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83 <br />TO: Mark Casey — City Manager <br />From: Stacie Kvilvang <br />Date: June 12, 2012 <br />su je t Development Agreement - Dominium Senior Housing Project <br />Dominium has submitted a Purchase Agreement (PA) to City's Housing and Redevelopment Authority <br />(HRA) to purchase the JA Cadawallader and the vacant Fannie Mae parcel from the City's Housing and <br />Redevelopment Authority (PA covers both parcels). In addition to acquisition of the HRA's parcels, they <br />will need to purchase another parcel from Apache Redevelopment LLC (Len Pratt) in order to <br />accommodate the development of 152 unit of senior rental housing. <br />Based upon the above referenced development program, following is a listing of the proposed business <br />terms I'or the final Development Agreement: <br />1. Land Use <br />a. Income and Rent Limits Dominium covenants and agrees to rent at least 20% of the units to <br />seniors at or below 50% of the Area Median Income (AMI). <br />2. Acquisition <br />a. Closing. Dominium will acquire the land no later than March 1, 2013. <br />b. Purchase Price. The proposed purchase price is for $1,216,000 which equates to $8,000/unit. The <br />HRA's portion of the land sale proceeds are 52.88% of this amount, or $643,021. Dominium will <br />enter into a purchase agreement with Len Pratt for the adjacent property for approximately <br />$572,979 or the remaining 47.12% prorated portion of the $1,216,000 purchase price. <br />c. Purchase Price Adjustment. Dominium represents that the estimated construction costs of the <br />project are $13,951,371. When they receive their Certificate of Occupancy (CO) they have to <br />provide the City an audited construction cost statement. If based upon this statement (and the <br />receipt of any other grant sources), the actual construction costs are less than $13,951,371, then <br />Dominium will increase the payment for land to $10,000/unit. This means that if either cost <br />savings or grants equaled or exceeded $304,000, the City and Mr. Pratt would be reimbursed <br />this amount on a prorated basis accordingly (up to $160,755 for the I -IRA and up to $143,245 <br />for Len Pratt). If the amount was less than $304,000, then the City and Len Pratt would be <br />reimbursed at the lower level accordingly (i.e. savings of $200,000 would be prorated back to <br />the City and Len Pratt in the amount of $105,760 to the HRA and $94,240 to Pratt). <br />w, C O C p �+ 3060 Centre Pointe Drive <br />G /7 GIt�7 <br />`O� Roseville, MN 55113-1105 <br />"y'crv?K LEADERS IN PUBLIC FINANCE Ph 011e: 651-697 8506 <br />Fax: 651-697-8555 <br />skvilvang@ehlers-ino.com <br />