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Deputy City Administrator Nelson reviewed the staff report. Commissioner Elvig questioned the provision of administrative compensation. Deputy City Administrator Nelson explained the previous contract provided for compensation for five years past the contract. The Commission requested this provision be changed. With the new language and changing the fee to an administrative fee, this compensation was reduced to being payable 3.5 years past the contract. Also, the hot list component has been omitted. Commissioner Elvig brought up the potential of having someone purchase the entire project. Development Manager Lazan would be compensated in that case. Development Manager Lazan responded that had not been a consideration in revising this contract. He said language that addresses that potential will be worked into the contract. Deputy City Administrator Nelson noted this is addressed in part on Page 12 of the agreement and will be reviewed by staff. She discussed the Incentive Compensation of 20% as addressed on Page 8 of the contract. Development Manager Lazan explained if 10 deals are in the works and one goes through, he'd be paid on that one, as it is written now. This is difficult to make a living on. He suggested some funds be moved to contract signing, and less at close so there is some compensation for work performed. Deputy City Administrator Nelson stated the carryover compensation has not been changed and explained how the compensation amount had been determined. Commissioner Backous stated he disagrees with how this entire process was handled. Typical negotiations should be on this side of the table without the contract and presenting it to the contractor and let him counter propose. That being said he is satisfied with the way things are. He noted a couple concerns, one being the two year contract, which in his opinion was irresponsible. He said he would rather go forward on a one year contract and revisit in a year. He added he would like to see the administrative compensation changed to $5,000 and a draw of $20,000. He said he would also like to put the risk on Landform to move the property. Commissioner Elvig inquired why the City does not go for RFPs. He noted a lot of constraints are now out of the way and he felt the project is now very saleable on an RFP. He also disagreed with a two year contract. Commissioner Tossey clarified what the compensation would be if the contract was renewed for two years, but terminated in August, for instance. Development Manager Lazan replied there is an early termination severance. As it is today, it is for four months, or $60,000. The administrative component is added to that. The amount of time the earnings are payable is 15 months after the contract. Housing and Redevelopment Authority / March 22, 2011 Page 2 of 5