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Hanson, Joel To: George Sherman George: Thanks again for your patience as we attempt to finalize our decision relative to the selection of a developer for the SE corner of Rice Street & Little Canada Road. The purpose of this e -mail is to restate your position regarding the project based on the comments you have made to me. The key points of our discussion are as follows: • You feel the City's goal of recovering our land costs of +/- $2,000,000 through this redevelopment project is reasonable. • You are willing to guarantee in a preliminary development agreement (the initial agreement that selects you as the developer for our project and that will establish milestones for accomplishment of other key terms of our relationship as we work toward a final development agreement) the repayment of our $2,000,000 front end costs. • You are not dependent on any competitive programs to be able to make this guarantee. • You would propose to repay us with a Pay As You Go (PAYG) format over a short term (no more than three years) with approximately 1/2 of the money to be repaid at the time of land transfer and the balance by selling the TIF note after the project is constructed, including the townhomes. • You will pursue an allocation of tax exempt bonds for the senior apartment component of this project. While it is typically difficult to obtain an allocation for this type of project, you feel you can likely do so through MHFA. • You indicated that MHFA has invited you to apply for this allocation. • Your ability to repay the $2,000,000 is not dependent on the award of a tax - exempt allocation, • You would like to pursue Livable Communities funds to supplement /enhance the project. These funds are not essential to the repayment of the $2,000,000. • If Livable Communities funds are pursued, the project will not start until 2003. • You are not opposed to targeting a 55+ market for the townhome component. • The density of the townhome component will likely drop from your initial projections due to storm water and infrastructure issues. • The exact details of our arrangement would need to be worked out over time, subject to the commitments referenced above. If I misstated any of the above points, please correct them for me and return this afternoon. I would also like you to provide me with brief answers to the following questions: 1. If you are not successful in obtaining a bond allocation, is the PAYG repayment concept stated above jeopardized? 2. Will you pursue the use of Ramsey County HOME funds for this project? Feel free to add any other pertinent information you feel I should present to the City Council. Original Message From: Melodie Bridgeman [SMTP:MelodieB @go2sherman.com] Sent: Wednesday, February 27, 2002 4:19 PM To: joel.hanson@ci.little-canada.mn.us Subject: Rice & Little Canada Project Questions Joel: Following are responses to your e-mail questions about the above project: 1. The PAYG repayment concept is NOT jeopardized if we are not successful in obtaining a bond allocation. 2. We would like to target some of the units to be affordable and would be willing to pursue the use of Ramsey County HOME funds for this project. (Their funding deadline for Year 2002 is March 1st.) We would be willing to pursue other funding mechanisms as well. Clarification on your fourth bullet point - We assume this TIF note is tax exempt, similar to Shoreview, and not contingent upon MHFA. Page 4