CCP 01-11-2011 - Laserfiche WebLink

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December 14,2010 Page 4 of 6 districts.The developer will provide a minimum of$4 million in cash equity. The total development cost is $19.4 million,about$156,000 per unit. The anticipated tax value is between$110,000 and$115,000 per unit. The City will be receiving park dedication funds up front A look-back provision is included in the agreement. If the property is sold before 2022,the developer would be required to complete and internal rate of return analysis. If the IRR is greater than 16%;then anything above this amount would be shared 50/50 with the City. The developer has requested the exclusive right to develop Block G(the adjacent block)with the following conditions:(1)A Market Feasibility Report to be delivered by January 1,2013.(2)Provide a preliminary plan for proposed development by June 30,2013.(3) Must submit a final plan approval,execute a purchase agreement and have permits and financing guaranteed by December 31,2013. The Enhanced Services Cost Sharing Agreement was explained. The City has requested the developer and the benefiting residents assist with the costs associated with the maintenance costs in the immediate area. The Public Works/Engineering staff is preparing an estimate. The Subordination issue will come before the Council in January. The developer's lender will want the City to subordinate it's agreement to a first mortgage,Director Femelius explained this is a common issue. The city will need to negotiate acceptable language by the January 11,2011 council meeting. The schedule was reviewed: December 21,2010 Planning Commission will review the land use January 11,2011 City Council will consider Land Use March 2011 Construction Plan review June 15,2011 Closing Date June 30,2011 Deadline for construction to begin December 15,2011 Disbursement of teiiiaining cash assistance December 31,2012 Completion Date December 31,2013 Development rights to block G must be exercised Director Femelius stated this has been a lengthy process,and is pleased with the quality of the building,and believes the project will benefit the Northwest Quadrant in a variety of ways. Councilmember Phillips expressed his gratitude to City Staff and Stuart Companies for the work on the contract, and was pleased to see the modification in the payment terms. Councilmember Samuelson questioned if the length of time between the groundbreaking and completion is typical. Director Femelius noted it will take that long to complete the building and the 120+units. Councilmember Bauman also expressed appreciation for the change in the payment terms and questioned the language on page 10 of the agreement,relating to the conveyance. George Hoff(legal counsel)explained this is typical real estate closing language. Councilmember Bauman commented that this project looks to be different from other apartments in the City;as it appears to be higher end,but still has concern with over 30%apartments in the City.Councilmember Bauman asked Mr.Nolan if they tend to have more long-term residents in their current properties,and if there are plans for parcel G? Mr.Nolan stated they have a vested interest in what would be in close proximity to their project, and for that reason they would like the opportunity to develop block G. Mr.Nolan reported they don't like turnover either,and generally higher end rental housing tends to have more long term residents. Councilmember Bauman reported she was hopeful that this project will be a first step to additional development Councilmember Baumann questioned the valuation process,and why there's not a minimum. Mr.Nolan reported he hopes to be fairly assessed with other comparable properties in the Twin City area. Mayor Jacobsen noted this is an exciting project,and it is good to see progress in the Northwest Quadrant. Also the Mayor noted a high end property will be unique to the area. Mayor Jacobsen commented he was impressed with Mr.Nolan's confidence as he has given the project his personal guarantee. Motion by Councilmember Phillips,seconded by Councilmember Burg to adopt the attached resolution authorizing the Mayor and City Manager to execute a Development Agreement by and between the City of New Brighton and The View at Long Lake,LLC.