Pedway4

April 17, 2001

Mr. Richard Ward

155 N. Harbor Dr. #5101

Chicago IL, 60601

RE: Lakeshore East

Dear Mr. Ward:

Following are clarifications to some inaccurate information on the Pedway, found on your web site (a copy of which is attached):

A.)This is not a reference to the 1969 PD70, but a reference to the 1979-Amendment-to-the-1969-PD. This sentence does not denote that provisions of the 1969 PD still apply.

Technically you are correct especially when you use the words "This sentence". However, 2 inches down you can find what we were referring to: the references to the 1969 PD #70. We will expand our abbreviated margin notes (green on page 3) to read more accurately: "Note reference to original 1969 PD 70 three provisions that are still applicable in the year 1993 and 2000."

B.)This sentence is referring to various agreements between the developer and 400 East Randolph, in which it is expressly stated that the 1993 Agreement superseded the 1979 Agreement between those two parties. The 1993 PD70 Amendment superseded the 1979 PD Amendment. This section of the 400 East Randolph Agreement memorializes only two (2) specific points of the 1969 PD regarding site coverage and parking not the entire 1969 PD.

Again, we will expand the margin notes to more accurately reflect the correct meaning: "Note that the reference to the three provisions in 1969 PD 70 were not superceded."

C.)This statement does not obligate the developer to provide the referenced pedestrian walkway it merely obligates the developer to cooperate in its planning. The 1993 PD, which specifically describes the future extent of the pedestrian walkway, clearly does not include pedestrian walkways in this area. Furthermore the current plan of development, which has been approved by the Plan Commission, does not include a building at this location only townhomes thus a Pedway connection in this area would be incompatible with the plan.

This website margin note is completely accurate in our opinion. However, your paragraph makes a very misleading inference that a Pedway cannot be built over town homes. That is similar to what the approved Lakeshore East plan does northwest of the Buckingham. Our 6-14-2000 Plan to extend the Pedway around Outer Drive East over the town homes to the "common corner" is feasible if you are willing to relocate a few town homes as you did north of Buckingham.

D.)The developer is not moving the "current walkway", for which a requirement in this area does not exist. The developer is also not demanding prepayment from 400 East Randolph for a connection cost. We do not know where the $10,000,000 figure came from. Finally, the developer is not negating the "Ägreement with ODE", because this is not a requirement of the Agreement.

The website margin note is completely accurate in our opinion. You did relocate the required 1993 pedway, without any notice or public hearing, to end in the building west of Buckingham. There has been a continuous effort by each successive developer to systematically withdraw the Pedway from all 5 existing buildings. The "required developer provided Pedway" was promised in 1969 to be adjacent to the 400 Randolph property. Then in 1979, the promise was unilatrally altered to a location 190 feet north of ODE. Fourteen years later in 1993, with a record of many warnings from the Department of Planning staff, the end was moved further northwest across Field Drive. In your year 2000 plan, you tried to withdraw the developer's Pedway responsibility to the building west of Buckingham. But that will change with the completion of your separate agreements with Buckingham and Outer Drive East. However, the 3 buildings on Harbor drive (155, 175, and 195) have been left out of enjoying the amenity that was certainly a moral promise and possiby a legal covenant.

E.) Yes.

Thank you for the confirmation that you have known about the ODE covenant. Our January 7, 2000 notice and caution was possibly not necessary, although not everyone at Magellan was aware of the covenant or were possibly not admitting their knowledge when questioned.

F.)We cannot speak for the City. We do know that any specific requirements of the Agreement (site coverage and parking) have been addressed and complied with.

You state, "Any specific requirements of the Agreement (site coverage and parking) have been addressed and complied with." Please acknowledge the Pedway requirement is specific also, and provisions for ODE access are being designed into the adjacent property location(s) when the adjacent property to the north is developed. Has this specific requirement of the Agreement "been addressed and complied with" as you state?

G.)Again, a "continuous" covered walkway system connection to the Buckingham is not an obligation of the developer, notwithstanding its characterization as a $10,000,000 problem.

Let us suggest that we start with clear wording that both sides can agree upon, and that is the unambiguous wording in the 1969 Planned Development regarding the applicant being responsible for paying for the Pedway. Then both sides can look for equally strong wording that CLEARLY SHIFTS the cost of the Pedway to the existing residents. We have carefully studied every one of thousands of pages of PD 70 documents in City Hall looking specifically for even an obscure mention of the current residents being financially responsible for building the "continuous covered walkway" and we have found absolutely none. It would be greatly appreciated if you would please direct our attention to the document or transcript that is the basis for your denial of the financial responsibility of the entire succession of developers, including Lakeshore East. Specifically on what date or during what period, did the financial responsibility SHIFT from the current developer to the then current owner/residents? We believe you will find NONE.

