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Motion by Commissioner Ramsey, seconded by Commissioner Tossey, to approve the purchase agreement for Lot 4, Block 1, COR TWO, subject to final modifications by HRA Counsel and Adopt Resolution HRA #12 -10 -014 Authorizing the HRA Chair and Executive Director to execute the agreement and all other documents necessary to close. Motion carried. Voting Yes: Chairperson McGlone, Commissioners Ramsey, Tossey, Backous, and Strommen. Voting No: None. Absent: Commissioners Elvig and Wise. Commissioner Wise returned to the HRA dais at 9:14 p.m. Development Manager Lazan displayed a slide depicting the McDonalds Restaurant site, reviewed the components of the concept design, points of access, and rationale for constructing a roundabout to prevent backups onto the County road systems and assure all retail uses can be viable. 5.02: Development Management Compensation Development Manager Lazan reviewed the staff report and development management compensation worksheets, noting portions are paid on a monthly basis and portions on an incentive basis for projects under contract, closed, and constructed. The incentive based payments are based on development value (land sale proceeds, hard building costs, hard site construction costs, soft development costs). He requested approval of the first three compensation requests: McDonalds, SuperAmerica at Armstrong, and SuperAmerica at Ramsey Boulevard. HRA Executive Director Ulrich stated he had reviewed these three compensation requests and found they were in accordance with the contract. It was noted the Development Team comprises the Deputy City Manager (which is being removed from the contract), Development Manager Lazan, his partner, and the. HRA Executive Director. In response to the HRA's questions related to whether the proforma will fluctuate once the project is constructed, Development Manager Lazan explained that was a source of discussion at contract negotiations. He stated the concept is to prepare the best possible proforma numbers when the deal is prepared to close. If there is significant change between closing and construction, it can be negotiated. HRA Executive Director Ulrich advised the development fee is paid 20% at purchase agreement, 60% at closing, and the final 20% at occupancy. Commissioner Backous asked HRA Executive Director Ulrich if he saw problems administering capitalized cost since it can change over time. He also asked what is considered `significant," perhaps 5 %. HRA Executive Director Ulrich stated practically the capitalized costs are subjective so there may be negotiations on what a "significant" change is for these smaller projects. He noted the Housing and Redevelopment Authority / October 23, 2012 Page 3 of 7