2011-11-22 City Council minutes-Special MtgMendota Heights City Council
CITY OF MENDOTA HEIGHTS
DAKOTA COUNTY
STATE OF MINNESOTA
Minutes of the Closed Session and Special Meeting
Held Tuesday, November 22, 2011
November 22, 2011
Page 1
Pursuant to due call and notice thereof, the closed session and special meeting of the City Council, City
of Mendota Heights, Minnesota was held at 5:30 p.m. at City Hall, 1101 Victoria Curve, Mendota
Heights, Minnesota.
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Mayor Krebsbach called the meeting to order at 6:30 p.m. The following members were present:
Councilmembers Duggan, Povolny, Petschel and Vitelli.
ACKNOWLEDGEMENT OF CLOSED SESSON
HELD NOVEMBER 22, 2011 AT 5:30 P.M.
Mayor Krebsbach acknowledged the closed session held. on November 22, 2011 at 5:30 p.m. to discuss
the Settlement Agreement and Release and the 4t' Amendment to the Planned Unit Development
between the City of Mendota Heights and Mendota Mall Associates, LLC.
Present at the closed session were Mayor Sandra Krebsbach, Council Members Ultan Duggan, Mike
Povolny, Liz Petschel and Jack Vitelli, City Attorney Tami Diehm, Attorney Robert Alsop, Interim City
Administrator John Mazzitello and Assistant to the City Administrator Jake Sedlacek.
AGENDA ADOPTION
Mayor Krebsbach presented the agenda for adoption. Councilmember Vitelli moved for the removal of
Council Comments from the agenda.
Councilmember Povolny seconded the motion.
Ayes: 5
Nays: 0
UNFINISHED AND NEW BUSINESS
A) ADOPTION OF "RESOLUTION APPROVING A SETTLEMENT
AGREEMENT AND RELEASE AS WELL AS THE 4TH AMENDMENT
TO THE PLANNED UNIT DEVELOPMENT AGREEMENT
BETWEEN THE CITY OF MENDOTA HEIGHTS
AND MENDOTA MALL ASSOCIATES, LLC"
Mayor Krebsbach explained that this special session is in regard to a Settlement Agreement and a
Planned Unit Development amendment previously in mediation between Mendota Mall Associates, LLC
and the City of Mendota Heights. Mayor Krebsbach recognized Attorney Robert Alsop to walk through
the settlement and the resolution, and explained the city would then take action on both.
Mendota Heights City Council November 22, 2011
Page 2
Attorney Robert Alsop of Kennedy & Graven of Minneapolis explained that he was retained to defend
the City in pending litigation with Mendota Mall Associates, LLP. This action was commenced in May
of 2011 and is a claim for breach of contract against the City by Mendota Mall alleging that the City has
breached various obligations under the PUD agreement executed in 2009. Specifically the plaintiffs
have claimed that the relocation of a sanitary sewer trunk line on Lot 6 was an obligation of the City at
their sole expense. They were seeking declaratory judgment against the City requiring the City to
relocate that line at its sole expense and such damages as a result of the breach of that obligation. The
City denied the allegations asserted in the complaint and asserted various formative defenses to the case.
Extensive discovery was completed over the summer and the matter was scheduled to go to trial in
January of 2012. A court ordered mediation was conducted in November 2011, the City participated in
that mediation, and as a result a tentative settlement has come out of that mediation.
The mediation was presided over by former retired Judge Myron Greenberg. On behalf of the Council;
Councilmember Povolny participated as well as Councilmember Vitelli. City Attorney Tammy Diehm,
Attorney Robert Alsop, and Acting City Administrator John Mazzitello also attended.
During the course of the mediation, a negotiated settlement was reached, which will be presented to the
Council. Some of the significant provisions of the settlement agreement include the following:
• The housing that was contemplated for Lot 6 is going to be reduced in size from a four -story housing
facility down to a one -story housing facility to better integrate the housing into the overall
development
• The housing facility is also going to be relocated by agreement of Mendota Mall off the sanitary
sewer trunk line, which 1) avoids a significant expense on behalf of either party, no matter who was
responsible for that obligation and 2) it maintains the integrity of the sewer line for the City
• As part of this settlement, there is a cash payment to be made to Mendota Mall as part of the
settlement for purposes of helping redesign the development as well as providing some
compensation for the reduced value of the lot with the sanitary sewer trunk being across the property
• There are some minor amendments to the PUD agreement that are also incorporated and were
requested by Mendota Mall
One particular amendment was that the deadline for completion of the project was extended due to
economic and market conditions. That was agreed upon or suggested by the parties as well.
The agreement was reduced to a writing and signed by the parties in attendance at the mediation. As
always, the agreement is subject to council approval as a whole.
What is before the council is a resolution outlining some history of the case and how the settlement was
reached, as well as requested approval of the Settlement Agreement. The Settlement Agreement was
attached to the resolution as Exhibit 1. Attached to the Settlement Agreement is the proposed 4th
Amendment to the PUD Agreement. That 4th Amendment, if the settlement is approved, will be
executed by the City and recorded against the property and become a binding obligation of the parties
with regards to this PUD.
Mendota Heights City Council November 22, 2011
Page 3
As there have been some minor changes made to the resolution, Attorney Alsop asked City Attorney
Tami Diehm to recite the resolution.
Mayor Krebsbach reiterated that the action to be taken by the council this evening will be voting on the
resolution, which has the Settlement Agreement attached. The Settlement Agreement was agreed upon
in mediation therefore there is no room for council to make any changes, additions, or corrections. The
council had an opportunity to review the resolution and the attached settlement and amendment that they
would be voting on this evening.
City Attorney Diehm read for the record the language in the resolution that council would be
considering this evening.
Mayor Krebsbach stated that the council did have an opportunity to make comments at their review of
the resolution in the closed session.
Councilmember Vitelli moved approval of a "Resolution Approving a Settlement Agreement and
Release as well as the 0' Amendment to the Planned Unit Development Agreement between the City of
Mendota Heights and Mendota Mall Associates, LLC"
Councilmember Povolny seconded the motion.
Ayes: 5
Nays: 0
Councilmember Vitelli moved to adjourn the special meeting.
Councilmember Duggan.
Ayes: 5
Nays: 0
Mayor Krebsbach adjourned the meeting at 6:46 p.m.
Krebsbach
MWU ,
Sandie Thone
City Clerk
The motion was seconded by