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• The South Bend Redevelopment Authority <br />May 3, 2006 Meeting Minutes <br />pipeline that is under his proposed driveway because Marathon will not commit to <br />replacing its improvements. The City has asked the developer to pay half of the <br />cost of the inspection. The second request for Marathon is to be more cooperative <br />and to agree to better language with the developer as far as the possibility of <br />destroying his improvements. Marathon has stated their desire to be able to move, <br />destroy, and perhaps put things back the way they were. Mr. Alvarez asked if the <br />developer has shown signs of weakening on its desire to build the hotel. Mr. <br />Peterson said the developer has said this issue with Marathon needs to be settled <br />or he will not build the hotel. He has waited a long time. <br />Mr. Alvarez asked if there is an eminent domain component to this, and Ms. <br />Greene said perhaps the civil city could be involved because. this is a utility. Mr. <br />Peterson cautioned that could cause a very expensive lawsuit. <br />Ms. Pfotenhauer asked if the additional easement could only be used by Marathon <br />for maintenance or to move the pipeline within the easement and Mr. Peterson <br />said that was correct. Ms. Pfotenhauer asked for a summary of the downside for <br />the City. Mr. Peterson said the only possibility would be if Marathon put in a new <br />pipeline with a very intrusive means that would damage the golf course. The <br />liability related to that would be around $350,000. at this point. Weighing that risk <br />• with the investment of a $17 millionhotel is a good risk. It is not certain who <br />would pay the $350,000. if that happened, and the worse case would be that the <br />City would have to pay it. Mi•. Alvarez asked about the attorney agreeing to terms <br />and then changing her mind after some time, but Mr. Peterson said she is not <br />inside counsel so she can't set policy. <br />Mr. Peterson said the Resolution before the Authority is to approve the settlement <br />agreement with Marathon to release the City from liability on Lot 1B and 1C for <br />the driveway, the Blue Heron site, and granting Marathon an easement to relocate <br />the pipeline and the additional 20' of easement through out the golf course. That <br />additiona120' easement will not allow Marathon to cut any trees. Also, any <br />golfing items within that 20' easement are not considered encroachments. The <br />easement and license agreement are intended to further improve Lot 3A. The City <br />will not give Marathon any other concessions until it agrees to our requests. If the <br />developer chooses not to construct the hotel, then the City will stop negotiations <br />with Marathon because it would be very doubtful that we could ever come to an <br />agreement with Marathon on any project if it won't agree with this one. This <br />developer has waited many years for a resolution of the conflict. <br />Ms. Pfotenhauer wondered if Marathon was aware of this problem, and Ms. <br />Greene said the local people are aware of it, but we have been unable to go <br />beyond the local people to the next level. Ms. Greene said we are working from a <br />difficult position since we allowed the first driveway to go across the existing <br />6 <br />H:IWPDATAW UTHORTY\050306.MIN.DOC <br />