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Observations: The HRA's decision not to complete the transaction with M&W Holdings does not relieve it's obligation to perform under agreements with the other three parties in the development, and accordingly must consider an alternative approach to that which was outlined previously where M & W Holdings was completing those obligations under the agreement approved at that time. Essentially, the HRA must now step in to the role outlined in the agreement and perform the initial improvements as outlined. This not only involves the construction of the improvements, but also the preparation of plans and specifications, construction administration and surveying, and the revisions to all the existing real estate documents, easements, covenants, restrictions, and ongoing maintenance obligations of the development. Once an eventual buyer for Lot 3 takes possession, the proceeds realized from that sale will recover some of these costs, and the buyer will assume all ongoing maintenance obligations. The costs associated with this effort is outlined in the attached exhibit. Failure to perform on the obligations outlined would result in a default on existing agreements on Lot 5, a potential loss of the sale on Lot 4, and significant degradation of the relationship with Sophia Ramsey, LLC. The likely outcome of these defaults would be considerable additional costs to the HRA. Recommendation: The development team recommends the HRA perform on the obligation outlined in the agreements associated with the development of the Sunwood Retail area, and ask the HRA to direct the development team modify all necessary plans, specifications, and legal documents as necessary, and perform on the obligations outlined in those agreements. The development team recommends the HRA proceed with the approval and execution of the Development Agreement with the City and perform on the obligations therein as outlined in the case to follow. The development team recommends the HRA proceed with the recordation of the final plat and all related documents as outlined in the case to follow. Funding Source: Future Land Sales Council Action: Approve the alternative development scenario outlined in the case and based on discussion, and direct the development team to proceed with the effort to assume the responsibilities related to the development and construction of the initial improvements. Approve the revised budget for expenses related to the revision of documents necessary to perform on contracted obligations. Approve the work order from Landform in the amount of $58,100 to provide all necessary plans, specifications, construction administration, and construction staking necessary to complete the project. Attachments Prelim Budget Executed PA - Lot 5 Work Order for Professional Services