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ARDEN HILLS CITY COUNCIL WORK SESSION - JULY 21, 2008 14 Councilmember Holden questioned if all infrastructure fees were going to be passed along to the property owner through hookup fees, etc. Ms. Kvilvang stated City fees were going to be passed along to the future property owners and amounted to roughly $3.5 million. Mayor Harpstead asked if the Council had further direction for Ms. K vilvang to negotiate an internal rate of return of 150/0 with Ryan Companies, provided that look backs would be included with a total vertical assessment. Councilmember Holden stated she thought the going rate was higher than 150/0 and that this really could not be negotiated because this was the floor. Mayor Harpstead indicated this may be true, but that he would like to see the front end of the development run efficient and tight as it would greatly affect the finances going forward. Councilmember Holden questioned how the City would be protected if the developer were to walk away and the land sold. Mr. Lehnhoff noted a moratorium could be set on development on the site for one year. The City still retains zoning control Councilmember McClung indicated this is a hard decision for the Council to proceed with and he wants to make sure the Council stays involved as this development agreement moves forward. Mayor Harpstead indicated the 150/0 rate of return was based on appropriate land values and that TIF would be adjusted accordingly. Councilmember McClung questioned how the City would reach the 150/0 and what would have to be given up on the City's behalf. Ms. Kvilvang stated she felt the City would not be giving up anything because from day one, density would be the last thing discussed. She indicated land sale proceeds would affect this number along with a reduction in overall development costs. Ms. Kvilvang explained the City will be a great candidate for grants as well which would greatly affect the financial numbers upfront.