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APPROVAL OF MINUTES Motion by Commissioner Ramsey, seconded by Commissioner Wise, to approve the following minutes: HRA Meeting Minutes dated November 1, 2011 HRA Meeting Minutes dated November 22, 2011 HRA Meeting Minutes dated December 6, 2011 HRA Meeting Minutes dated January 10, 2012 HRA Meeting Minutes dated January 17, 2012 HRA Meeting Minutes dated January 24, 2012 Motion carried. Voting Yes: Chairperson McGlone, Commissioners Ramsey, Wise, Backous, Elvig, Strommen, and Tossey. Voting No: None. HRA BUSINESS Case #3: Adopt HRA Resolution No. XXX Authorizing Sale of Bonds for The Residence at The COR — Flaherty and Collins and Debt Subordination Agreement for PNC Bank Financing HRA Executive Director Nelson reviewed the staff report. Tom Bray, Biggs & Morgan, presented his memorandum dated February 22, 2012, detailing the Debt Subordination Agreement, remedies available to the HRA under the Purchase Agreement, Development Agreement, Loan Agreement, Promissory Notes, Pledge Agreement, Guarantees, and described the Debt Subordination Agreement impacts on those remedies. Commissioner Elvig stated this was discussed during the Work Session, has been under considered for two and a half years, and probably the best deal the HRA will get on this project. He indicated he had voted in support of this project but was concerned that in the Subordination Agreement, PNC took first position. Commissioner Elvig felt the "bottom line" is that the Agreement does not contain many remedies the HRA can comfortably exercise without placing itself in further jeopardy. He was also concerned about the provision for mezzanine financing and had hoped the Agreement would have been perfected to incent Flaherty & Collins to make equity puts. He asked the development team what it can do, at this point, with Flaherty & Collins to better the HRA's position and perfect the payment since that cash is imperative to collect. Development Manager Lazan stated it is important to address where we are at in discussions. He indicated the HRA has a development/purchase agreement in place, and approved, which has been presented to Flaherty & Collins and PNC as final approved documents and incorporated into loan documents. Development Manager Lazan advised there was only a limited amount of trading the HRA can do at this point. He explained the items in the Subordination Agreement impact those documents but one area they can address is providing stronger assurances on capital contributions. It was noted Flaherty & Collins is ready to close this Friday. Housing and Redevelopment Authority / February 28, 2012 Page 2 of 7