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Council Meeting Minutes December 19, 1985 I Larry Smith, representing Housing Alliance, distributed a pro-forma for the which demonstrated the need for this project which is neither a Section 8 nor 202 for federal subsidy. Smith explained how income is distributed, indicating there is no extensive profit for the project. Smith further stated it is quite difficult to offer services and, at the same time, keep the rents below what would be comnonly available to a working family. Houslng Alliance is requesting a contribution from the City of $39.98 per unit per month on the average. Harcus ~uestioned the cost of land for $400,000 for 2.3 acres. Smith indicated they calculate $5,500 per unit; Winkels estimated the land cost to be $4 per foot. Harcu5 expressed concern about deviating from our history for the criteria of bond issuances and would, therefore, like an indepen- dent review from a real estate developer. Benke asked if our bond counsel had real estate expertise on its staff; O'Meara indicated they did not. I Benke asked for clarification as to whether or not a delay in the Development Agreement would delay the project. Smith stated a delay would create a real problem; the City's approval of the Development Agreement guarantees that Housing Alliance has a project and they could then move forward with the proposed project. Blomquist inquired about the cost for liabilities, the allocation for development overhead, contingency for construction costs, sales and marketing expense, in relation to this project and industry standards. Smith responded they first apply an allocation per unit for land, which is an industry standard, and is applicable to senior housing; giving consideration to density and zoning requirements. Benke asked Winkels if the quoted price for the land is reason- ble; Winkels responded that $4.00 per square foot is not a bar- gain, noting that property in the Brighton Square Shopping Center area is $3.50-$4.00 per square foot and this price is reflective of the shopping center, the park, and the bus line; indicated that our financial consultant, Miller & Schroeder, feels the level of assistance for a project like this is what has been found in other places. Winkels stated further that this request for assistance is lower than others in the metropolitan area, which are from 50-100% higher than this request. I Page Five