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MINLITLS <br />CITY COUNCR. <br />.IANUARY 16, 2002 <br />the middle floor depending on the amount of square footage involved, and the <br />first floor would (end itself to medical or dental users. <br />Morton reported that they had felt the details of the development agreement <br />were close to being finalized. However, due to the current markets, financing <br />has become a problem. Morton detailed his discussions with both US Bank <br />and Bremer Bank. Bremen's position is that they should dilute the partnership <br />and spread the risk. Therefore, at this time they are working to attract <br />additional investors in the project, and he is currently having discussions with <br />Towle [Zeal Estate as well as some individuals. <br />Morton pointed out that there would be no problem with financing if the <br />building were leased. However, they prefer to get the project underway first. <br />Morton anticipated it would take 24 months to lease the building. He also <br />anticipated rents at $13 per square foot. <br />Morton indicated that the reasons the City should choose them to do this <br />redevelopment project are many. First, they are long term investors in the <br />projects they do. They su ive to be fair and would partner with the City, and <br />are not greedy and are realistic about the return on their iuvestment_ R. A. <br />Morton will put real dollars into this project. They know the project on paper, <br />know the numbers, and the only thing they can't control is the market and lease <br />up. R. A- Moitou is also an environmental expert. He noted that they have <br />done a Super Fund site clean up, and the environmental issues with this <br />property do not scare them. Morton also indicated that he should be able to <br />have an answer on the financing for the project by the end of the month. <br />The City Administrator asked about construction costs. Morton replied that <br />they anticipate construction costs at $120 per square foot, but this number <br />could be lower. <br />Fahey asked Morton's opinion relative to the City increasing its equity position <br />in the project. Morton suggested that they would prefer to first exhaust their <br />efforts with financing, and he will have the answers by the end of the month. <br />If they are unable to obtain financing, then Plan B would be considered. <br />L,aValle asked about the City putting an additional $200,000 into the project. <br />Morton replied that they are looking for an additional $350,000 as well as <br />backing off on the $650,000 that R. A. Morton has planned for the project. <br />`they are trying to achieve a total of $ t million in equity. Again, Morton <br />indicated that he should know about the financial situation by the end of <br />January. <br />Scalze asked how Morton solicits tenants. Morton reported that they send <br />newsletters to all realtors promoting the space. Morton presented the Council <br />with pictures of some of the other projects that they have done. <br />2 <br />