Status of AEW's projects

fyi
---------------------- Forwarded by Kay Mann/Corp/Enron on 05/23/2001 08:39
AM ---------------------------

From: Ann Elizabeth White @ ECT 05/22/2001 10:26 PM

To: Kay Mann/Corp/Enron@Enron
cc: Barbara Gray, Jeffrey T Hodge/HOU/ECT@ECT, Taffy Milligan

Subject: Status of AEW's projects

Kay

Here is an overview of what projects are active:

1. Midway - Greg Krause

The hot item is a Property Owners Association Agreement that will be entered
into between Midway Development Company, L.L.C. ("MDC") and Cooney-Midway
Groves (the owner of the property on which MDC has an option to purchase).
The agreement will not be entered into or effective until MDC has given
notice it will proceed with the project (and, thus, we control the trigger).
I have asked Chris Boehler at A&K to turn a redline draft that incorporates
changes that Greg and I discussed last week with he and Darren Inoff. David
Layman at Greenburg Traurig (our Florida counsel) also needs to incorporate
some changes now that the platting has been done. Chris is to send his
redline to Greg, David and you. David is to make his additions and then send
a composite to Greg, you and Chris. This will probably take a week or so and
then it can go to the counterparty when everyone on our side is in agreement
with the changes. The biggest issue we have right now is that Cooney-Midway
Groves wants to maintain control over the property as long as they own an
interest in one of the tracts and we are not willing to allow that when we
will own 2/3 of the property but have less than 1/2 of the vote. This is
because the agreement is designed to give one vote to each acre. There are
three tracts, of which CM will own one and MDC will own 2, but the 3rd tract
is not alloted any votes since it must remain undeveloped land for a
retention pond.

Chris is also working on some title commitment letters for the option we just
secured from Clyde Thompson and Paul Freeman. There's no rush on those and
can definitely wait until I get back.

2. Pompano - Steve Krimsky

Pompano has 2 issues that are hot.

1. The infamous Developer's Agreement. Debbie has turned another draft and
has asked that we bless it before Thursday so that she can go visit with the
city attorney on Friday. The hearing in Pompano is scheduled for the evening
of June 12 and you have indicated that you will attend. I'll send them a
note to tell them you'll be there. We need to have a deal worked out with
the Pompano commissioners before the public meeting. The thing to keep in
mind here is that in Pompano, unlike Deerfield, the same group that will be
approving our request for a zoning change is the same group we have to
negotiate the developer's agreement with. Allegedly, they will settle for
$1.5 MM in annual payments. I've laid a copy of the agreement Debbie has
prepared on your chair.

2. In an effort to block the power plant project, Broward County has drafted
a proposed ordinance that will place a moratorium on the approval of any
power plant air permits until the matter can be studied at length. The
problem is, they expressly do not have the power to have any say in the air
permit process. That is expressly delegated to the Dept. of Environmental
Protection ("DEP"). However, the DEP hasn't taken the clean approach and
said they have NO authority but it has stated that BC is entitled to
reasonable rules and regulations and DEP will let them have some permit
approvals; HOWEVER, air permits for power plants are expressly not delegated
to BC. Greenburg is probably a week away from being able to give us a legal
opinion on the likelihood that Broward County will be able to do something
that is legally defensible. Once they started looking into this, it became
quite the legal search because at one time BC did have the authority to pass
special acts. However, in 1977 their special act authority was cut off but
the legislature ratified all rules they had in effect at that time. After
that, they were granted charter power to adopt have such authority as a
charter county to adopt their own home rules as long as they were not
inconsistent with state or federal law or the constitution. In 2000, they
repealed all prior acts relating to the issuance of air permits and said they
would rely on their charter power to make up their own rules. Problem is,
the DEP has expressly not given them the right to have a say in air permits
for power plants. Needless to say, this is sticky and icky. My
recommendation is that we don't jump out and incur litigation costs. Let us
get a memo together, go talk to the county attorney and show him that they
don't have the right to do this. The hearing on adopting this ordinance is 2
p.m. on June 12, same day as the commissioner's meeting on the Developers
Agreement. Between now and June 12, Debbie Orshefsky would like to talk to
the attorney and to the DEP. Indications are that the DEP will strongly
support us as this could be a turf battle for them. The county attorney may
come to his senses and advise the commission that passing such an ordinance
will be costly as it is unenforceable if challenged. We can also ask the DEP
to issue a "declaratory statement" and it is likely that statement would say
that state law is pre-emptive and the ordinance is invalid.

This is a very, very broad brush of what is a very legislative history
intensive issue. Debbie will be looking to you to read the memo that will
come next week and agree on a strategy on going forward.

3. Deerfield - Steve Krimsky

Unlike Pompano where the commissioners who vote on the rezoning are the same
who vote on the developer's agreement, in Deerfield they don't have a say
over any of the approval process. However, to facilitate coming into the
city, they expect something. If we can agree on the form of developer's
agreement, then it would be substantially used in the same manner in
Deerfield. In Deerfield, they have said they want 3 things: a payment in
lieu of taxes, a landscape fund to fund upkeep of a particular street (which
is basically an adopt a street program and is required of any new business
coming into Deerfield) and they want an easement to put a cellular tower on
our property. I've told Steve Krimsky the latter can be a headache because
if they are successful in leasing the space on the tower to third parties,
that creates a lot of traffic going across your property. It is very
do-able, we just need to structure it correctly. I've done several radio
tower agreements and we can use those as go-bys. They may also want a "fire
service fee" if we give one to Pompano. There's also lots and lots of
negative publicity on a daily basis and Eric Thode is wanting to respond with
an editorial in the Sun-Sentinel. I'll forward the most recent version they
have been sharing amongst themselves and not we lawyers. The hearing in
Deerfield is June 8th and you may want to attend it as well.

I'll copy my notes for you. THANK YOU for covering for me. Here are
numbers you can send e-mails to or call and leave a message:

Walter and Marlena Schilling 011 49 8218 89351 schilling.jun@freenet.de

Monika and Bernhard Steinacher 011 49 8232 8932 m.steinacher@schwabmuenchen.de

Walter and Bernhard and Bernhard's daughter, Susanne, speak pretty good
English and Monika's isn't bad. Marlena doesn't speak it very well so ask
for Walter. Bavaria is 7 hours ahead of Houston.