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Mr. Daniel L. Hall November 24, 1998 Page 3 4. Section 3.2 (h) refers to Section 7.2. There was no Section 7.2 in the Development Agreement which I reviewed. 5. Section 3.2 U) conditions the City's reimbursement to the Developer of the Project Costs on the issuance of the Tax Increment Bonds. Since this condition is outside of the control of the Developer, it should be deleted. 6. Section 4.2 of the Development Agreement addresses the mechanics for the submittal, rejection and resubmittal of the Construction Plans.. The last paragraph on page 9 of Section 4.2 should make it clear that in rejecting the Construction Plans, the City must specify in writing the reasons for such rejection. I suggest that the first sentence of the last paragraph on page 9 be revised to read as follows: "The Construction Plans must be rejected in writing by the City within thirty (30) days of submission or shall be deemed to have been approved by the City. If the City rejects the Construction Plans, such rejection must be in writing and must specify with particularity the reasons for such rejection." 7. Article VI addresses "Assessment Agreement and Other Covenants". You have described to me the circumstances relating to the Minnesota Department of Transportation and the "Park and Ride" lot. It would appear to me that if the City received proceeds as a consequence of the possible transaction with the Minnesota Department of Transportation, and is able to acquire the Rent all Property for less than the stipulated consideration, the resulting benefit should not be a windfall to the City, but rather applied to the benefit of the Developer. This potential benefit can accrue to the Developer's benefit by reducing or eliminating the Payment In-Lieu of Taxes provided for in Section 6.3, or by the abatement of the Developer's Agreement to Pay Tax Increment Deficiency as set forth in Section 7.1. A suggested revision-for insertion into Article VI ibilows: "Section 6.4 Payment by Third Parties. In the event the City obtains the payment, credit or other benefit of a transaction with a third party relating to the Development Property with respect to the Project or any part thereof, such benefit shall accrue to the benefit of the Developer and will be applied first to the abatement of the payment in-lieu of taxes described in Section 6.3, then to abatement of the Developer's Agreement to pay tax increment deficiency and the requirement to provide a Letter of Credit relating to such Guaranty as described in Section 7.1, and finally to reduce the balance of the Tax Increment Bonds and a corresponding reduction of the term of the Assessment Agreement."