Loading...
HomeMy WebLinkAboutIdaho Independent BankN O V - 5 1999 interoffice ~~~ ®~, ,;~~~~4~3~~~ M E M O R A N D U M To: Mayor Robert D. Come and City Council From: Wm. F. Gigray, III Subject: Idaho Independent Bank -Cherry ane Recreation, Inc. -City of Meridian Date: November 3, 1999 Mayor Corrie and Council: Please find attached a copy of the letter being sent to Edward Anson and R. John Insinger, pertaining to the above matter. Please note that this letter will supercede my previous memo dated November 1, 1999. If you have any questions please advise. Ms,efZ:\WorlcWl\Nleridian 15360M\CherryLane Land ExchangeWlayor110399.Mem WHITE, PETERSON, PRUSS, MORROW &GIGRAY, P.A. ATTORNEYS .AT LAW JUSTIN P. AYLSWORTH PHILIP A. PETERSON KATHY J. EDWARDS STEPHEN L. PRUSS JULIE KLEIN FISCHER ERIC $. ROSSMAN WM. F. GIGRAY, 111 TODD A. ROSSMAN D. SAMUEL JOHNSON R. STEPHEN RUTHERFORD WILLIAM A. MORROW DAVID M. SWARTLEY WILLIAM E NICHOLS" TERRENCE R. WHITE"' CHRISTOPHER $. NYE 200 EAST CARLTON AVENUE, SUITE 31 POST OFFICE BOX 1150 MERIDIAN, IDAHO 83680.1150 TEL (208) 288.2499 FAX (208) 288-2501 NAMPA OFFICE 104 NINTH AVENUE SOUTH POST OFFICE BOX 247 NAMPA, IDAHO 83653-0247 TEL (208) 466.9272 FAX (208) 466.4405 'ALSO ADMITTED IN OR ''ALSO ADMITTED IN WA Email via Internet r[u wt~~~awppm~~.com November 3, 1999 Edward J. Anson WITHERSPOON, KELLEY, DAVENPORT ~ TOOLE The Spokesman Review Building 608 Northwest Boulevard, Suite 401 Coeur D'Alene, Idaho 83814-2146 R. John Insinger RISCH, GOSS ~ INSINGER 407 West Jeffeson Street Boise, Idaho 83702 Re: Idaho Independent Banlc -Cherry Lane Recreation, Inc. - City of Meridian Dear NIr. Anson and Mr. Insinger: PLEASE REPLY TO MERIDIAN OFFICE The purpose of this letter is to follow up on a telephone conversation I had with Ed on the 28`h of October. I write this letter in the spirit of communication in an attempt to get the needs of all concerned reconciled, so that Cherry Lane Recreation, Inc., can proceed with its project. By wav of background, the Bank has requested the City to execute an agreement as a condition of the loan to Cherry Lane Recreation, Inc. with the Banlc, which agreement requires the City to give the Bank 30 days notice prior to taking anv action to enforce anv of the Citv's rights under the Lease, and 90 days prior notice to the effective date of anv modification of the agreement. The Council took that matter up at its regular meeting on the 19``' of October, and decided not to enter that agreement. The Council then called for a meeting with the Banlc, Cherry Lane Recreation, Inc. and the Council to try and iron this matter out. A meeting was tentatively scheduled for the 28`h of October but could not occur due to NIr. Insinger's schedule. Edward J. Anson November 3, 1999 Pale 2 I have concern that a meeting of such nature would be an open meeting, and without some structure could be counter productive to accomplishing the desires of all concerned. With that in mind, I have the Mayor's approval to communicate the concerns of the City with the purposes of determining if we can negotiate to resolve this favorably for all concerned. Concerns of t1~e City: 1. That the Lease Agreement could be encumbered up to $1,800,000.00, with no guarantee that the funds would go to, and for, capital improvements on the golf course. The City seeks to have the funds go directly for the issuance of the Letter of Credit in the amount of $500,000.00, and for the construction of the club house and related improvements required by the conditional use permit; and 2. In the event of default on the part of Cherry Lane Recreation, Inc., the golf course could end up in the hands of any successful bidding person or entity. The City would have no control over on who that would be; and 3. In the event