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Development Manager Lazan reviewed the staff report and answered questions of the HRA relating to the limited value of the properties under discussion due to drainage and utility easements. He clarified the properties could accommodate drives, parking, patio, and /or signage. The HRA asked questions of Development Manager Lazan related to cash flow and development fees, requesting he provide that information to assure the project cash flows. It was noted that staffs recommendation results in an exception to the allocation policy by keeping sale proceeds from the Wise purchase in "play" to make improvements. Development Manager Lazan encouraged the HRA to consider the three lots as one project, noting once improvements are completed and the three lots are sold, land sales will then disburse. This recommendation results in deferred allocation of $750,000. The HRA discussed and questioned ownership of the stormwater facility that would serve the three lots. Development Manager Lazan noted the location of public sewer and water mains that would be covered by public easements managed by the City. He described the private storm sewer system and established concept that the first person in takes the lead on that maintenance and has the right to recoup costs from the other two lots. To avoid overhead costs of an association, the private utility easement would spell out maintenance requirements, prescribed controller, rights of reimbursement and recourse, provide the City with right to inspect and perform, if needed, and be recorded with the property. City Attorney Goodrich noted the need for additional escrow to address the option in the purchase agreement for rent reimbursement. Motion by Commissioner Ramsey, seconded by Commissioner Elvig, to approve the proposed allocation of development fees and construction costs and direct the Development Team to incorporate necessary language into the current purchase agreements. Further discussion: Commissioners Strommen and Elvig stated the caveat of receiving the final cash flow numbers including development fees. Motion carried. Voting Yes: Chairperson McGlone, Commissioners Ramsey, Elvig, Backous, Strommen, and Tossey. Voting No: None. Absent: Commissioner Wise. Commissioner Wise returned to the HRA dais at 9:31 p.m. 5.04: Consider Policy for the Replacement of Streetscape Disturbed by Construction Development Manager Lazan reviewed the staff report and answered questions of the HRA relating to estimated costs depending on the scope of the project and types of streetscape involved. Housing and Redevelopment Authority / August 28, 2012 Page 3 of 7