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M <br />Mike Morrison <br />Phase II Northwest Quadrant Redevelopment <br />November 8, 2005 <br />Page 5 <br />Increment cost lin an amount that is currently estimated to be $925,000 and individually <br />listed as follows: <br />Predevelopment Costs (Public/Private): $275,000 <br />Capitalized Interest: $650,000 <br />Developer Overhead/Administration $400,000 <br />Contingency: `5250,000 <br />TOTAL $925,000 <br />I he Developer shall cost certify all such private third party costs and expenses to the <br />reasonable satisfaction of the City and LIRA. Any cost savings will be considered <br />available Tax Increment for other qualified costs in the Redevelopment District. <br />h Masl:ea DeveloRca hoe. The Developer will be paid a $500,000 fee for the Phase 1I <br />development. The fee will be paid as follows: <br />Phase ]IA Patio Homes: $150.000 <br />Phase 1113 Senior Housing: $200,000 <br />Phase TIC Housing: 81501000 <br />The Developer will be paid at the time of the closing of the land sale to each project <br />element. <br />i. Default. In the event that the Developer fails to commence any phase of the project by the <br />default dates set forth in the chart on page 2 of this memorandum, the City and IIRA may <br />terminate its obligations under the Redevelopment Contract as regards that phase of the <br />project. <br />Upon any termination, Tax Increment from portions of the Project, Which have not been <br />commenced, shall, at the election of the City and IIRA, no longer be pledged and available <br />to repayment of any "pay as you go" tax increment. As part of the underwriting process, <br />the parties and the underwriters, shall establish the terms of any Tax Increment obligations <br />to 'both recognize this provision and allow effective issuance of the debt. Tax Increment <br />from completed and under construction Elements of the Project shall remain available for <br />outstanding Tax Increment debt. A default shall not prevent refinancing with Tax Exempt <br />Take-out Debt on completed Elements of the project. <br />j. Phase II DevelopmenLRL deet. A summary of the Phase II development budget is attached. <br />The elements of this transaction are within industry standards that Ehlers and Associates have seen <br />within the Metropolitan Area on these types of developments. Please contact me at 651-697-8506 with <br />any questions. <br />cc: Jay Lindgren — Dorsey & Whitney <br />Daryl Gennar — Pratt/Ordway <br />File <br />