10-14CITY OF OTSEGO
WRIGHT COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 2010-14
RESOLUTION AUTHORIZING DRAW ON LETTER OF CREDIT ISSUED BY
211T CENTURY BANK ON BEHALF OF APPELLO GROUP LLC REGARDING
THE PLAT OF GREAT RIVER CENTRE OF OTSEGO
WHEREAS, the 21St 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
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, CITY has determined that it is crucial that these items be completed at this
time, especially final road improvements, so as to alleviate deteriorating conditions of the
road as it remains uncompleted; 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 required under a separate agreement to have these repairs
completed by June 1, 2010 which they have failed to do; and
WHEREAS, the City Engineer's estimate for needed immediate road improvements
within the Plat substantially exceeds the $125,000.00 held in escrow by the separate
Agreement referenced above for completion of the road and other public improvements;
and
WHEREAS, the CITY needs to draw the available funds at this time in order to proceed
to order the improvements as a public improvement project for completion this year.
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 immediately draw the full amount of the Letter of
Credit ($300,000.00) issued by 21" Century Bank on behalf of APPELLO.
2. The money received from the draw, as well as escrow money to be separately
drawn, are to be used to complete required public improvements within the Plat of
GREAT RIVER CENTRE OF OTSEGO unfinished by APPELLO.
3. City staff are further 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 June, 2010 by the Otsego City Council.
IN FAVOR: MAYOR STOCKAMP; CM SCHARBER: CM DARKENWALD AND CM HEIDNER
OPPOSED: NONE
CITY OF OTSEGO
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T Loff, City Clerk
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