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John Herman August 4, 2003 Page 4 will cover timing, phasing, development components and issues of default. It should be noted that if a Senior Housing component, acceptable to the City Council, is not developed this would constitute a default under the Agreement. In addition, no profit will be provided to the Redeveloper(s) until all components ofthe development are completed. E. Infrastructure Construction and Phasing (bv City/ Authoritv). commercial Phase. Following comments regarding this section: a. The City's Engineer will need to review the costs of improvements and verify the final number b. The City has no other source of funding available to it and reserves the right to use project resources to pay any costs associated with the public improvements. c. The term of the special assessments that will be passed on to the small commerciaf properties will not exceed 15 years d. The City has no other sources of funding available to it and reserves the right to utilize project resources if additional Right-Of-Way is needed, inclusive of assessing any portion of the costs. F. Phase I Publiclv Assisted Redevelopment Activities. 1bis section to be reviewed and refined as appropriate by the City Attorney. G. Liquor Store. Land Acquisition and Construction. The City will be providing the Redeveloper with a counter offer for this section under separate cover. H. Cub hnorovements and Accuisition. The City agrees that public assistance may be warranted with regards to the Cub Foods for the needed improvements to assure it meets the standards of the new surrounding commercial development. However, the City and Ehlers has reviewed the proforma submitted by the Redeveloper for the Cub Foods acquisition and is of the opinion that no additional subsidy is needed. The City encourages the Redeveloper to reassess the acquisition of this property and/or renegotiate a purchase price with US Bank for the Ste. Marie Property or the owner of the Cub Foods if they continue to insist that they need assistance to acquire the property. 1. Redeveloper Profit and Overhead Limitations. a. The City and Ehlers does not agree that the Redeveloper should be entitled to any profit above what he is entitled as a project partner and/or developer of the various components of the development. b. Redeveloper(s) shall not be entitled to project profit until all issues regarding Senior Housing and the For Sale housing have been resolved and the City has needed assurances that Phase II development will happen.