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1 <br />1 <br />1 <br />COUNCIL MEETING MAY 22, 1995 <br />years. There was no discussion regarding whether the units would <br />remain rental or be sold. Ms. Wyland explained that according to <br />the Planning and Zoning Board minutes, Mr. Derrick indicated that <br />covenants would provide that the project would be single <br />ownership which would mean that the project will continue as <br />rental units for 30 years. Mr. Derrick said that this is not his <br />understanding. The covenants would provide that the units be <br />senior housing for 30 years, but could not guarantee that the <br />units would remain rental units after the first 15 years. Ms. <br />Wyland said that Mr. Derrick had indicated that the entire <br />project would be sold as one unit. Mr. Derrick said that he will <br />see the entire project as one unit but could not guarantee that <br />the new owners would do anything in particular during the next 15 <br />years. Council Member Kuether said regardless of how the project <br />is sold after 15 years, the new owners would have to come before <br />the City Council and request approval for any change in <br />operation. Mr. Derrick said he did not want to promise something <br />that may not happen. Council Member Bergeson noted that there <br />will be a developers agreement and many covenants. He felt that <br />this particular concern should be addressed in the developers <br />agreement and should not be a part of this review. <br />Mr. Brixius said that if there is an issue regarding rental as <br />opposed to owner occupied, an approval of the site and building <br />plan should include this issue as an issue to be resolved. He <br />wanted to be sure that the issue has been resolved or is not an <br />issue at all. Mayor Reinert said that for the first 15 years the <br />project will be rental senior housing. Mr. Brixius said that Mr. <br />Derrick is willing to extent the use as senior housing for <br />another 15 years. However, the issue is whether or not the <br />second 15 years will remain rental or become condominium <br />ownership. Council Member Kuether she feels that since the City <br />is putting approximately one million dollars in the project, the <br />rental guarantee should extend beyond 15 years. <br />Mr. Derrick said he did not care if the project remained rental <br />for 1,000 years. His concern is that both the tax credit buyer <br />and the lender both intend to sell the project at the end of 15 <br />years. If there is a covenant that they think will prevent them <br />from selling the property at the end of 15 years, or is different <br />from the way they have approved it, they may not be willing to <br />continue in the project. Mayor Reinert asked Mr. Brixius how the <br />property is zoned. Mr. Brixius said Multifamily with a PDO. <br />Mayor Reinert said that controls the use of the property. If the <br />property is sold after 15 years and the new owner wants to change <br />the use to condominiums the new owner must make a formal <br />application that will be considered by the City Council. Mayor <br />Reinert explained to Mr. Derrick that the PDO zoning controls the <br />use of the property. Mr. Derrick said he understood and this is <br />PAGE 15 <br />