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1. Who to work with: <br />Barthel Construction has been a residential home builder for <br />many years. Although they have built elderly projects, are using someone else's project as an example. They <br />may very well be qualified to do the project, I just am not <br />that familiar with them. <br />Clearly, there are many elderly housing developers in the <br />Metro Area. Unfortunately, too many have gone broke. <br />2. Specific Elderly Project: <br />I believe most are aware that the Metro Area has an <br />unusually large number of elderly projects that have <br />defaulted or are in financial trouble. This is primarily <br />the result of overbuilding the market and developers who <br />did not appreciate the complexities of the elderly market. <br />A long waiting list for subsidized ($100 -$200) units cannot <br />be construed to substantiate a market for market rate units <br />($500- $600). <br />I suggested to Mr. Wolff from Barthel that a market study was <br />needed. I further suggested that supportable rent levels be <br />established so that they could be compared to rents necessary to <br />break even. Once we know the size of the "gap" we can determine <br />the feasibility of filling the gap with tax increment dollars or <br />other sources. <br />They prefer to have the City own the building, therefore giving <br />the City "control ". I would suggest that we can provide you with <br />all the control necessary, through the Zoning Ordinance and TIF <br />contract. I would be concerned that the "control" might become a <br />"liability" on an empty building. <br />Basically, we need specifics of the project before we can <br />respond. Steve Grittman is available to be at the Council <br />meeting with Barthel and Miller and Schroeder if you wish. <br />cc: Bob Voto <br />page 2 <br />