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-4andw / 4r-m . <br /> tplto llq <br /> CEO#i' The following questions were submitted on behalf of <br /> 1K = individuals supporting Pinewood Golf Course in a letter <br /> ' iver dated May 17, 2014, by Peter Kimball. <br /> Litigation Questions <br /> 1) What litigation result is the City Council hoping to see? <br /> The city did not initiate litigation, the Krauses initiated the lawsuit. In April of 2013 and prior to the <br /> date of closing, the city proposed to the Krauses an Amendment to the Contract for Deed that <br /> reduced the final balloon payment from$15 million to$800,000. The$800,000 was still significantly <br /> in excess of the current fair market value of the property. The city cited as reasons for the <br /> modification, taxpayer financial losses for operations, substantial property value decrease from the <br /> economic recession,loss of the primary revenue stream from Park Dedication Fees to purchase the <br /> course,and market changes that have made operating many golf courses financially unsustainable. <br /> Instead of negotiating or discussing the request at all, the Krauses sued the city to compel the full <br /> payment. The judge agreed with the city's position that Minnesota law limits the Krauses'remedy in <br /> the event of nonpayment by a municipality to recovery of the property. Consistent with this law, the <br /> city has requested that the judge also dismiss the remaining damage claim which is scheduled for trial <br /> in September. Once the lawsuit is over, the city can make a final decision on the future of the golf <br /> course. No such decision has yet been made. <br /> 2) Why wasn't the community asked to help make the decision? <br /> City government is a representative democracy whereby eligible voters elect the City Council to make <br /> policy decisions on their behalf. <br /> There are a handful of situations,per Minnesota Statute,in which a City Council may hold a closed, <br /> nonpublic meeting. The situations include: 1)Labor negotiations,2)real estate transactions, 3) <br /> employee/employment discussions,and 4) meetings with the city's attorney to discuss pending <br /> lawsuits. <br /> Just like a private individual meeting with his or her own lawyer,the City Council has the right, and <br /> in fact an obligation, to discuss real estate transactions and pending litigation in private without the <br /> other side listening to the discussion so the city can be properly represented in the lawsuit. <br /> At the recommendation of its attorney,the City Council met in closed session to discuss the overall <br /> litigation and the impact of the continued operation of the golf course on the city's ability to <br /> successfully defend the lawsuit. The city's attorney stated that it could be detrimental to continue to <br /> operate the golf course while the matter was in the Courts and he recommended closing the golf <br /> course while the litigation is pending. <br /> Following this closed meeting,the matter was discussed at an open public meeting,with the <br /> consensus of the Council to direct staff to not reopen the course this year. <br /> 176706v2 <br />