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Development Manager Lazan presented the original proforma. Finance Director Lund stated she has only seen a $2.4 million developer fee. Development Manager Lazan clarified that is a fee paid to the City. HRA Executive Director Ulrich agreed the developer fee and developer's overhead are two separate fees. Finance Director Lund reviewed the amounts and purpose of each. Commissioner Elvig stated it was his understanding there are typically development fees paid to the City, developer's fees paid to themselves as a profit on the project, and overhead that pays themselves a rate for staff and things like the construction trailer. A developer fee is their profit and he does not want that paid until the HRA gets paid back. Commissioner Elvig stated PNC Bank had agreed to this and that was about $3 million. Now the developer fee is $1.2 million so he would like to see if the developer overhead also came down so they did not need that $500,000. Development Manager Lazan stated the HRA had reviewed the model containing all the fees and costs and the only fee to the developer was $970,000. PNC Bank originally required that all to stay in but have now agreed to advance one-half of that amount to the City so F&C will be into PNC Bank money faster. Chairperson McGlone stated he does not care if they use $500,000 to pay down the loan and get to the Bank's money faster. Commissioner Backous stated he did not approve of giving those dollars in the first place but his goal is to get the HRA's money back. He stated he understands Commissioner Elvig's concern there may be a "shell game" moving money around but if they are giving back $500,000 sooner, and will owe the HRA $500,000 less, he would agree with the request even if the HRA makes less interest. Chairperson McGlone agreed the request will result in the HRA getting its money back faster. Commissioner Elvig stated he would like to see an audit between what we initially signed and schedule of values to get a better understanding. Development Manager Lazan stated that was done when the original draw schedules were set up. Commissioner Elvig stated the HRA needs to compare the documentation to see if funds have been switched. If that is the case, the sources of uses will also be changed. He felt the City Council had a financial obligation to look at it internally and the HRA should also sign off on it. Housing and Redevelopment Authority / October 2, 2012 Page 4 of 9