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35 To: Mark Casey — Executive Director From: Stacie Kvilvang Date: June 12, 2012 Subject: Development Agreement - Dominium Senior Housing Project Dominium has submitted a Purchase Agreement (PA) to City's I lousing and Redevelopment Authority (HRA) to purchase the JA Cadawallader and the vacant Fannie Mae parcel from the City's Housing and Redevelopment Authority (PA covers both parcels). In addition to acquisition of the HRA's parcels, they will need to purchase another parcel from Apache Redevelopment LLC (Len Pratt) in order to accommodate the development of 152 unit of senior rental housing. Based upon the above referenced development program, following is a listing of the proposed business terms for the final Development Agreement: 1. Land Use a. Income and Rent Limits. Dominium covenants and agrees to rent at least 20% of the units to seniors at or below 50% of the Area Median Income (AMI). 2. Acquisition a. Closing. Dominium will acquire the land no later than March 1, 2013. b. Purchase Price. The proposed purchase price is for $1,216,000 which equates to $8,000/unit. The HRA's portion of the land sale proceeds are 52.88% of this amount, or $643,021. Dominium will enter into a purchase agreement with Len Pratt for the adjacent property for approximately $572,979 or the remaining 47.12% prorated portion of the $1,216,000 purchase price. c. Purchase Price Adiusunent. Dominium represents that the estimated construction costs of the project are $13,951,371. When they receive their Certificate of Occupancy (CO) they have to provide the City an audited construction cost statement. If based upon this statement (and the receipt of any other grant sources), the actual construction costs are less than $13,951,371, then Dominium will increase the payment for land to $10,000/unit. This means that if either cost savings or grants equaled or exceeded $304,000, the City and Mr. Pratt would be reimbursed this amount on a prorated basis accordingly (up to $160,755 for the HRA and up to $143,245 for Len Pratt). If the amount was less than $304,000, then the City and Len Pratt would be reimbursed at the lower level accordingly (i.e. savings of $200,000 would be prorated back to the City and Len Pratt in the amount of $105,760 to the HRA and $94,240 to Pratt). 10 p 3060 Centre Pointe Drive E H LE RS Roseville, MN 55113-1105 LEADERS IN PUBLIC FINANCE hone: 651697-8506 Fax: 651-697-£3555 skvilvang@eh leis ino,corn