer date'). and shall not be liable for any obligations or l~abilities accruing pursuant to the Parking Agreements prior to the trapafar date, or.subject to any offsets or defenses available to the City which accrued prior to the transfer date. After the transfer date Lender shall remain liable for such obligat~.ons only so long as the Lender remains thc owner of the Borrower's Interests and shall not be liable for any amounts in excess of its interest in the Parking Property. 8. If the Lender should become the owner of the Borrower's interests, it may assign such Borrower Interests without any requirement of the City,s consent. ~. The default provisions of che Parking Agreements are hereby modified to provide as follows: (a) A copy of each notice of default which the City serves upon the Borrower shall also be served by registered or certified ma~l upon the Lender at 4600 gast-Wes~ Highway. Suite 4~5, Bethesds, Maryland President. 20814, At=ention: Lee ~derson, Vice (b] In the event that the Borrower shall fail to cure the default within the time for cure set forth in the Parking Agreements, further notice to that effect shall be given to the Lender by registered or certified mail at the address sac forth above. (c) If the City is tmut required to give Borrower notice of a default prior to terminating either of the Parking~4reements, City shall nonethelees give Lender written notice of such default by registered or certified mail at the address set forth above. (d) The Lender shall be allowed such time after receiviz~ s notice as set forth in 9(a) (b) or (c) above as maybe required to either cure the default or to institute and complete foreclosure proceedings, or otherwise acquire Borrower'e Interests. Also, so long as the Lender shall be engaged either in curing the default or in proceeding to foreclose, r~ such default shall operate, or permit the City, to terminate the Parking Agreements. (e) Neither the bankruptcy nor the insolvency of the Borrower shall operate, or permit the City, to terminate the Parkin9 Agreements so long as all rent and other payment required to bepaid by the Borrower continues to be paid in accordancc with the terms of the Parking Agreements. 10. The bender is hereby expressly authorized to exercise any renewal option granted to the Borrower under the Parking Agreements. If the Borrower fails, within the time limit0 to exercise any option of renewal, the Lender must be notified by registered or certified mail at the address set forth ~bove in Order that the LeD~ler, if it so chooses, may exercise the option, eluher on its own ~e~alf or on behalf of the Borrower. Any notice of intent not to renew shall not be effective unless ~oined in by Lender. 11. The interest of the Lender shall be included in all fire and other hazard insurance policies relating ~o the Parking Property, pursuan~ to a standard mortgagee clause or endorsement. 12. The City hereby waives its claims to any insurance proceeds ~or the Parkin~ Prol~rty so long as hazard insur~nce proceeds, and any condemnation swards for a partial taking oZ Uhe Parking Property, shall be held by the Lender for application to ~he restoration of the Parking Property (to the extent not inconsistent with th~ requirement of the provisions of che Morta~e). No adjustment of losses shall be made without Lender~s prior written consent. 