of default, or at a time subsequent thereto, the golf course's maintenance could be impaired. During the summer season this could be disastrous to the golf course; and 4. The present Lease Agreement does not provide for minimum insurance coverage for casualty loss and/or for premises liability. I anticipate there may be commonality on many of these points. In order to give you some direction as to what the City would negotiate for as a condition of signing the agreement proposed by the Bank, and with the above concerns in mind, the City requests: An escrow arrangement be established in conjunction with the loan to Cherry Lane Recreation, Inc.; that the use of the funds loaned by the Banlc, pursuant to the Lease Hold Deed of Trust to Cherry Lane Edward J. Anson November 3, 1999 Page 3 Recreation, Inc., be restricted to the issuance of the Letter of Credit, and for the payment of design and constriction of the club house, and related capital improvements, as required in the Conditional Use Permit issued by the City Council in Case No. CUP-99-009, a copy of which is enclosed for your ease of reference. 2. The Lease Hold Deed of Trust, or a separate agreement, provide that the City be given the first option to purchase the security, at the amount then owed, plus costs and expenses of foreclosure incurred by the Banlc, in the event of an uncured default. 3. The agreement of the loan include provisions that in the event of default that the City would have the right, upon demand and notice to the Bank and Cherry Lane Recreation, Inc., to take such steps necessary to assure that the golf course is maintained to avoid the loss of fairway or greens for which the City would be reimbursed for reasonable costs incurred. 4. Cherry Lane Recreation, Inc., agrees to amend the Lease Agreement to provide, as a requirement, casualty loss insurance for a reasonable amount of coverage For the improvements, including sprinkler systems, golf course, club house, and parking facilities, and any and all other improvements thereon. The Lease Hold is to provide liability insurance in an amount not less than what is reasonable [given coverage for other 18 hole golf courses in the area], or upon advice of ICRNIP [the City's carrier] and in no event less than the amount provided for in the Tort Claim Law {I.C. ~ 6-926},or as it may be amended in the future. Insurance coverage should include the City as a co-insured. Edward J. Anson November 3. 1999 Page I encourage the two of you to discuss this matter and advise as to how you wish to proceed. I suggest, if there is general agreement, we could work out the language and the necessary agreements without the need of meeting, other than the Council meeting for approval. I await your response. Verv truly yours, ~~ m. . Gigray II Enclosures cc: Nlavor Robert D. Corrie Council msgiZ.\1ti'orlcWl\~~leridian 15360M\CherrvLane Land Exchange~Ansonlnsingerl 10199 Ltr JAME$ E, RFSCM DAVID D. GOBS R. JOHN iN31NGER W. JOHN THIEL MATTHEW J. GU STAVEL LAW OFFICES RISCH. GOSS & INSINGER •O7 WEST JEFFERSON STREET BOISE. IDAHO 83702 ` r~, `~.. \~r October 25, 1999 Mr. William F. Gigray III WHITE, PETERSON, PRUSS, MORROW & GIGRAY P.O. Box 247 Nampa, Idaho 83653 RE: Cherry Lane Recreatioq Inc. Deaz Mr. Gigray: TELEPHONE (2081 346 -9974 TELEFAX (2091 348-9982 This letter is written to confirm our telephone conversation of October 25, 1999. I informed you that John Insinger, attorney for Wally Lovan and Cherry Lane Recreation has been out of the office and is not due to return until Thursday or Friday of this week. We agreed that the issues between the City of Meridian and Cherry Lane Recreation would be removed from the agenda for Thursday night's meeting until such time as it can be rescheduled to allow for John Insinger's presence and participation in the meeting. I appreciate your extension of courtesy in this matter. In light of the foregoing, neither our client nor a representative from this office will attend the meeting currently scheduled for Thursday, October 26, 1999. You indicated you would have the secretary for the City contact Mr. Insinger on Friday, October 29, 1999 in order to reschedule the meeting. If this letter does not comport with your understanding of our conversatioq please contact me immediately. WJT:sh cc: Wally Lovan {~jt~~. '.j. ~ly?'