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USA, LLC desires a status update related to the Stage I Improvements. With that in mind, this topic report has been prepared for discussion only at this point, as the next available HRA meeting is not until April23, 2013. Alternatives Alternative # 1 - HRA Awards Contract to Construct. This alternative would allow the HRA the highest degree of control over the Stage I Improvements, but does require that the HRA be responsible for the initial cost of the improvements. It would be anticipated that the cost of the improvements could be recouped through land sales of the development. Staff advises the HRA that construction on the improvements should not commence unless timed in conjunction with closing of a parcel within the Plat that provides the necessary capital to construct the improvements. Additionally, this process would require that the HRA authorize an advertisement for bids and awarding of a contract. The advertisement for bids would likely be a 3-4 week period before a contract could be awarded. Assuming the HRA would motion to direct Staff to advertise for bids on April23, 2013, a contract could be anticipated to be awarded at the end of May or early June. Additionally, Staff will need the lead time prior to the April23rd date to review the current pro -forma to ensure adequate cash availability. Alternative #2 - HRA Requires Buyer to Construct. Currently, the HRA has an active real estate contract with McDonald's USA, LLC. The existing Purchase Agreement with Super America necessitates a renewal due to original deadlines that were part of that agreement. Staff would need additional time to negotiate these terms with one of these buyers. This would have a cumulative effect on current and future agreements with buyers of the three (3) COR TWO parcels. Alternative #3 - HRA Chooses Not to Construct Improvements. If the HRA chose not to construct the improvements or would not be successful in negotiating with a buyer to construct the improvements, the City would not authorize the Plat to be recorded. It appears that there would be a default with the real estate contract with McDonald's USA, LLC. Staff would need more time to discuss with legal counsel the liabilities of said potential default. Recommendation: Legal Counsel has advised the HRA that the preferred scenario for the Stage I Improvements is for the HRA to complete said improvements, if the HRA is to honor the terms of the existing contract with McDonald's USA, LLC (Alternative # 1), and to have the most control over the installation of the improvements to ensure there completion. It has been anticipated costs of the improvements are to be allocated to the three (3) new lots created with the Plat as part of the sale of property. Funding Source: Funding for the Stage I Improvements would come from the proceeds of the sale of property. Staff would advise the HRA not to proceed forward with the Stage I Improvements unless in conjunction with closing of land within the COR TWO plat. The HRA fund currently does not have sufficient funds to complete the improvements unless land proceeds are captured. A more detailed financial analysis, including determination of net proceeds (gross proceeds minus HRA costs) will be provided with any request to advertise for bids, which is anticipated for April23, 2013. Action: There is no action being requested at this time. This topic report is for informational and discussion purposes only. Staff anticipates forwarding a request for action to authorize an advertisement for bids on April23, 2013 in order to honor the terms of the current real estate contract with McDonald's USA, LLC, and to prepare the other two parcels for sale. Attachments Plan Set for Improvements Cost Estimates Cost Estimates Overall