H.)This paragraph contains a host of inaccuracies. First, there is no existing covenant (especially from the 1993 Agreement) regarding a requirement on the part of the developer to extend the Pedway to Outer Drive East. Second, any statement regarding the advice of our lawyers is supposition. Third, the 8-year old Agreement with Outer Drive East is not being threatened and is actually being complied with. Fourth, the 1969 PD language regarding the pedestrian walkways does not exist today, either by reference in the 1993 PD Amendment or in the 1993 Agreement with 400 East Randolph, which again confers no obligation on the developer regarding the pedestrian walkway system.

Thank you for acknowledging that the provisions of the 1993 Agreement can be considered to be a covenant that runs with the land. You claimed a host of inaccuracies and mentioned four: FIRST, of course, we agree that the 1993 Covenant Agreement does not contain specific wording "regarding a requirement on the part of the developer to extend the Pedway to Outer Drive East." However there are 146 words in that Pedway paragraph. It was written with a background of 24 years of documents and sales presentations, for the unanimouly assumed purpose of insuring access to the Pedway for the residents of the 400 Randolph building who had gotten a little older but were still waiting patiently. Any objective neutral is going to conclude that the clear intention of the covenant is to extend the Pedway to allow direct access to the residents of ODE. Moving the Pedway out of financial reach was not contemplated by the 400 Condominium Association in 1979 or when the covenant was re-stated and re-affirmed in 1993 and it is not acceptable in 2001. You may desire to carefully study each phrase and word of that paragraph (and the background documents including the 1969 PD, 1979 Amendment and ODE Agreement, 1993 Amendment and ODE Agreement, and the 2001 Amendment and ODE and Buckingham Agreements), and we request that Lakeshore East LLC share with us your interpretation and reasons for each element in that document. SECOND: You are correct regarding the editorial supposition and we note the lack of denial of our assumption. THIRD: We respectfully disagree that the covenant is being complied with. FOURTH: The 1969 PD language does exist today and is the reason we are discussing the Pedway financial responsibility to determine if either side can offer ANY evidence when and if the responsibility SHIFTED. If neither of us can determine when the financial responsibility shifted, then we can certainly agree that it never did shift. For the last several years, we were told by the city that the Pedway was no longer feasible under the 1993 PD70 Amendment. Now, miraculously, the Pedway is again feasible and incorporated in your recently approved plan. ONLY the financial responsibility has been unilaterally declared as having been shifted at some unspecified point in the past 32 years. You may be hoping that if you say it and write it often enough, it will become fact. We are confident that factual evidence of a "financial shift" does not exist.

I.)There is no reference to the 1969 PD70 in the 1993 Agreement with respect to the pedestrian walkway.

We agree there is no specific direct reference in the 1993 Agreement to the 1969 PD70 with respect to the pedestrian walkway. However, your implication that the re-stating and re-affirming the 1979 Agreement (which is stated in the 1993 Agreement) does not link all the relevant background documents is incorrect. The 1993 Agreement was not created in a vacuum. The intent and expectations of both parties, including all successive developers, in 1969, 1979, 1993, and 2001 remains relevant in this issue. If you are troubled by your opinion of the inappropriate and/or incorrect expectations of the thousands of families in our community, you may desire to seek a judicial determination so that this uncertainty will not impact the potential resale value of the amended authority you now have from the City of Chicago. (And we assume you have a "full disclosure obligation" to reveal the background and discussion on this website to any potential buyer.) It should not be difficult for us to find a hundred persons to testify under oath as to their understanding of the promises that have been made over the last 32 years. These promises certainly carry a moral obligation and could be considered covenants that run with the land and are not subject to changes in the political climate or the lobbying by developers and their lawyers within the Planning Department. Thousands of "third party beneficiaries" made significant financial purchasing decisions based partially on these promises, agreements, and covenants.

J.)The drawing showing the proposed Pedway connections and extensions by the various owners of 175 Harbor Drive, The Parkshore and Harbor Point is merely diagrammatic. The actual connection for their connection and extension would be up to these owners.

