pf_00504 - Laserfiche WebLink

Home

� r� r�a� i�, y9i0 Hanorable Mayor and Village Council Va 11 age of Rosevi 11 e Roseville, Minnesota Re: The Pal�sades Specia� Use Permit G�nt�emen: First of ali I wish to offer my company's apologies to the Vi 11 age of Rosevi 11 e for the del ay � ncurred i r, the �eve�i opment of the subject project. As you can appr�ciate it is nc►t our companys polic:y to purchase land as expensive as the P��lisades site and just sit on �t. Theref�r�, I feal as a matter of common courtes.y it is necessary to bring the Village Council completely up to date as to the status of th� Palisades. As you are undoubtedly aware we received the special use permit for the Pal�sades on May 26, 1969. At that time we were fully prepared to commence financing of the project. We then prepared a formal application to a large insurance company under our normal method of project financing which was readily acc�pted by the insurance company for processing. Normally such processing requires about 45 days to letter of commitment. Wh�n by the first of August w� sti�l did not have an answer we pressed the company for action and was informed by the company t{ia�c because of ti ght money rondi ti or�s they whe re no langer an the market for apartment financing. At this time the tight money market wa5 bPginning to accelerate not only �n interest rates but in increased forms of par�icipatian by the �enders. Therefore; for this rea�ori and for the fact that historically ir,vestment money always lo�sens up in the fall, we decided to delay financing searches until late September of 1969, in the hope of finding a more reasonab�e financing climate. After many exploratory probes into the market p?ace, we were astounded by �ncreased demands for interest yields (up to 11°ro interest) and for par�ticipation (up to 50% of �the equity). The reason for such unreasonable terms was obvious: For as the administration tightened the nations monetary palicy the money supply shrunk and with the demand rem�ining high the la�v of supply and demand dictated a lenders' market so �hat thase ;�!i th money to lend could c+emand a] 1 that thei r cons�cience could bear. As a consequence we could not see anyway t6�e pr�jer.t would be ec�onornically feasible in that it would justify a decent return on equity inve,ted.