[Mpls] Excerpts from the Contract and the Deed - Elroy Site

[David Brauer]

The contract provisions Barb cites show the obvious: that Basim must 
renegotiate the deal if he wants to build housing.

However - and more critically for deciding what to do now - I think the 
city is still trapped in a Basim-with-industrial or 
Basim-with-industrial-and-housing choice.

Let's take the contract provisions Barb cited singly:

WHEREAS, on March 16, 2001 the Board authorized the
Agency to enter into this Agreement to convey the
Property to the Developer for development of a 64,000
sq. foot mixed use commercial, office and light
industrial facility on the Property;

[DB} A key provision, since the housing plan cuts the industrial space 
below 64,000. However, if Sabri goes ahead and builds without the 
condos, he will fulfill this obligation, so the contract's in force. 
His preferred Plan B is condos, which requires renegotiation,  but if 
he doesn't get what he wants, he still controls the land through Plan 
A.

pg. 5 Article II Representations, Section 2.02,
Representations of the Developer,
(b) There are no pending or threatened legal
proceedings, of which the Developer has notice,
contemplating the liquidation or dissolution of the
Developer or threatening its existence, or seeking to
restrain or enjoin the transactions contemplated by
the Agreement, or questioning the authority of the
Developer to execute and deliver this Agreement or the
validity of this Agreement.

[DB] Despite Sabri's bribery trial, it's doubtful this provision 
cancels the contract. Why? 2 reasons.

[DB] First, the whole idea of corporations is to shield owners from 
personal liability; conversely, if the person goes down, the 
corporation typically continues. Sabri the Development Corporation 
likely won't be dissolved by a bribery trial, so there's probably 
nothing hopeful here for his foes.

[DB] Also, this provision was negotiated with charges hanging over his 
head. There's no way the parties agree to this provision if it 
terminates the deal.

pg. 10 Article V Construction of Improvements;
Certificate of Completion, Section 5.01, Construction
of Improvements. In the event closing occurs and
subject to the terms and conditions herein, the
Developer will construct the Minimum Improvements on
the Property in substantial conformance with the
approved Construction Plans. (This is the piece some
on the council used to make the point that the
developer was fulfilling the terms of this contract)

[DB] This reconfirms that housing is not allowed by the Contract. But 
again, we already know that. Basim has to renegotiate for that. But if 
the renegotiations fail, nothing quoted prohibits him from Plan A, the 
light-industrial design.

pg. 24 Article XI Additional Provisions, Section
11.02, Restrictions on use. The Developer agrees to
devote the Property to, and only to and in accordance
with, the uses specified in the Redevelopment Plan,
the Deed, and this Agreement and shall not unlawfully
discriminate upon the basis of race, color, creed,
sex, or national origin in the sale, lease, or rental,
or in the use or occupancy of the Property or any
improvements erected or to be erected thereon, or any
part thereof. Upon request by the Developer, the
Agency shall deliver a written certification of
Developer's compliance with the Redevelopment Plan or
a statement specifying the basis of the Developers
non-compliance.

[DB] I think Barb and others have a point here: Sabri won't be able to 
restrict ownership to Somalis. But I'm sure he's willing to build the 
housing anyway, and my guess is mostly Somalis will live there.

Section 2: In the event the Purchaser herein shall,
prior to the recording of the Certificate of
Completion:

a) default in or violate its obligations with respect
to the construction of the improvements (including the
nature and date for the completion thereof) provided
for in this Deed and the Agreement, or shall abandon
or substantially suspend construction work and any
default of violation, abandonment or suspension shall
not be cured, ended or remedied within 60 days after
written demand by the Seller so to do;
then the seller shall have the right to re-enter and
take possession of the property and to terminate and
revest in the Seller the estate conveyed by this Deed
to the Purchaser, its assigns or successors in
interest. Such reversion of the title shall, however,
be subject to the lien of any outstanding mortgage
authorized by the Agreement.

[DB] Anything here indicate asking for an additional use constitutes 
abandonment? Has such a request resulted in "substantial suspension of 
construction work?"

[DB] Again, I don't support Sabri or the project  necessarily. But I 
still don't see evidence that Sabri has violated the original contract, 
meaning he still controls the site if he's willing to build without 
housing. If that's the case, you have to decide which configuration you 
prefer - with him at the helm.

Of course, those with policy disagreements should make their feelings 
known at the polls and elsewhere. I, too, am scratching my head at the 
city's low price. However, I still don't see the legal case for booting 
Sabri from the property, even if it was a bad deal with the personage 
involved.

David Brauer
Kingfield