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sufficient because it would be far too easy for someone to create a package contract that calls for brokerage and other services. HRA Attorney Bray stated he disagrees with the Landform attorney on that point. The second point the Landform attorney seeks to make is that there is distinguish between soliciting development proposals and purchasers of land. He advised that the definition of brokerage services under Minnesota law is very broad, indicating any negotiation for sale of land, and these development proposals do involve the sale of land. HRA Attorney Bray felt it was fair to say the services Landform provided under the Purchase of Services Agreement exceeded brokerage services but a component was a brokerage service. There is no case law directly on point, but he does not see that argument as being persuasive to a court. HRA Attorney Bray stated the third argument by Landform's attorney is that the Purchase of Services Agreement contemplated a team approach including members of the HRA and City staff and that under Minnesota law, a member of a municipality does not need a brokerage license and can engage in negotiations and sales activities on behalf of HRA without violation of the Statute. HRA Attorney Bray stated the question is how engaged was City staff and Landform employees, in particular Development Manager Lazan. HRA Attorney Bray advised the Landform attorney says there is nothing wrong with the incentive compensation structure, and that if someone is being compensated based on a percentage of land or development cost, it may look like typical brokerage compensation but there is no reason it couldn't be used to pay for non - brokerage services. HRA Attorney Bray stated he thinks the ultimate question is what did Landform do and based on his impressions in several transactions, Development Manager Lazan was the primary point of contact with the prospective developer, possibly constituting brokerage services. HRA Attorney Bray stated where he differs from the two memorandums, is to think there is an open question. If you assume brokerage services were provided and Landform is not entitled to recover some component of the compensation provided, the question is how do we calculate that portion. The unattributed memorandum concludes the HRA should pay no compensation but he believed that was too broad. The Huberty memorandum concludes the HRA should not pay any incentive compensation but he believed that was also too broad. On the other hand, there is no precise basis on which to advise the HRA what portion is fairly contributed to the brokerage services that Landform should not be entitled to recover. HRA Attorney Bray explained that one approach is to say if the HRA had, in the beginning, tried to set out a compensation mechanism for brokerage service, what would it have done. Typically, brokerage fees are 7% of land costs and sometimes are higher for raw land. He felt 7% was a reasonable "rule of thumb" for typical compensation for brokerage services. HRA Attorney Bray asked what would then be a fair part of compensation to withhold. He stated if it is determined that a portion of the services Landform provided are brokerage services and not entitled to recover, a question is whether the HRA can elect to pay those amounts anyway or would it be violation of the law. HRA Attorney Bray advised there is not much in terms of case law, noting Chapter 82 does not say you cannot have a contract with someone without a brokerage license, or it is void, but says a person cannot bring action in Minnesota Court to collect compensation if they do not have a required license. However, the parties could agree to Housing and Redevelopment Authority / April 9, 2013 Page 3 of 9