~ i4 ,iayiiu`t:1 I'IJLh~UvvJvl!VJ-t'~UC~, RISC~I~ Goss & Ian.singer J,~s ~. atsc~ 4m w~sr .~~ax sear DASD D. GOSS ~~~ IDAHO ~~ ~ar~.~: (208} 345-9974 R. JOHN n~s~rrGEa w. Jo~x T~m~t ~ T'~~ + ~ AX ~,,TT,~W ~. GUSTAV~,i. ~zos} 3as-99s2 ~C SIIVII~ CO'~R SI~EE~ Page I of : 5 x:11/5/99 PI~+r~se daffier d~ faUow~rg,P To: ,wally Lovan 888-4022 ~hiee+: R. John Ins anger ,Re: GpNgZp~~~;CLlX.J17Y,N4TYCE: ?11ris atr~e a fsr 16c arm of dra ire~ir~daoT er to d i~ ®ed ia~ ~J~ ~e wot ~ ~ au e~oyae ar agent of lea ~~ ~ ii Ar dl~e o de mot mod, ir~es ~, ~' or a d~ swd da wot ~rrAoe one ogre ~e ~dimear erpae ~ !f for llama die Nnor, pia >xs b!- (QO~i~ert) ~ °"'°"rs,~or i~ ~rarr. We dv ~ :nhrd #b o~- a10v-reapk or pror6rraeprada>e ~7- ~ ~ of CoAU~ts: daaarear~ >re7~• t) F~by~ () Fo~ow gj- Fob Barp~es~ () Ba bawd d (x) Nat be o~ wend Zf~oelr~. WHITE, PETERSON, PRUSS, MORROW & CiIGRAY, P.A. ATTORNEY3 A7 I.AA )ustn+ v Anso~x Peuw w. P>:ra~ KwtNV I- $omu,cs 3rd L Pavas Jt~ Idnn P Fauc S. Aoas+nt~ v1111. ~ pgv,,~tr, ul Taoo w. taw D. Sw-aa Jaswsax E. Satfm~ BunnRVO~ aV1µ~.t PL Mo~oo~ D~r10 IM. ~nernty Mut1M1 P. Ntcaeoas• T» & otu~'• Owasioe~ s. NYa zoo ensT CAAl,TOP1 AVENUE, SUITE 3 t POST O~PP1C[ SDX 1150 MERIDIAN, IDAHO 83680-1150 TEL (i08) E86-2AT9 PAX (208) 288-2501 NAMPA OFFICE la tt1NTH Av10.1UR 90UTF1 rosy its eox u~ 23A61PA. apAHO 83653-02s7 Ta. (20p 4ee-vz~z PAX (208) 166.4105 use wo.at:sDleJ oa "ALSO A011k711D 81 ~A f.+mau! rya Inurna[ Q wfBQw'DPmB-com No~~embez 2, ~ 999 Edward J. Anson '~'vITHERSPOON, KELLEY, DAVENPORT St TOOLS The Spokesman Review Building 608 Northtivest Boulevard, Suite 40 ~ Coeur A'.A]ene, Naha 83814-2146 R. john insinger RISCH, GOSS s~ic.INSINGER 407 'West jeffeson Street Boise, Idaho 83702 Re: Idaho Ilrndependextt Bank -Cherry Lame Recreation, Xlrnc. - Cit}' of Mexidialn Deaz 141r. Anson and Mr. Insinger_ ri.PASB REPLY TD b1ERIDIAN OFFICE The purpose of this lettex is to follow up on a telephone conversation 1 had ~~~ith kd on the 28`~ of October. I write this letter in the spirit of communication in an attempt to get the needs of all concerned reconciled, so that Cherry lane Recreation, Inc., can proceed `vith its protect. By way of baekground, the Bank has requested the City to execute an agreement as a condition o£ the loan to Chexxy Lane Recreation, Inc. with the Bank, which agreement requires the City to Bite the Bank 34 days notice prior to taking any action to enforce any of the City's rights under the Lcase, and 94 days prior notice to the effective date of any modification of the agxeemenL The Council took that mattex up at its regular meeting on the 19`~ of October, and decided not to enter that agreement. The Council then called for a meeting r~th the Bank, Chen}' Lane Recreation, Inc. and the Council to try and iron this matter out. A meeting was tentatively scheduled for the 28`'` of October but could not occux due to Mx. Insinger's schedule. Pao. G ~9y~ 11 ;1Mh1 KI~~,;H,v~~S~~l~d~~i~,,tr: Edwazd J..Anson No~•embear 3, l 999 page 2 1 have concern that a z~neeting of such nature would be an open meeting, and without some stzuctuxe could be counter productive to accomplishing the desires of all concerned. With that in mind, I have the 1~~layor's approval