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CSI Redevelopment Agreement June 2, 2014 — Special Meeting Report Page 3 Fees: Ryan on CSI's behalf will pay all of the customary fees (i.e. building (No Change) permits, SAC /WAC and park dedication) that are required of a typical development. Remediation / At closing, the City will deposit the land sale proceeds ($500,000) into Public an escrow to help pay for the public improvements and site remediation/ Improvements geotechnical costs. Right now, the current cost estimate and /or bid (Change) amount is $900,000. On May 6th, staff discussed with Council an offer by Ryan to share in the costs above the land price up to a maximum of $350,000 each or $700,000 ($1.2 million in total). CSI was initially concerned about what might happen if the costs exceeded $1.2 million and wanted no cap on City or Ryan participation. In addition, the company did not want to participate in any environmental cost overruns. During these discussions, Ryan and the City reached out to DEED for help and the agency offered an additional $250,000 toward site costs. The DEED money increases the available budget by $250,000 ($1.45 million) and will be spent site costs. After several rounds of negotiations, CSI finally agreed to a cap on costs, with some additional participation by all three parties. In the event, the costs exceed the escrow ($1.45 million), CSI, Ryan and the City will split up to $500,000 of cost overruns ($167,000 each). If the costs exceed the overrun, the parties agree to discuss what happens next. However, a key point for the City is there is no obligation to contribute more beyond what has been committed. Net -net this provision sets a cap (City demand) and limits additional participation to a maximum of $167,000. Ryan and CSI would participate equally ($167,000 each)in any cost overrun, as described above. Minimum The City was demanding that CSI enter into a Minimum Assessment, but Assessment we did concede this point for better language on the Option Parcel. Agreement (Deleted) Option Land: CSI was initially demanding an option for up to 4 acres of land on Block (Change) E with no development strings attached. In other words the company, could buy the property, but did not want to be obligated to do something with the land. The City was offering up to 2 acres, but only if CSI I: \COUNCIL \REPORTS\2014 \Community Development \6 -2 -2014 special \CSI Project - Redevelopment Agreement (Staff Report- V4).doc