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ARDEN HILLS REGULAR CITY COUNCIL – DECEMBER 12, 2016 10 Ms. Kvilvang explained the proposed Option Agreement provides the City up to seven years to acquire the civic property from the Master Developer. The timeframe begins once the Joint Development Authority (the “JDA”) approves the Master Development Agreement (the MDA”) with the Master Developer. While the MDA approval timeframe is not set, it could reasonably occur within the next three to twelve months. The MDA approval initiates the Option Agreement timeline. Ms. Kvilvang reported the actual sale terms depend on when the City is prepared to move forward with construction on a mutually agreeable civic use as defined in the TCAAP Regulatory Code. An earlier sale results in more favorable cost terms for the City. The Master Developer will be constructing the underground parking structure, utilities, and road improvements for the Civic site (the “Infrastructure Improvements”), which are a value to the property. Depending on when the sale occurs, the general sale terms are as follows: Timeframe Terms: Within 2 years of MDA approval City pays $1 for the land. No cost to the City for the Infrastructure Improvements. Between 2 and 5 years after MDA approval City pays 50% of the actual land purchase price paid by the Master Developer AND 50% of the Infrastructure Improvement costs. Between 5 and 7 years after MDA approval City pays 100% of the actual land purchase price paid by the Master Developer AND 100% of the Infrastructure Improvement costs. 7 years after MDA approval The Option Agreement expires and the City agrees to rezone the property to TC-3. Note: At any time during the term of the Option Agreement the City can choose not to proceed with a civic use and rezone the property to TC-3 Ms. Kvilvang indicated as discussed at the December 5th worksession, the timeframe and cost structure is intended to encourage a plan for the civic site sooner rather than later. The City has the potential to benefit from low or no land and infrastructure costs. The Master Developer has the potential to benefit from a civic use that adds another amenity for the development along with increased construction efficiency for the infrastructure. Councilmember Holden asked if ready to proceed meant the same as shovel ready. Ms. Kvilvang reported this was the case. Councilmember McClung questioned when the time period would begin. Ms. Kvilvang explained the time period would begin two years from the date Alatus signed a Master Development Agreement with the JDA. She anticipated an agreement would be signed between these two groups within the next three to six months. Mayor Grant commented there were items he liked and items he did not like within the Option Agreement. He stated on the balance, he was pleased that the City would have an option to do something special on the Civic Property and he believed this was important.