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Development Manager Lazan stated this budget and development scenario assumes the worst - case scenario with no deal on Lot 3 but if it proceeds in January, the budget would be flush. He stated this past week he vetted the other lot purchasers. SuperAmerica will close tomorrow and he expects that the improvements will be made. Commissioner Strommen stated she preferred to take the time to fully vet whether the HRA is in a delay scenario and what that will mean with potential purchasers. Development Manager Lazan stated he can detail the option of delay but has strong belief that SuperAmerica will close and provide proceeds to fund some of the costs. In addition, McDonalds indicated it would execute and hopes to start construction this winter with a spring open. Commissioner Strommen asked about the development management fees if the sale does not close. Development Manager Lazan explained the development management agreement has dollars due when a project is put under agreement with adequate earnest money placed to cover those payments, fees at closing, and fees at occupancy. He noted it also indicates: "or as we choose to arrange otherwise." Landform is asking the HRA to consider compensation on work it has done to date to pay $25,000 of the fee (40 %) as part of this project moving forward with credit towards the deal on Lot 3. This is asking for consideration of $10,000 of the capital improvements and for work with Solomon over the last year, which was considerable. Commissioner Strommen stated she missed that was being asked of the HRA in the budget. She asked if the Solomon coordination was necessary to facilitate the other projects. Development Manager Lazan stated it was not because the building could have been backed to their building but the City set the course to work with the developer who has endured through thick and thin to make it work. He indicated Solomon would acknowledge that Landform went above and beyond to restore that relationship from a potential litigation to them being pleased with the outcome. Commissioner Elvig stated this is considering a "half step" and he has no problem with the dead end scenario because it provides additional parking. Development Manager Lazan advised this configuration is typical in pad -ready developments to narrow the choices. He reviewed the decision making process and indicated there is a commitment to Solomon to let them re- engage the building fronts and this new parking lot opens more possibilities in being able to flip parking from Lot 2 to Lot 3 and to relieve parking congestion. Development Manager Lazan noted Solomon wants to keep sight lines open to its building. Commissioner Elvig stated he understands the benefit of having alternatives figured out and that this is where the pad will be located but he is concerned about putting down this much Housing and Redevelopment Authority / October 16, 2012 Page 6of11