RES 11-59CITY OF OTSEGO
WRIGHT COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2011- 59
RESOLUTION AUTHORIZING DRAW ON LETTER OF CREDIT ISSUED BY
21sT CENTURY BANK ON BEHALF OF APPELLO GROUP LLC REGARDING
THE PLAT OF GREAT RIVER CENTRE OF OTSEGO
WHEREAS, 21" Century Bank has issued a Letter of Credit in the current amount of
$300,000.00 to secure obligations of Appello Group, LLC (APPELLO) relevant to the
Developers Agreement and addendums between APPELLO and the City of Otsego
(CITY) for that development known as GREAT RIVER CENTRE OF OTSEGO and
subsequent Plats; and
WHEREAS, said Letter of Credit is due to expire on November 30, 2011; and
WHEREAS, certain public improvements required by the Developer's Agreement
between the CITY and APPELLO remain unfinished; and
WHEREAS, APPELLO has failed to timely pay assessments on the property made as a
result of improvements to County Road 42 as originally petitioned for by APPELLO and
agreed to in the original Developers Agreement; and
WHEREAS, CITY has determined that it is crucial that funds be drawn at this time to
either complete the required final road improvements, or to make payments on the
delinquent special assessments in order to assure prompt payment of City bond debt
service issued for the County Road 42 improvements; and
WHEREAS, the Developers Agreement and amendments thereto require that a Letter of
Credit remain in place at all times to cover payment of assessments as they become due
and assure completion of all required public improvements and warranty periods; and
WHEREAS, APPELLO was allowed under a separate agreement to have these repairs
completed by June of 2012 subject to a continuing Letter of Credit being issued; and
WHEREAS, the CITY needs to draw the available funds prior to expiration of the
current Letter of Credit in order to proceed with a public improvement project, or to pay
down the amount of outstanding delinquent special assessments, the funds to be applied
at the discretion of the CITY.
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Otsego,
Wright County, Minnesota as follows:
1. City staff are hereby directed to draw the full amount of the Letter of Credit
($300,000.00) issued by 21St Century Bank on behalf of APPELLO, prior to its
expiration date.
2. The money received from that draw as well as any other available funds held by
the CITY, is to be used to complete required public improvements within the Plat
of GREAT RIVER CENTRE OF OTSEGO unfinished by APPELLO, or to pay
down outstanding delinquent special assessments owed by APPELLO as
determined by the CITY at its sole discretion.
3. City staff are also directed to notify APPELLO of its ongoing obligation to have
in place a Letter of Credit in the amount of $300,000.00 at all times until
APPELLO has fully complied with all terms and conditions of the Developer's
Agreement between CITY and APPELLO.
4. By drawing on the current Letter of Credit the CITY waives no rights under its
Agreements with APPELLO, and specifically reserves any and all rights
conferred by those Agreements or otherwise.
ADOPTED this 14th day of November, 2011 by the Otsego City Council.
MOTION made by Council Member HEIDNER
Council Member SCHARBER
and SECONDED by
IN FAVOR: MAYOR STOCKAMP; COUNCILMEMBERS: HEIDNER, SCHARBER, DARKENWALD AND
SCHROEDER
OPPOSED: NONE
2
CITY OF OTSEGO
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Jessica Stockamp, Mayor
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Tami Loff, City Clerk