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Rick JO ke Page Two <br /> October 208 199 3 <br /> b) All obligations of the Development A*eement have been <br /> met and iin many cases, exceeded. The minimum <br /> improvements were built ahead'-of schedule and assessed <br /> valuations have- exceeded the minimums required. <br /> Therefore, excess tax increment has been generated over <br /> the minimums set forth in 'the Development Agreements <br /> h <br /> c) Long term permanent financing was placed on the project <br /> at favorable terms. As the mortgage is held subject to <br /> the terms of the Development Agreement, it would be the <br /> obligation of the lender to pay' real estate taxes if <br /> the owner failed to do so,. As the lender has a <br /> sizeable investment in the project, it is unlikely that <br /> it would permit the real estate taxes to remain unpaid. , <br /> Under these conditions, the City is well insulated from an <br /> event of ncn-payment of areal estate taxes* In order four• the <br /> City to be exposed to such an incident, the following events <br /> would have to occur: <br /> a) The tenants would have to default on their lease <br /> obligations and fail to pay the real estate taxes. <br /> This is an extremely remote event given the <br /> creditworthy mature of the tenants in the project,. <br /> b) The owner would them have to fail in payment of the <br /> real estate tares which would jeopardize his <br /> significant investment in the project and invite a <br /> legal collection effort under the personal guaranty <br /> issued to the City covering this issue. <br /> c) The lender would have to refuse to pay the real estate <br /> taxes in the event the tenants and owner did not pay <br /> and jeopardize its investment in the project. <br /> ,m <br /> Considering the chain of events which would have to occur <br /> before the City would he at risk, it is safe to say the <br /> event of risk of nonpayment is so remote that it has been <br /> virtually eliminated. <br /> As there is no longer any practical risk of nonpayment of <br /> taxes, we request the City of Roseville waive the letter of <br /> credit requirement set forth in the Development Agreement <br /> for Rosedale Corporate Plazas In addition to eliminating <br /> the cost of maintaining the letter of credit, elimination of <br /> this requirement also frees up the ownerls ability to borrow <br /> funds necessary to recruit new tenants to Roseville and <br /> retrofit existing space in the project to accommodate a <br /> tenantfs needs. <br />