On Monday, September 9, 2013 the Red Wing City Council approved the settlement of the lawsuit involving the City, Mississippi National Golf Links, Inc., Wendell Pittenger Golf Operations Inc., Wendell Pittenger, and Associated Bank. The City commenced the lawsuit when Mississippi National Golf Links, Inc. ceased operation of the Mississippi National Golf Course. In the lawsuit, the City had alleged that closure of the course breached the Golf Course Lease under which the Course has been operated since 2008. The City also named the Bank as a defendant in the suit because a leasehold mortgage had been filed against the Course, and approximately $800,000 remained outstanding on a Revenue Bond issued by the City in 1998 to fund Course expansion. The Bank, the purchaser of the Revenue Bond, asserted in the litigation that the leasehold mortgage, which allowed it to assume the role of Course operator, and the Revenue Bond, which would have allowed it priority right to Course revenues, remained valid despite termination of the City’s relationship with the Course operator.
Under the settlement, the Course operator agreed to pay the City $140,000 towards damages and costs the City has incurred since the Course ceased to operate. As importantly, the Bank has agreed to release any and all claims and interests under the leasehold mortgage, and has agreed it no longer has a right to revenues generated by Course operations. This settlement thus allows the City to move forward with consideration of proposals to reopen the Course for the 2014 golf season. The City is seeking operators through a proposal process. Proposals are due September 27 and the Council is tentatively scheduled to consider proposals in October.