This a an attempt to explain a significant mistake by Skidmore in depicting the non-existent Middle Harbor Drive in their "Intermediate Plan of Development". Please note your previous graphic on the website that you failed to mention or explain. It was not a coincidence or "merely diagrammatic" that Skidmore depicted the missing planned and approved Pedway extension in the mistaken empty intermediate Harbor Drive area. The lead Skidmore architect was advised of this discrepancy several months earlier in the hallway of the Daley Bicentennial Plaza. He apparently did not follow-up or understand the input.

K.)The developer cannot deny financial responsibility, for an obligation that does not exists.

It was clearly stated in 1969 and repeated clearly in 1979 that the developer or its successors, heirs, assignees, grantees, or devisees shall obtain all official reviews, approvals, or permits. It also said that: It shall be the responsibility of the applicant to provide continuous major pedestrian walkways." These are defined as "enclosed all-weather walkways". The developer (and all successors) received significant valuable authority from the City of Chicago and in return the developer (and all successors) accepted the obligation to provide certain amenities. All successor developers have enjoyed this financial benefit and the financial responsibility for the Pedway has never been shifted to the residents as Magellan (an agent for Lakeshore East, LTD) now contends.

L.)The slide does not show the developer's responsibility to pay for the Pedway. This is an incorrect conclusion drawn from the referenced materials.

We respectfully disagree as our previous comments clearly explain.

M.)The developer has not agreed to pay for the Pedway to the Buckingham and Outer Drive East. Lakeshore East LLC has an agreement with 400 East Randolph to extend the Pedway to Outer Drive East only in the event of and in exchange for future items yet to be determined.

The copy that you faxed to Mr. Ward within days of the agreement had that last phrase missing (" only in the event of and in exchange for future items yet to be determined" ). Your office searched for several hours and promised to send him the complete wording without the cut-off when it was found. We would still appreciate the opportunity to review a clear complete copy.

N.)The agreement did limit townhome building heights along the northern edges of the two buildings. The agreements did not secure Pedway access to these buildings. Furthermore, it should be noted that, in the area directly north of 175 Harbor Drive and the Parkshore, numerous townhomes have previously been eliminated and high-rise towers have been moved in deference to the residents of these two buildings, but especially the Parkshore.

We agree that the recent Buckingham and Outer Drive East covenants eliminated and/or reduced the height of the planned town homes to the north. However, it is misleading for Magellan to now imply that the town homes in the original Magellan 1999 Plan that were eliminated north of 175 and 195 was an advantage to those buildings. Just the opposite is true. In the 1999 plan the nearest high-rise building was 310 feet north. The current Lakeshore East plan reduces that distance to 110 feet. That is certainly NOT "in deference to the residents of these two buildings" as your letter states.

O.)The City is not allowing the developers "to eliminate paying for direct access," because this commitment does not exist.

As the slide shows, Outer Drive East was assured direct access when THEY approved the initial plan in 1969. As the website clearly shows, the HISTORY OF WITHDRAWAL by all successor developers, including Magellan/Lakeshore East, had moved the "covered walkway" requirement (with the City's cooperation) 190 feet north in 1979; then moved again to the northwest, short of Field Drive in 1993; and finally moved to "end your responsibility" in the proposed building east of Blue Cross. When the successive developers were allowed by Chicago to gradually "re-plan" the required Pedway from the buildings AFTER they were built and sold to new residents, the developers and the City effectively betrayed their promises. These moral promises or covenants , that were presumed to run with the land of Planned Development # 70, have been broken.

P.)One final clarification, Lakeshore East LLC is the Developer of the project. Magellan Development Group, Ltd. is merely a member of Lakeshore East LLC.

We appreciate Magellan clarifying that they are merely the agent for the developer. We now understand the legal entity responsible as the " successor developer" within the continuous chain of amendments and agreements to be Lakeshore East LLC.

We are sharing your 16 "clarifications" and these 16 responses on the New Eastside Forum website ( http://www.NewEastsideForum.homestead.com ). If you have any follow-up comments, we will consider adding them to the website. The object of the website is to be a forum of issues affecting our community so that our residents will more clearly understand their surroundings and the factors that affect their environment and lifestyle.

Sincerely, Richard F. Ward Website Administrator

Very truly yours,

MAGELLAN DEVELOPMENT GROUP, LTD. As Agent for

LAKESHORE EAST LLC

/s/ Sean P. Linnane

Vice President of Development