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www.lelandconsulting.com Page 10 <br />City-Owned Lot: Key Considerations <br />City Investment <br />In order to spur development of the City-owned lot, the City will likely need to subsidize the project. Because of current <br />challenges in the development market nationwide, the quicker the City wants to see the lot developed, the more money <br />it will likely need to put into it. Subsidies that can help attract development include: <br />• Free or reduced-price land transfer <br />• Equity in the project <br />• Infrastructure development <br />• Tax subsidies or deferrments <br />• Reduced development or impact fees <br />• Preliminary environmental or other due diligence studies <br />Partnership Structures & Development Agreement <br />The Steering Committee has identified redevelopment of the city-owned lot as a top priority for Downtown Elk River. To <br />facilitate the development of this site, the city should conduct developer outreach, embark on a formal RFQ/RFP process <br />to select a developer, and negotiate a development agreement that ensures development on the site is in alignment <br />with the community vision. Key considerations for this agreement include: <br />• Land: the City should determine whether it intends to retain ownership of all or part of the land. Typically, <br />developers prefer to own the development site outright. The City could determine alternative ownership <br />structures, such as a 99-year land lease, but these are complicated arrangements that may not be appropriate <br />for this site. The City could alternatively retain ownership of any parts of the site that are intended for public <br />benefit or that will be developed at a future time. <br />• Public Benefit: Through the development agreement, the City could choose to require the developer to provide <br />some public benefit in exchange for public subsidy (as discussed above). This could include park space, parking, <br />or some other amenity that would benefit the community. However, the City should ensure that the public <br />benefit is not so costly that the agreement falls apart. <br />• Timing: If the City chooses to give the land for free to the developer, it should consider including a provision <br />within the development agreement that causes the land to revert to City ownership if development is not <br />completed within a specified time. This will ensure that the City does not give up control of a key downtown <br />site if the developer is unable to deliver. <br /> <br />Page 156 of 157