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HRA Special Session Date: 01/25/2011 By: Heidi Nelson Administrative Services The language from the development agreement is below: CONTINGENCY FOR RAIL STOP Information Item #: 6. 2. Title: Consider Waiver of Rail Station Contingency for Flaherty and Collins - The Residence at The COR Project Background: On December 14, 2010, the HRA approved a purchase agreement and development agreement for the Flaherty and Collins - The Residences at The COR project that will be located west of the parking ramp. One of the contingencies of the development agreement was the requirement for both parties to waive their contingency for the Ramsey Rail Station by January 28, 2011. Significant progress has been made between late December to date regarding the funding for the project and moving towards a spring 2011 groundbreaking. City Administrator Ulrich will provide an update to the HRA regarding the status of the funding, the easement with BNSF, and the construction timeline for the station during the meeting. Following that udpate, the DM team is seeking direction with regard to the HRA's desire to not waive the contingency. The issue at hand for the HRA is that the opportunity to not waive this contingency and cancel the agreement will expire on January 28, 2011. If the contingency is waived or no action is take to not waive the contingency and cancel the agreement, the City is then committed to constructing the parking ramp expansion. The subsequent issue for the City then becomes proceeding with the process to begin the construction of the ramp, understanding that if some contingency were exercised by Flaherty and Collins at a subsequent date, the City may desire to stop the process to begin construction on the ramp. There are other contingencies that could be exercised by Flaherty and Collins in the upcoming months with regard to their financing and the due diligence period. Section 9.1 Contingency for Rail Stop. At any time on or before January 15, 28, 2011, the City or Developer may terminate this Agreement by written notice to the other and to the HRA and they are not comfortable that the City will secure a stop on the North Star Commuter Rail line and complete construction of a rail stop on or before July 1, 2012. Upon such termination, the parties will have no further rights or obligations to the other parties under this Agreement except with respect to rights or obligations that this Agreement expressly states are to survive the termination of this Agreement. At the time of the preparation of this case, staff was awaiting the executed documents from Flaherty and Collins. Staff hopes to have those executed documents in hand prior to Tuesday night's meeting. Recommendation: Staff recommends that the HRA review the status of the Rail Station and direct the DM Team with regard to waiving or not - waiving the Rail Station contingency. Funding Source: Funding source for the city portion for the construction of the ramp is anticipated to be provided with TIF proceeds from the new district, however, that source will need to be finalized prior to proceeding with the project.