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� <br /> OFFICE <br /> ATTORNEYS AT LAW <br /> 30849 FIRST STREET <br /> PAUL J.SANDELIN PO.Box 298 TELEPHONE(218)568-8481 <br /> STACY M.JOHNSON PEQUOT LAKES,MINNESOTA 56472 FAX(218)568-8444 <br /> www.lakesarealaw.com <br /> January 29, 2008 <br /> VIA EMAIL <br /> City of Pequot Lakes <br /> Attn: Sandy Peine <br /> 4638 County Road 11 <br /> Pequot Lakes, MN 56472 <br /> Re: Trailside Estates Plat Development Agreement/Bond <br /> Our File No. 25000.047 <br /> �.• Dear Sandy: <br /> I reviewed the letter from Mr. Smith dated January 22, 2008 along with the Development <br /> Agreement and the Bond for the project in addition to the City's letter to Mr. Smith dated January <br /> 11, 2008. As I understand it Mr. Smith has been requested to pay the expenses incurred by the <br /> City on this project in the amount of$11,764.38 and his January 22, 2008 letter indicates that he <br /> is not in a position to reimburse the City at this point. According to the Development Agreement <br /> Mr. Smith is required to reimburse the City and there does not appear to be a dispute over the <br /> contractual obligation to reimburse the City. As a result Mr. Smith is in default under the <br /> Development Agreement. <br /> Given the existence of a default, I have been asked to outline the options for the City. Initially I <br /> would recommend that we send a formal notice of default under the Development Agreement. <br /> Assuming the default is not cured the City would have the following options under the <br /> Development Agreement: <br /> 1. Require that any further work on the project cease. <br /> 2. Refuse to issue any further land use permits for the project. <br /> 3. Record with the County Recorder a Notice of Adverse Claim for the amount of the <br /> default. <br /> 4. Notify the bonding company that the maintenance bond is not the appropriate bond to be <br /> issued pursuant to the Development Agreement and require the reissuance of a <br /> performance bond. <br />