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M Mike Morrison Phase 11 Northwest Quadrant Redevelopment November 8, 2005 Page 3 c. `III Notes. It is anticipated that the Development Team will finance their development costs up front and that they will request the City to "take them out" after the development is completed through the issuance of Tax Iixempt TIF bonds (same as on Phase I). This is a tool that is used in many of the metropolitan communities to assist developers with development and is a low risk proposition for the City, since the developments will be constructed and paying taxes when the City is issuing these bonds. d. interfund_ .can. The City will reimburse the Developer for certain acquisition and site preparation costs for three parcels (Don's Car Wash, Ed's Car Wash and Vacant Wirth Parcel) located within Phase If so they can utilize the funds to finance the Phase II development. The reimbursement will be made in the maximum amount of $1 million in the discretion of the HRA upon receipt of evidence that the Devcloper has arranged construction financing for the Phase ITA Patio Homes. This payment will be treated as an interfund loan. The HRH's obligation to provide the interfund loan is further condition upon the Developer conveyance to the HRA of the Don's Car Wash parcel at a closing. '!'his parcel will be conveyed back to the Developer at a future date for commencement of the Phase ITC development for $462,000 (amount HRA reimbursed the Developer fo)-). Ihis closing shall occur no Iater than May 1, 2007. After this date, the IIRA is not obligated to reconvey the parcel back to the Developer_ "'t his interfimd loan will be repaid to the IIRA through future tax increment generated From the development, any excess increment generated from Phase II development and land sale proceeds it receives when it sells the Don's Carwash parcel back to the developer. S. Miscellaneous. a Construction Ylans_ On or before March 31., 2006, the Developer will deliver construction plans for the Phase IIA Patio Homes. On or before March 31, 2007, the Developer will deliver construction plans for the Phase IIB Senior Housing and on or before March 31, 2008, the Developer will deliver construction plans for the Phase TIC Development for review and approval by the City. b. Phase TIC Development Timing. Currently the Developer is proposing to construct 55 units of senior housing in Phase ITC. The developer is required to submit detailed site plans and other project information to the City/HRA for review by no later than March 1, 2007. Prior to this submittal, if the developer determines that the proposed development does not meet the market conditions, then the developer can submit updated plans and proformas for review by the City/HRA. If the City/HRA agrees/approves of these plans, then the City/HRA and the developer will enter into an amendment to this agreement, but in no event, later than May 1, 2007. The aforementioned dates can be extended by up to sixty days upon the Developer's request. Any further extensions will be at the discretion of the City/HRA. c. Tax Increment Retention. The Developer anticipates a twelve (12) percent profit on the development. Once the Developer obtains this profit margin, they will provide a prorated "pay bacl2' to the City and IIRA of 25% of the excess profit. If the project profit exceeds fifteen (15) percent, then the City and HRA's prorated share of the profit will be increased to 50%.