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<br />JOHN E. MAC GIBBON
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<br />ATTORNEY AT LAW
<br />321 LOWELL'
<br />ELK RIVER, MINNESOTA 55330
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<br />TELEPHONE 441-1 383 AREA CODE 612
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<br />November 3, 1994
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<br />Anthony J. Gleekel
<br />Siegel~ Brill, Greupner & Duffy, P.A.
<br />1300 Washington Square/
<br />100 Washington Avenue South
<br />Minneapolis, MN 55401
<br />
<br />Re: Associated Developers of the Twin Cities, Inc. -
<br />Purchase of Elk River Property from Earl and Lorraine Hohlen
<br />
<br />Dear Mr. Gleekel:
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<br />My clients, Earl Hohlen and Lorraine Hohlen, 'have now had an opportunity to
<br />review at length the terms and provi~i~~ of the proposed purchase agreement
<br />submitted under the date of(feptember' 30~ 19~ in behplf of the Associated
<br />Developers of the Twin Cities, Inc. Addressing the most serious problem first,
<br />the Hohlens disagree with the ~roposed purchase pric~Initially they had
<br />hoped to realize approximately ,Five Million Dollars from the safe of the tract
<br />which consists of approximately~ ~cre~of land under consider?tion by the
<br />purchasers. The method of determin~ng the price in the~~inal option
<br />agreement, specifically=w1.25 per square foot with the Hohlens op~ort~nity
<br />to participate in .one-third of any excess' baseTOn final sales by'"the"'-'~'''
<br />de~elopers, but not less than .36 per square foot, approximated the Hohlens
<br />(.e;tp'e~ct~svas to price. lrdlizing the,f,c;>rmu~a ,e.~~p,9,,~~d in the purchase
<br />agreement, the Hohlen' s \ expectan'cy) woula be reduced to around Two Milli~
<br />Dollars or less~ for the sale of -file ~ tract. The Hohlens ~ believe
<br />in their original assessment of the tract's value and at this point are
<br />unwilling~o make any substantial reduction in..that expectancy.
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<br />Hohlens are also concerned that the e~uation to determine price has factored
<br />into it the~em of wetland. White it is true there 'is a limitation on
<br />the amount of wetland the purchaser would be-required to accept, there is
<br />no~ar~b.~~limitation _protectIng the Hohlens. ~rguablr, the wetland area
<br />-or t e su j ect land is no~ present),y known and coul~ sfgnific.?;tttly ~~~J:,g~~~e
<br />th~ total area of the land w~th a c.?l!e~20n4ing E~~uf~t~n in the purchase
<br />pr~ce.
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<br />Hohlens are not in agreement with the City and other MuniCipalities or
<br />. Governmental~dies that have already.aesignat~certain wetland ~r ~e
<br />. threatening to do so. The redUcti~n of. lana-value because of wetland, however,
<br />WIIIalso'~mpad:-upoii the revenue~-produced byad valorem taxation. The Hohlens
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<br />need to know with reasonable ceriai'rity'the amount of wetland contained in
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<br />tne tract. --......q.,-".. - .,
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<br />Hohlens also object to the provision that would require them to clo~e the
<br />present 'mobile home park, accordingto statutory procedures, ilUJ_~ certain
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