to communicate the concerns of the City with the purposes of decermining if we can negotiate to resolve this fa~rorably for all concerned. Concerns of the City: 1. That the Lease Agreement could be cncuznbered up to $1,800,000.00, with no guazantee that the funds ~~vould go to, and for, capital improvements on the golf course. The City seeks to have the funds go duectly for the issuance of the Letter of Credit in the amount of $500,000.00, and for the construction of the club house and related improvements requixed by the conditional use pcrmit; and 2. In the event of default on the part of Cherry Lane Recreation, lnc., the golf course could end up in the hands of any successful bidding person or entity. The City would have no control over on who that would be; and 3. In the event of default, or at a tune subsequent thereto, the golf course's maintenance could be impaired. During tine summer season this could be disastrous to the golf course; and 4. The present Lease Agreement does not provide for minimum insurance coverage for casualty loss andlor for premises liabilit}'- I anticipate there may be commonality on many of these points. In order to giti~e you some direction as to what the City would negotiate for as a condition of signing the agreement proposed by the Bank, and with the above concerns in mind, the City requests: 1. An escrow arrangement be established in conjunction r~vith the loan to Cherry Lane Recreation, Inc_; that the use o£ the funds loaned by the Bank, pursuant to the Lease Hold Deed of Trust to Cherry' Lane Pd~.~ ~~• f'~yy II~„I~.h!i h;lJ'~h,'oUJJs1I'~J11'I'oC~ +:• ~" Edward 3. ,Ausox~ November 3, l 999 Page 3 Iictxeauon, Inc., be restricted to the issuance of the X,ettex of Credit, and for the payment of design and construction of the club house, and xelated capital improvements, as required in the Conditional Use Permit issued by the City Council, in Case No. CUP-99-009, a copy of which is enclosed for your ease of reference. 2. The Lease Hold Deed of Trust, or a separate agreement, provide that the City be given the first option to purchase the security, at the amount then owed, plus costs and expenses of foreclosuxe incurred. by the Bank, in the event of an uncuzed default. 3. 'The agreement of the loan include provisions chat in the event of default that the City ~'vould have the right, upon demand and notice to the Bank and Cherry Lane Recreation, Inc., to take such steps necessar}' to assure that the golf course is maintained to avoid the loss of fairway or greens for which the City would be reimbursed for reasonable costs incurred. 4. Cherry bane Recreation, Inc., agrees to amend the Lease Agreement to provide, as a requirement, casualt~~ loss insurance for a reasonable amount of coverage ;for the improvements, including sprinkler systems, golf course, club house, and parlang facilities, and any and all other impro~~ments thereon. The Lease Hold is to provide liability insurance in an amount not less than what is reasonable [given coverage for other I8 hole golf courses in the areaj, or upon advice of ICRA~iP [the City's carrier] and in no event less than the amount provided for in the Tort Claim Law {I.C. § 6-926},or as it may be amendod in the future. Insurance coverage should include the City as a co-insured. FJo~~ Edward J. Anson November 3,1999 page 4 I encourage the two of you to discuss this matter and advise as t~ how you wish to proceed. I suggest. if there is general agreement, we could work out the language and the necessary agreements without the need of meeting, other than the Council meeting for approval. X await your response. Enclosures cc: Mayor #tobert A. Cowie Council Very truly yours, w~. ~. ~ ay, m~g2;lWorktMWlerjdisn t 5360M4GtenYl~ne Land ~=os-~Isu~gerl 10199.Lu