08-10-09-TCAAP WS - Laserfiche WebLink

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ARDEN HILLS CITY COUNCIL TCAAP WORK SESSION-AUGUST 10, 2009 2 City Administrator Moorse reviewed additional information with the Council regarding the escrow agreement and asked that additional questions be directed to the City's Attorney. Mayor Harpstead commented on the addition to Section 23, Survivor of the PDA and asked if conversations were held with Ryan Companies regarding this issue. Attorney Steve Bubul explained he did speak with Ryan Companies but that he did not hear back from their in house lawyer. He indicated that the view in the past was that this did survive and if both parties were not able to resolve this informally the next step would be to go through mediation as described in Section 23 of the PDA. Mayor Harpstead questioned if the information provided was sufficient for this item to come before the Council on a future agenda. Councilmember Holmes asked that Attorney Filla review his letter dated July 24, 2009 regarding the escrow agreement. Attorney Jerry Filla reviewed the letter in detail with the Council describing the consequence of terminating the PDA. (He explained the PDA anticipated that additional steps would be needed if the developer's agreement were terminated.) Attorney Filla stated that in his opinion, based on the documents, Ryan Companies should receive the earnest money and the two parties were to work out the reimbursable costs separately. He indicated a neutral party could hang onto the disputed amount of the reimbursable costs, which directed the funds elsewhere pursuant to the terms of the escrow agreement until the City and Ryan Companies have reached an agreement. Attorney Filla clarified a paragraph within the letter noting that on Page 2, the second to last paragraph, he explained that Section 23 does not survive unless the parties specifically agree to do that. He noted that the party's next step would be to go through a non-binding mediation process or to court. Attorney Filla felt the City's exposure was that the PDA says if Ryan Companies has to commence litigation or incur cost to collect the earnest money held by the City. The costs associated could be the responsibility of the City, which was the reason to enter into an escrow agreement.