13. Lender is hereb~ authorized to participate in any condemnation proceedings. There shall be no merger of the Parking Agreements, nor of the estate created thereby, with the fee estate in the Parking Property, by reason of the fact that the Parking agreements, or the estate created thereby, or any interest in either thereof, may be held airectly or indirectly by or for the account of an]/person who shall own the fee estate in the Parking Property or any portion therein, and no such merger shall occur unless and until all persons at the time having any interest in the fee estate and all Dersons having any interest in the Parking Agreements or the estate created thereby, including the Lender, shall join in a written instrument effectinS such merger. 15. City waives in favor of Lender, and its successors and assigns, any right of first refusal that the City my have to acquire the Borrower's Interests. · 16. The agreements set forth herein shall be binding upon the City, its successors and assigns. City: CITY OF COLUMBIA H~IGHTS By: Title: c]8lL Olg , 'Or.U'M:OE 'iS/8§:Oi O0 t CITY COUNCIL LETTER Special Council Meeting of: June 5, 2000 AGENDA SECTION: NO: ITEM: Supersedeas Bond for Leland Stauch Case NO: ORIGINATING DEPT: BFINANCWi~.,E y: LIAMC'~/LRITE DATE: 06/01/2000 CITY MANAGER Attachcd hcrewith~is a docmcnt from Bama, Guzy, & Stcffcn indicating that the City must post a supersedeas bond in relationship to the Leland Stauch case in the mount of $333,058.60. After researching this with our insurance agent, the most economical way to acquire a supersedeas bond is to post a Letter of Credit with the insurance company. By doing this, the cost of the actual bond is significantly reduced. Although there is a cost to acquire a Letter of Credit, the combined total is significantly less than posting a supersedeas bond without a Letter of Credit. In order to establish a Letter of Credit the City must sign a note with the bank. Attached herewith is a sample of the note that we would need to sign with Northeast State Bank in order for them to issue a Letter of Credit. Their fee for the Letter of Credit is $3,330, the bonding fee for the bond then is $4,300, for a total of $7,630. In addition to this, the council must authorize the Mayor and City Manager to enter into an agreement to acquire a supersedeas bond. RECOMMENDED MOTION: Move to authorize the Mayor and City Manager to enter into an agreement with Arthur J. Gallagher & Co. of Minnesota, Inc. to acquire a supersedeas bond as required by the court order of May 25, 2000 in relationship to Leland Stauch's attorney fees. RECOMMENDED MOTION: Move to waive the reading of Resolution 2000-49 there being ample copies available to the public. RECOMMENDED MOTION: Move to adopt Resolution 2000-49 being a resolution authorizing borrowing money in the name of the City of Columbia Heights. RECOMMENDED MOTION: Move to authorize the Mayor and City Manager to enter into a promissory note with Northeast State Bank for the purpose of establishing a letter of credit as collateral for a supersedeas bond. WE:SIns 0oo5 121 COUNCIL COUNCIL ACTION: MAY.'26'001FRll 11:09 BAR~%A GUZY *]JS/ZS/le IV|q1 Tot Thomas P&trick Nilone STEFFE TEL:612 780 1777 P. 002 From:U, S. Dtetrict Caurt I rage Z/4 UNITED STATES DIGTRI~ COURT DISTRICT Olr ~A Civil No. 4-95-404 fJRT,'RLE) ORDER ON ~ANT'S MOTION !fOR A b'fA V O!r gNFO!tCEMF, NT Thomas J. White, KLEIN & WHTrE; 4570 77m Street West, Suite 100, Minneapolim, MN 55435; aml Allen R. Dellpond, LAW OFFICE, t~S Marquette Avtmue, Suite 720, Mi,,.~q~olis, MN .%$403. fro' plaintiffs. Thomas P. Malone and BradIcy A. Kletzlm', BARNA, GUZY, & Si'i~I'P!~N, LTD., 400 NcelaG..n Finmmial ~ 200 Coon Rapids Boulevard, Minnnpol;% MN 55433-5894, for defendant. This matter is beforc Ihe Court on defmla~'s motion for a my of judgment pet,dinS its sppui d tl~ FebrumT 1999 jory verdict in plaintiffs' favor in the amoont of S120,000, and pending ils at;eel die Courrs March 28, 20{}0 award of atmmey's fees and oosts in the arnotmt of $298,058.60. After defendant filed the instant motion for a my of judgment k Eighth Citmdt sf&~d tim February 1999jury wmti~. De6mdant's aimeel fsmn the Courrs Ma~ 28, 2000 Order is still pending. Ordinarily an appellant nmy fmlmem and obtain a slay of judgment pending q3Fd as a manor ofript ulm lostinS a -w--~ba, boat See ~lmeHcds J4Yn. A~.t.I.