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Going Forward: <br />PSD and Parkview East are requesting some type of assistance that totals $500k in order to bridge the <br />gap of these cost overruns. Without this assistance the project will not be able to proceed. There are <br />many important factors that play into the timing of this project. They are as follows: <br />1) There is a group that is proposing an apartment complex in Anoka. The market study <br />determined that demand in this area will overlap. Usually the first project in the ground will drive out <br />any competitors; therefore, if our project does not start first it will stall for an undetermined amount of <br />time. <br />2) Given the rising construction costs we are experiencing, we anticipate costs can only go <br />higher. Apartment rental rates do not increase at the same proportion. <br />3) We are entering the fall season so if the project is pushed back too far we will incur winter <br />heat charges for the footing and foundation. This additional expense only magnifies the shortfall. <br />In conclusion, initially we thought the project could be developed and constructed without any type of <br />concessions or assistance. Once these additional costs were brought to our attention, we reassessed <br />the cost of this project. We have provided you a project cost overview for your review. As you know we <br />are dedicated to this City and want growth in all areas. To date, we have not received any assistance of <br />any type for the numerous projects we have developed in the COR. Feel free to contact me if you have <br />additional questions or would like clarification regarding the information in this letter. <br />Sincerely, <br />Matt Kuker <br />coo <br />