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City Council Regular Meeting Minutes 15 September 23, 2003 Page 15 1 Ms. Kvilvang explained the redeveloper had requested assistance in acquiring the three 2 commercial properties upon which the Phase IA for-sale housing units would be located. She 3 stated the development team held discussions with Fannie Mae to assist in providing the "up 4 front"money needed to acquire these properties and Fannie Mae was willing to provide this 5 assistance but would require, as collateral, the land, Developer Guarantee and a pledge of funds 6 from the City. She anticipated the City would utilize funds from the water filtration fund as 7 collateral for the loan and would not be required to provide its general obligation taxing 8 authority. She noted the terms of the collateral were still being discussed with Fannie Mae and 9 terms of a revolving fund for future property acquisitions were still being discussed with the 10 redeveloper. She added any final loan agreement would be brought before Council and the HRA 11 for approval. 12 13 Ms. Kvilvang indicated the developer of the for-sale housing units anticipated a 12%profit on 14 the development. She explained, once the developer obtained this profit margin, they would 15 provide a prorated "pay back"to the City and HRA of 25% of the excess profit. She added the 16 City and HRA's prorated share of the profit would be increased by 50% if the project profit 17 exceeded 15%. She noted the profit calculations excluded any unit"upgrades"requested by 18 homeowners. 19 20 Ms. Kvilvang stated, provided the for-sale developer was not in default, in the event the return to 21 the for-sale developer was less than 12%, the City and HRA would provide the for-sale 22 developer a subordinated pay-as-you-go (PAYG) tax increment note in the amount needed to 23 attain a 12% return. 24 25 Ms. Kvilvang indicated mutually agreed-upon preliminary development proformas for the for- 26 sale housing and commercial development would be attached as an exhibit to the Development 27 Agreement. She explained this would be the basis for determination of assistance for the 28 developments and,when the developments were completed, the actual development proformas 29 would be compared with the preliminary develop proformas. She noted the excess proceeds 30 would be disbursed to the City and HRA as excess TIF and would be made available for Phase H 31 developments within the TIF district if the projects performed better than anticipated, the for- 32 sale developer received their required profit amount of 12% and the commercial developer met 33 their construction and lease goals. 34 35 Ms. Kvilvang noted the City and HRA would enter into a separate redevelopment contract with 36 the rental housing developer. 37 38 Ms. Kvilvang indicated the redeveloper would utilize reasonable efforts to acquire all property 39 privately prior to requesting the City to initiate condemnation, including use, where appropriate, 40 of City-sponsored mediation. She noted the City would agree to undertake condemnation of all 41 real properties located within the redevelopment district that would restrict redevelopment as 42 contemplated. She explained all costs of condemnation proceedings would be paid by the 43 redeveloper, subject to reimbursement of certain costs as a public redevelopment cost from tax 44 increment in accordance with the Redevelopment Agreement. 45 46 Ms. Kvilvang stated the redeveloper had reimbursed, and agreed to do so in the future, the City 47 and HRA for all costs of the City and Authority in advancement of the project, including but not