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BROOKSTONE,INC. <br /> FEB 5 200 <br /> 7400 Metro Blvd.,Suite 212 <br /> Edina,Minnesota 55439 <br /> February 24, 2003 612.837.9167 phone <br /> 612.837.8010 fax <br /> Ms. Cathy Mehelich <br /> Director of Economic Development <br /> City of Elk River <br /> 13065 Orono Parkway <br /> Elk River, MN 55330 <br /> Dear Cathy, <br /> We appreciate the opportunity to have attended the Joint Planning Commission/City <br /> Council/Economic Development Authority meeting of the City of Elk River on <br /> February 11, 2003.From that discussion we felt that it was important to write a letter <br /> to clarify our position with regard to the Elk River Business Park and to seek ways in <br /> which we can work together collaboratively to meet our mutual goals. <br /> • There is some background that I think would be helpful. First, I believe that we <br /> essentially inherited the business park zoning and were supportive of that. All of the <br /> negotiations and related correspondence prior to entering into the development <br /> agreement referred to "industrial"type buildings. Our preliminary master plan <br /> incorporated a number of industrial type buildings. We were encouraged by the <br /> business park zoning, in that it allowed broad based industrial and some of the quasi- <br /> commercial uses that we feel are very customary and appropriate for this kind of <br /> business setting. <br /> Secondly, over the past two years we have marketed extensively, utilizing the listing <br /> agents for the property, the efforts of Kevin Maas, Director of Marketing for Amcon <br /> Corporation, and by working with you and prospects that are generated through your <br /> activity. The results have been disappointingly limited. At this point we have <br /> completed four lease transactions and are currently 70% leased and occupied in the <br /> multi-tenant building and have not inked any land sales or build to suit transactions. <br /> However, clearly the economy is a big factor in this. <br /> With this background I would like to respond on a number of items discussed on <br /> February 11: <br /> 1) While our plan shows large lots, we have indicated a willingness to subdivide <br /> down to 1.5 to 2.0 acre lots and have established a price for some time now at <br /> S $1.25 per square foot. We do not feel that this is overpricing, as was <br /> suggested by some members of the discussion on February 11. However, we <br /> REAL ESTATE ADVISORY SERVICES,INVESTMENT AND DEVELOPMENT <br />