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was executed by the HRA and he felt it was fairly definitive in how compensation is to be calculated and when it is due. Mr. Lazan stated the contract was in place from 2011 to 2013, it had been extensively negotiated, and it was determined that it needed to be more specific so the worksheet was developed. He stated the worksheet, specific to this project, determined the costs for the fee was $51,441. Mr. Lazan stated the worksheet is presented at the same time as the project is considered and when the McDonald's deal was approved, that number was in the deal and was unanimously approved by the HRA as the specific fee for this contract. Mr. Lazan stated the fee was based solely on private development items needed to serve the McDonald's project. He noted that in the October 23, 2012, HRA minutes, the HRA Executive Director indicated he had reviewed the numbers and found they were in compliance with the contract. Mr. Lazan indicated that per the contract, once approved, the compensation is final, only subject to subsequent phasing or terms. Mr. Lazan stated his opinion that there have been no changes to the project, phasing, or terms. He stated he had been part of the negotiations and the intent was to specifically address a situation should a project come forward with two buildings and then later the project is changed to one building. He stated that would be a substantial change. Mr. Lazan asserted that the McDonald's project did not change substantially in terms and the HRA had to contribute the same improvements as part of the deal. He stated Landform completed the work on the plat, coordinated the legal, and facilitated the design in good faith based on an approved development fee worksheet that was designed to produce the finality. Mr. Lazan stated in October of 2013 an invoice was sent for partial payment when due diligence was complete and the contract requires the HRA to object within 25 days of the invoice being presented. He stated the HRA expressed no concerns but now at closing, the HRA has indicated it wants to renegotiate the deal, which is not appropriate or allowed by the contract. Mr. Lazan stated there are no allowances in the contract to revisit the development management compensation based on actual costs. It is all based on the proforma, not project costs or real costs. He stated 80% of this compensation is now past due and it appears the HRA is proposing to re- discuss this and make unilateral revisions without notice to Landform. Mr. Lazan stated they set forth and proposed an alternate development scenario for the HRA to take the lead on the project, develop the common improvements that would be attributed to McDonalds, as spelled out in the McDonald's agreement and compensation worksheet. He commented on minor changes in building materials and costs, finding none to be significant, and in some cases, he found that reduced costs had been used in the compensation worksheet. Mr. Lazan explained that site improvement costs are based on four components: McDonald's site improvements anticipated; private common improvements; pad preparation with Sunwood Drive to make the site salable that was part of the development costs as spelled out in the compensation worksheet; and, development soft costs in excess of $500,000 that was limited to $450,000. He stated the proforma worksheet totals $2.5 million but the average cost is in excess of $3 million for this project. Mr. Lazan restated that the contract is clear, it is further defined and supported by the worksheet process, the project did not change and remains the prototypical restaurant, and only one site moving forward is a hardship to Landform, not the HRA, as he had worked on three sites. In Housing and Redevelopment Authority / March 11, 2014 Page 3 of 5