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Department DPW REQUEST FOR COUNCIL ACTION � �i n on '1'win Lakes (;ontract Ne�otiations with Rottlund Homes (PF3543). l,� BACKGROUND: DATE: 03/29/04 ITEM N0: g•� Agenda Section: 1,1 In December 2003 the City Council chose the "Master Developer" concept for Twin Lakes Redevelopment and established a StakeholdersPanel process to work with the selected Master Developer on a refinement of the master concepts. This decision provided for a longer term, coordinated view of the proposals by the developer, sub-developers, and stakeholders. With more consistent, planned development, higher quality projects can be expected. Such new coordinated investments need assurance that more than a blighted truck terminal will be their adj acent neighbor in the foreseeable future l.� The Council directed Rottlund Homes to review the conditions of Twin Lakes and return with an answer as to whether they (Rottlund) would enter into an exclusive developer contract with the City. Rottlund (Michael Noonan and Todd Stutz) as well as Jim Casserly and city staff have been working on this agreement for the past 3 months. Consultants and staff are recommending approval of the one year exclusive agreement with Rottlund to enable the more detailed site costs analysis to occur. Without such an agreement, Rottlund will likely not make the 1 year investment (with their consultants) that will help to determine the costs and timing associated with a master plan implementation. 1..� On March 15,2004 the Council provided further comment and direction to refine the agreement providing for termination by either party. The revised, black lined contract is attached as is a draft resolution approving the contract. I-� Because of the uniqueness of the Twin Lakes Brownfield Redevelopment Area and the costs of cleanup, contamination removal, new roads, interstate ramps, utilities, and ponding as well as more typical development costs, all participants are taking an in-depth look at the possible costs, funding sources, and gap strategies necessary to proceed with the redevelopment. In e� terms, there is an imbalance (a "gap") between revenues (TIF is already included as a revenue) and costs of redevelopment. Some public agency "gap" strategies have been identified for further discussion and analysis. The Council will need to determine whether to proceed with these: • Twin Lakes Parkway to be paid for by city or others (MSA funds?) • Special assessmentsto be used as needed • G.O. Bonding (in addition to revenue bonds) Condemnation and moratoriums will be needed • Fiscal disparities spread community-wide, not carried entirely by project • Developerto pay above market higher land payments