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411 BLUFF BLOCK AND JACKSON BLOCK REDEVELOPMENT <br /> DEVELOPMENT AGREEMENT STRUCTURING CONCEPT <br /> The March 17, 2004 joint meeting of the HRA and City Council concluded with strong <br /> support for the Bluff Block and Jackson Block Developments with a continuing linkage <br /> between the two projects. Although MetroPlains favors de-linking the two <br /> developments, it is willing to proceed with the two projects linked. Its willingness to do <br /> so is based on its understanding that the City and MetroPlains will proceed through the <br /> development process using a partnering approach to resolve issues that may arise during <br /> that process. MetroPlains will take the normal development steps through project design, <br /> construction bidding, marketing, financing and the securing of public approvals. <br /> MetroPlains will use its best efforts to secure site control through purchase agreements <br /> that are contingent upon MetroPlains' receipt of necessary public and financing <br /> approvals. <br /> We anticipate that there are at least two likely decisions that the City and MetroPlains <br /> will be faced with during the development process: <br /> 1. It may be mutually beneficial to the City and MetroPlains to close on properties <br /> prior to the start of construction. One reason to do this could be to obtain a price <br /> substantially lower than market value. Another reason could be to allow the <br /> li community to meet the needs of current downtown businesses. However, in order <br /> for MetroPlains to undertake early acquisitions of property MetroPlains' profit <br /> incentive would have to be increased over the level shown in the current <br /> proforma. Also, the City would have to consider participating in the acquisitions <br /> with bond financing. <br /> 2. At some point the need for construction sequencing will require the Jackson <br /> Block to proceed prior to the Bluff Block. Proceeding simultaneously with the <br /> construction of both projects would be detrimental to downtown businesses. <br /> Also, the parties acknowledge that downtown residential development normally <br /> leads with rental housing followed by for-sale housing and that construction <br /> activity at the Jackson Block will have a strong positive effect on marketing of the <br /> Bluff Block. The determination on the allowable timing of construction would <br /> have to be made based on verifiable information available at the time and can not <br /> be c onditioned o n p unitive types o f m easures t hat w ill adversely the a ffect the <br /> projects' viability. <br /> M:\larrywo\other\Bluff Block and Jackson Block Redevelopment <br /> • <br />