~. v. ,4roeHem, BromnfcmWmFPm,emomf T/Mesrs,/sac., 87 S. Cl. !, 3 (1966); Fed. R. Civ. r ltte FlailIll I. RIGaleT IMTI. .MAY.-2f>'00[FR!} 11:09 BAR~A GUZY "151Z5/11 &9:41 To:Thomos Patrick Phione STEFFE TEL:612 780 frml:U. S. Ozstrict Court & 1777 P. 003 P.ge P. 62(d). Nev~, because defendant's sppeal fi~rn the jury verdict ires now been decided, a my pendine its appeal of th~ verdict would no Ionlet be appmpmtc. The Court for this teason denies the portion of defesdnt's motion seeking a stay of enfor~a,,,t of the $1 20,000 judgmet on din jury verdict. The Com't nohc&cless grants the potdon of defendan/'s motion n,,4ucsti~ a my of the March 28, 2000 judgtnem pertainint to cons and atfofney's Fees. Pursuant to Rule 62{d), the stay will not lake effect until such time as defendant posts m supetsedea bond oppmved by the Court. The mount of the bi~nd posted ragleT these ctmmennccs should include the F~ia,~iLlel air, mint of the judgment in addition to costs, inSmeet and damnIra lot delay. See Xmericae llps., 87 S. CL at 3. The Court finds that e bond in the amount of ~33,055.60 wOtlld be Sllflieieflt I11 ~ plaintiffs' inlerests. This amotmt includes the 1298,05S.(1) unde'lyi~g Jsdi3mm( ~tom whir& defeadant mppeab, as w~ll as S35,000 for estimated costs, iatmst and damales for delay. In deriving this figure, the Court cstinmtcs that plaintiffs wffi incur $500 in corn nd $12,500 in attomey's fees in Htiptinl defettdam's appeal 5,ore dig C~mTt's Match 28 Order.a The Court further estimates that $22,000 in post-judlmcnt interest will me during thc appnl period? ~Plaindlh mdmm eat k aWe~ coals will total Sl,000. The Court divided this nund~rinhalfineelettoesdnmeetemms~r :cir~l mdyMthdgmcoadqspml. Moeeovec plaiml~ atimate dm t~eir mmm~', faro in ~ _ F_ , wiah The Cram ha ramreel dm pbimlff's mmsy'z fees in appeal will ;x/male d~s rimmare. 'Phint~fts ,timm post-judSs~a lames drains Us sppal psiod in tie smoum of S33.095.67. h ~,~'esf this fig pl~'~'~r - ='~rd dmt omit appeal would Uke eight~n accordinllyrelmedlbeFar4usedboadamoumlarednbembymmlbird. Plabi~Inmekto innrose ~he band smms b~ thsit ._ tj reed "pm-~' linerot m the Coun's ,somey's fee sward from th~ period betwere the Fdmmry 1999 jury vetdin ard the Man:h 2000 tFoomotc o-n,:~amd on next pale. } NAY.-26'OOEFRI) 11:09 BARNA GL'ZY STEFFE 95/2~/B ],9:41 ToITh~BIs Petr&cic HalanN FPmINU. TEL:612 780 1777 S. O~rLc~ (;our~ X P. 004 Page 414 rn r~ching this dcterminetion the Court notes that the ~ have, ;merits over- zealoes|y. disputed the amount of the suFztacdeu bond to be required. The Court rendads the partics that its Onler on dmis bsue/s not dispos/tive of any amount, m addition to the judgment atommr. to wldch plmh~ffs ultimately will be entided. It is only an emmaate ofthe possible costs pls/utif~i nay intorot ms a result ofdefeedint's appeal. ORDER Bued on the foregoing. and ~I! ofih~ r~ords. fil~s. md ptoceeding~ he~, IT IS H~REB¥ ORDERED thai., !. Defendant'~ motion for a my of ~nfome,.,,t [Docket No. 228] is GRANTED jR part end Df, NIBD tu paFL 2. Execution oa d:c ~o~rt*s Order dated March :28, 2000 ~ba]! be STAYED pendir~ def'endant's epeal ~ze: that Order. This Order minI1 utke effect upon the posdn~ of' · ~scdeas bond by defendrut in she amount or $) 33,0 ~58.d0, and upo. the C:oun's appro~ offaid bond. 3. Defendmt's motion for. my of ufotc, c~ nt is DENIFJ) as i~ tela~ to the Com't's Order outhe February 1999jut3, verdict, JOHN R. TUN'~ U~imd Slst~ !:)i~.ict Judge PlaintilTs' cha .,_1 :_as:an of Ibeir requesl is: _,(,u.::'--. Sinec the Court did not ir, sue the cot ~,de pre-j~t imee~ ember b ~ interest. Pbintjffs have not dmmmwuml~ mn mm~ma W'w-.iwllmm~ immmum ou~bis mmmrd. ram5 ~be Comm dmlb~m w -3- RESOLUTION NO. 200049 RESOLUTION DESIGNATING OFFICIAL DEPOSITORIES. BORROWING AUTHORITY, AND SAFE DEPOSIT ACCESS FOR THE CITY OF COLUMBIA HEIGHTS IT IS HEREBY RESOLVED, that Northeast State Bank and Norwest Bank are hereby designated as depositories of the funds of this corporation. IT IS FURT!tER RESOLVED, that loans, promissory notes, checks, drafts, or other withdrawal orders issued against the funds.of this corporation on deposit with said banks shall be signed by the following: Mayor City Manager Clerk-Treasurer and that said banks are hereby fully authorized to pay and charge to the account of this corporation any checks, drafts, or other withdrawal orders. BE IT FURTHER RESOLVED, that the Northeast State Bank and Norwest Bank as designated depositories of the corporation be and it is hereby requested, authorized and directed to honor checks, drafts or other orders for the payment of money drawn in this corporation's name, including those drawn to the individual order of any person or persons whose name or names appear thereon as signer or signers thereof, when bearing or purporting to bear the facsimile signatures of the following: Mayor City Manager Clerk-Treasurer and that Northeast State Bank and Norwest Bank shall be entitled to honor and to charge this corporation for all such checks, drafts or other orders, regardless of by whom or by what means the facsimile signature or signatures thereon may have been affixed thereto, if such facsimile signature or signatures resemble the facsimile specimens duly certified to or filed with the Banks by the City Clerk or other officer of his corporation. BE IT FURTHER RESOLVED, that the Northeast State Bank and Norwest Bank are hereby requested, authorized and directed to honor promissory notes or other evidence of indebtedness on behalf of the City when bearing the signature or facsimile signatures of the following: Mayor City Manager Clerk-Treasurer BE IT FURTHER RESOLVED, that any and all resolutions heretofore adopted by the City Council of the corporation and certified to as governing the operation of this corporation's account(s) with it, be and are hereby continued in full force and effect, except as the same may be supplemented or modified by the foregoing part of this resolution. BE IT FURTHER RESOLVED, that all transactions, if any relating to deposits, withdrawals, re-discounts and borrowings by or on behalf of this corporation with said banks prior to the adoption of this resolution be, and the same hereby are, in all things ratified, approved and confirmed. BE IT FURTHER RESOLVED, that any bank or savings and loan located in the State of Minnesota may be used as depositories for investments purposes so long as the investments comply with authorized investments as set forth in Minnesota Statutes. BE IT FURTHER RESOLVED, that any brokerage firm located in the State of Minnesota may be used as a depository for investment purposes so long as the investments comply with the authorized investments as set forth in Minnesota Statutes. BE IT FURTHER RESOLVED, that the signatures of any one of the following named City employees are required for access to safe deposit boxes: Finance Director City Manager Assistant Finance Director Accounting Coordinator Passed this day of ,2000 Offered by: Seconded by: Roll Call: Mayor Gary L. Peterson William Elrite, City Clerk 2