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Pulte Homes Agreement June 7, 2013 Page 3 Timing: Pulte will start the initial site work(including remediation)this fall and install about half of the public improvements. They will start construction on a model home by December 15, 2013 and have all units (including townhomes) finished by December 31, 2018. Due Diligence: Pulte will have 120 days from execution of the redevelopment agreement to conduct due diligence. This would include all City land use approvals (i.e. PUD, plat, zoning amendments, etc.) and MPCA approval. While ambitious, this keeps the pressure on Pulte to stay on schedule. Master Pulte will create a master association to handle the maintenance of Association: common areas within their private development. In addition, they have agreed to take on some of the responsibilities for the main entrance and north entrance; and the boulevards along Old Highway 8. This will help reduce the City's future maintenance responsibilities. Fees: The developer will pay all of the customary fees (i.e. building permits, SAC/WAC and park dedication)that are required of a typical development. Environmental: This is one of the areas that Pulte needs to explore further. The company needs to work with the MPCA to gain approval of its development plans. It is unclear how long this might take. The Redevelopment Agreement grants Pulte site access to conduct invasive testing and apply for environmental liability assurances from the agency. If these assurances can't be provided, it would be a basis for Pulte to withdraw their offer and earnest money ($50,000). The other issue of note is that Pulte is on the hook for any costs that exceed the escrow of$1.0M, which limits the City's exposure under the project. Other Issues The parties spent a great deal of time working on a provision known as a right-of-reverter,which was ultimately struck from the agreement. This provision has been in some of the City's previous redevelopment agreements, but was removed in the negotiations. A right-of-reverter is a legal mechanism(albeit complicated and time-consuming)that allows the City to re-take title of the property in event of a default. In this case, Pulte is paying cash for the land and installing all of the remaining public improvements. Pulte will invest upwards of$6.0M into the site and provide financial security for the public improvements. In short, if Pulte were to walk from the project the City would still have the land payment and funds to install the public improvements. I:\COUNCIL\REPORTS\2013\Community Development\6-11-2013\Pulte Redevelopment Agreement doc(Staff Report- V 11).doc