Wayne Schulstad — Letter to the Daily News
Re: ‘Millennium running out of time on hotel deal’ (Daily News, March 6)
Your article quotes Mayor John Ruttan as stating, “Without a solid plan to start construction, this deal will be over.”
He is of course referring to the agreement between the City of Nanaimo and the Millenium/Suro Joint venture, specifically article 7.3(b) which defines very clearly when the developer is in default of their obligation under the agreement.
The critical difference is of course “commenced construction” as opposed to “solid plan.”The default clause does not say the Joint Venture must have a “solid plan” in place, but actually reads “If the Joint Venture has not, on or before March 31,2010, commenced construction of the hotel in a manner acceptable to the city in its sole discretion” (then it is in default).
Is it asking too much to ask city’s officials that they understand the agreement they signed with the developer?
I suggest it is not.
And that’s because there is the obligation of the city, upon default by the developer, to immediately initiate action to recover the $3 million already advanced and to draw down the $100,000 letter-of-credit issued by the developer as its penalty for not meeting the agreed schedule.