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<br />Summary Minutes: Special City Commission Meeting February 8, 2008 <br /> <br />Mr. Calloway said the other thing that they tried to do in this case is to look at not just the <br />Ci ty' s best case scenario, in our case a trial would be $3.75 Million, that is our best case, he <br />feels good about it but at the same time he cannot make any guarantees that you will reach <br />that number, juries do unpredictable things. He said it is not unreasonable if a jury came back <br />after a 7 -9day trial and decided that they believe the property was worth $6-7 Million Dollars, <br />but he would be really surprised if they came back and said the property was worth $ 1 2 <br />Million as the property Owner suggests. <br /> <br />City of Sunny Isles Beach, Florida <br /> <br />Mr. Calloway said that his recommendation that the City is being reasonable in a settlement at <br />this amount. He said this is an offer by the property owner to accept $7 Million as an all- <br />inclusive settlement, the property Owner has incurred tremendous costs in this case but it is <br />not the City's responsibility at this point. He said the second most important thing he wants <br />the Commission to take from this in addition to the fact that a $7 Million Dollar settlement is <br />reasonable, is that prejudgment interest has accrued since 2005. He said that prejudgment <br />interest is the amount of interest that you will have to pay to a property owner that essentially <br />makes the property owner whole in terms of the value of the property that was taken from <br />him. We essentially deposited in April, $2.25 Million Dollars as our good faith estimate of <br />the value of Parcel l. If you assume that we have agreed to settle the case and have <br />established a value for Parcel I at something more than the $2.25 Million Dollars, the interest <br />that you are going to pay is going to be the difference between the amount that you put in the <br />deposit into the registry and the amount that you finally settle at. The other aspect of <br />prejudgment interest that is important is the rates which are extremely high, when we started <br />in 2005 the rate was 9%, today it is II %, the difference between what you will ultimately <br />have to pay them that principal amount and the interest rate combined, deserves some <br />consideration in terms of understanding that number is a heavy duty number and it has come <br />up over time. He said a $7 Million Dollar settlement tells him essentially equates a value to <br />Parcell at roughly $5.2 Million Dollars, and again ajury could be $6 Million or $7 Million <br />would be totally reasonable. Based on the value of Parcel I being $5.2 Million Dollars, <br />prejudgment interest from April 2005 to the end of 2005, the full years of 2006 and 2007, <br />prejudgment interest is roughly $896,000.00. Some of that interest we believe was <br />unnecessarily incurred because of the delays in the court sanctioned continuances since March <br />but that number will continue to go up absent final judgment or until you reach final <br />judgment. <br /> <br />Mr. Calloway said attorney's fees based on this proposal roughly equates to $800,000.00. <br />That number is driven by a statutory formula that the State has that is in Florida law relative to <br />how attorney's fees are calculated in condemnation matters. If you add the $5.2 Million, the <br />$896,000.00 in prejudgment interests, and the $800,000.00 you have a little less than <br />$50,000.00 which should represent the amount that would be left over to pay their costs, but <br />that is not the City's responsibility to worry about how much they should be paid for their <br />costs, as this $7 Million Dollars is all-inclusive, the property Owner has the discretion and the <br />obligation to split that money any way they see fit. <br /> <br />Mr. Calloway said in swnmary, that this has been an ardnous challenge for the City and again <br />absent a final judgment, and that we are set for trial on Monday, and we are ready for trial, the <br />trial is anticipated to be 7-9 days, whether we win at trial, whether we lose at trial, chances are <br />we would find ourselves in a post-trial appeal, and that is not an unreasonable or unlikely <br />scenario, not given this case. He said that Mr. Katz has demonstrated that he does not need <br /> <br />3 <br />