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<br />City Council Regular Meeting - 06/20/05 <br />Minutes - Page 17 <br /> <br />their projected profit; and questioned the feasibility of the project <br />if the rate of return was fewer than 10%. Councilmember Ihlan <br />questioned if the developer was building in their profit as part of <br />the requested public subsidy. <br /> <br />Mr. Casserly, and his staff, reviewed their detailed analysis of <br />the project from pro forma infonnation that had been continually <br />updated during the process to-date; discussed revenue sources <br />and percentage of sales, noting that until all property had been <br />acquired, estimates had been conservatively projected; and noted <br />that without assistance, the project would have no income and <br />would not be feasible. Mr. Casserly advised that pro formas <br />were continually being updated, and the one provided in the <br />Council packet had since been updated as more information <br />became available, in an effort to more accurately reflect actual <br />expenses and revenues. <br /> <br />Further discussion included the current pro formas in the latest <br />draft of the proposed Development Agreement, with a projected <br />9.15% rate of return. Greg Johnson, of Krass Monroe, addressed <br />the format and information contained in the financial portions of <br />the proposed Development Agreement, concurring with Mr. <br />Casserly that the developer's projections were conservative. <br /> <br />Councilmember Ihlan questioned Exhibit 17C, under sources and <br />uses of funds, what source represented the $4 Million listed as <br />"Other." <br /> <br />Mr. Johnson noted that this area was related to creation of the <br />hazardous substance subdistrict and had been separated on the <br />report for financial and accounting purposes. <br /> <br />Councilmember Ihlan, noting that housing developments <br />generated more TIF and would represent a higher standard of <br />clean up, questioned the commercial and "parking lot" portions <br />of the development and how environmental remediation would <br />be handled related to TIF generation. <br /> <br />Mr. Casserly noted that there would be more value tied up in <br />housing than in commercial properties; and levels of clean up <br />would vary within the project, with MPCA approval of all clean <br />