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<br />Compensation <br /> <br />There has been considerable discussion on the issue of compensation as it relates <br />to the development manager. While it is critical to ensure that the City of Ramsey <br />receives the greatest value for its investment, it is important to understand some basic <br />constraints, <br /> <br />Compensation for these services typically fall into two basic forms - fee-based <br />compensation or incentive-based compensation. These two approaches fall at either <br />end of a continuum with fee-based agreements typically relieving the consultant <br />of much of the risk associated with a project and generally providing adequate <br />compensation for their efforts, At the other end of the scale is incentive-based <br />compensation, adding the element of risk on the consultant who generally will require <br />greater compensation when they perform in exchange for that risk, <br /> <br />We know through our efforts to date that: <br />· The City of Ramsey is looking to maximize the return on this development to <br />recapture their investment but also to fund a higher level of public amenities <br />within the project. This suggests the City would prefer to shoulder the risk for <br />additional return to be applied to the project. <br />· The City prefers to see progress on the site paced with the expenditures they <br />incur which suggests they would like to see a more reward-based component to <br />this agreement. <br /> <br />After considering these factors, we would propose continued discussions toward <br />a compensation basis that is a hybrid of the two forms, splitting the fee into two <br />categories: <br /> <br />Administrative Services <br />· These are the fee-based services required to coordinate the daily efforts of the <br />team and the reporting necessary, These may include but are not limited to: <br /> <br />o Attending City meetings <br />o Preparing regular reports <br />o Maintaining financial components <br />o Maintaining schedules <br />o Coordinating RFP/RFQ efforts <br /> <br />Disposition Services <br />· These are the incentive-based services related to the deal-making and disposition <br />of the property either as a whole or by parcel. The development manager would <br />complete these efforts at-risk with compensation coming from the proceeds of <br />each sale based on total land or development costs, Expenses associated with <br />these efforts would be reimbursed but tracked within the overall project budget. <br />These services may include but are not limited to: <br /> <br />18 <br />