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• FALCON HEIGHTS CITY COUNCIL MINUTES -2- June 25, 2003 POLICY AGENDA: First Amendment to the Development Agreement Between the City of Falcon Heights and the Falcon Heights Town Square Limited -Multi-Family Attorney Scott said that at the June 11, 2003 Council meeting, the City Council approved three development contracts. What is before the City Council tonight is an amendment to the development agreement for the Falcon Heights Town Square Limited Partnership, a resolution authorizing the condemnation of three parcels, and the hiring of Wilson Development Services to provide relocation services in connection with the Pizza Hut property. Pizza Hut is a tenant of the owner of the shopping center. Why would the City consider condemnation? The developer has come to the City and requested this. He has been unable to finalize the land acquisitions to enable this project to go forward and is requesting the City to exercise its authority, under its condemnation authority, to acquire these parcels. This is a new concept for the City of Falcon Heights, but it is a fairly common undertaking for cities in the context of redevelopment. There is some risk to the City in taking this step. The ultimate cost falls back to the redeveloper. . The City does the acquisitions, but under the amendment to the development contract, it falls back to the redeveloper to reimburse the City for all of the costs. At this time, the redeveloper will deposit $250,000 with the City. The first step will be to attempt to negotiate and then initiate condemnation, and Attorney Scott described the properties that will be a part of this process. Council member Lamb said that the Council packet contained legal descriptions of the properties involved, but, for the benefit of the people in attendance and those watching the Council meeting on cable, he asked Administrator Worthington if she would give a "real world" description of the parcels, and she did. Council member Lamb asked what will happen if the City doesn't do the condemnations. Attorney Scott said that if the Council doesn't authorize the condemnations, the fall back position will be what the current development contract says. Mr. Sherman would continue to attempt to acquire the parcels on his own. Until then, the project would not go forward. In response to a question from Council member Lamb about the possibility of Sherman Associates providing some time of a performance bond to the City, Attorney Scott said there are different mechanisms that could be looked at. A number of them were explored with Mr. Sherman, but it was determined that they would not work in the context of this particular project. Mr. Rod Krass, Krass Monroe, an attorney representing Sky Ventures, the company that • operates Pizza Hut, said there were two issues he wanted to discuss. This is a tax increment project and it will be "pay as you go".