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The second issue which Mr. Fitzgerald would like to discuss with the City <br />Council is the addition of the "right of first refusal" if the city were to ever <br />dispose of the Lions Park property (Page 15, Item 11.1). Currently the lease <br />does not allow for the Boys and Girls Club to have the right of first refusal if <br />the property is sold as this type of provision may very well restrict a future <br />City Council and any policy decisions they may want to make regarding park <br />management and ownership. Additionally, regardless ff the park is sold by <br />the city, the existing lease would still be valid and would not impact the Boys <br />and Girls Club use of the property. The future is unknown and there may be <br />some better way of park management in existence in 10,20, or 30 years, and <br />we may not want to restrict a future City Council by having the right of first <br />refusal included in this lease. <br /> <br />By far, the most important lease issue for the City Council to consider relates <br />to the concern that exists over the "worst case scenario" and, for whatever <br />reason, the Boys and Girls Club doesn't survive in Elk River. First of all, ff <br />the Boys and Girls Club can't make their loan payments, the city doesn't <br />want to be the one that closes them down. Additionally, ff the Club doesn't <br />survive, then there is a building remaining in a city park which has bank <br />loans due. The current draft lease tries to not have the city subordinate to <br />the bank agreement and to have the city operate independent of a bank <br />agreement whereby it would be the city's option to take over the Boys and <br />Girls Club obligations. If the banks are going to ask the city to take over the <br />note and mortgage in the event of mortgage default, then very close attention <br />should be paid to Exhibit D which is the mortgage agreement terms and <br />conditions. <br /> <br />The draft lease is in pretty good shape and only a few issues are still under <br />debate. These issues need City Council decisions and then the lease can be <br />finalized assuming that all of the other narrative and terms and conditions in <br />the lease meet with the City Council's approval. <br /> <br /> <br />