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r <br /> REQUEST FOR COUNCIL ACTION DATE: 11-084-93 pi <br /> ITEM No. : <br /> rtment Pp roval* Manager Reviewed: Agenda section: <br /> Reports and <br /> Recommendations <br /> M <br /> Item Descriptions Everest Group request for elimination of letter <br /> of credit requirements for the Rosedale <br /> Corporate Plaza project.0 <br /> Back round* <br /> 1. In 1986, the City entered into a development agreement with <br /> Everest Investments Iv relating to the Rosedale Corporate plaza <br /> project which was subsequently developed on the northwest <br /> corner 'f the intersection of County C and Long Lake Road. <br /> i The development agreement required that there be a total <br /> project value of $14 .4 million when the project was completed. <br /> In addition, a letter of credit constituting 5 of the total <br /> debt service was required as part of Everest's guarantee in the <br /> event that they did not perform and a short fall was <br /> experienced* This amount totalled approximately $500, 0000 <br /> 3 , The project was completed as planned and the project has met or <br /> exceeded all epectations4 <br /> 4 , <br /> In 1988, e developer th requested and received a reduction in <br /> the letter of credit to $250, 000a <br /> 5, The Everest Group has recently requested that the letter of <br /> credit be completely eliminated <br /> IM <br /> Staff Recommendation: <br /> 1 Community Development and Finance Department staff have <br /> reviewed the request and would recommend that the letter of <br /> credit requirement be el iminated o The prof ect ,is completer has <br /> remained fully leased for the last four years, long term <br /> permanent financing is in- place at favorabl a terms, and the <br /> development has met or exceeded requirements of the development <br /> .agreements In addition, the development agreement and an <br /> assessment agreement remain in place, which require a minimum <br /> •g � a off <br /> value be maintained to generate the required tapes top y <br /> the bonds, as well as a requirementL that the developer pick up <br /> an y short fall until the bonds are paid off. Therefore, City <br /> staff believes that the project will continue to perform and <br /> there would remain adequate protection t o cover any short falls <br /> if they occur in the future. <br />