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David Flaherty discussed the benefits of taking ownership rather than being a secondary lender, and noted that PNC has not moved on its position regarding not allowing secondary lending. He believed that the option to take ownership would give the City more power than being a secondary lender, and explained that lien waivers would be obtained prior to the City of Ramsey contributing the funds. Thomas Bray, Briggs and Morgan, stated that his firm handles a fair amount of mezzanine financing and noted that the market has been split 50/50 regarding the issue of second mortgage versus mezzanine lending. He explained the pros and cons of both options. Stacie Kvilvang, Ehlers and Associates, explained that mezzanine lenders often charge a higher rate of interest because of the risk. She further explained the risk and the TIF district revenue. She discussed the rental rates and the PNC agreement, and confirmed that dates could be changed in the PNC agreement to better reflect the actual construction timeline. She provided the revenue projections for the Allina and VA facilities in regard to TIF district revenue. There was discussion on the difference between mezzanine lending and the option of holding a second mortgage, along with the potential risks associated with both options. The Commission also discussed TIF District revenue and possible uses for those funds. It was also noted that this apartment project could bring in an additional 300 residents, which could be very favorable in attracting additional businesses to The COR. Stacie Kvilvang explained the guidelines for using housing revenue bonds and confirmed that use of those bonds would remove the property from the tax roll. Consensus was reached for staff to continue to work on this agreement and to move forward with the PNC financing option presented tonight. Chairperson Elvig briefly recessed the meeting at 8:51 p.m. Chairperson Elvig called the meeting back at order at 9:00 p.m. Case #2: Consider Matters in Regard to the Ramsey Town Center Master Declaration and the Association's Articles of Incorporation (Portions may be closed to the public) HRA Executive Director Nelson reviewed the staff report. She suggested the meeting be moved to closed session to discuss potential litigation. Motion by Commissioner Ramsey, seconded by Commissioner McGlone, to move the Housing and Redevelopment Authority meeting into closed session. Motion carried. Voting Yes: Chairperson Elvig, Commissioners Ramsey, McGlone, Tossey and Wise. Voting No: None. Absent: Commissioner Backous. The Housing & Redevelopment Authority meeting moved into a closed session at 9:03 p.m. Housing and Redevelopment Authority / August 15, 2011 Page 3 of 5