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0 <br /> MEMORANDUM 5-11-10 Work Session <br /> To: Mayor and City Council <br /> From: Mike Gaffron, Asst. City dministrator <br /> Date: May 7, 2010 <br /> Subject: CommonBond Project <br /> Attachments <br /> A - May 4 Letter from CommonBond re: Land Sale/Lease Options <br /> B - MHFA Form & Request <br /> C - Apri126 Long Lake Letter of Objection <br /> D - 2002 Sewer & Water Agreement <br /> Pursuant to the direction received at your April 27 work session, staff and Soren conferred with <br /> Amanda Novak regarding options for CommonBond's control & use of the parcel behind the fire <br /> station ("the Outlot"). The attached letter from Amanda dated May 4 discusses a 99-year Lease <br /> option and a 30-year Note option. CommonBond would prefer the lease option. <br /> Amanda's letter also addresses the "difficult to develop" status of their MHFA application. This <br /> category ensures that the 30% basis boost is applied for this 9% tax credit project. Amanda has <br /> also provided the city with an MHFA "Acknowledgement of Receptivity to an LCA Funding <br /> Award" which requires the Mayor's signature. <br /> Because of Long Lake's objections to use of the Outlot for higher-density housing voiced by <br /> Randy Gilbert at the April 26 Council meeting, we advised Amanda that she should confer with <br /> Long Lake specifically regarding the issue of water capacity. She did so, and has advised us that <br /> Terry Post indicated: 1) he believes the 2002 Agreement is no longer in effect because it was <br /> created under a prior council; 2) Long Lake has plans for their own higher density housing and <br /> needs to reserve capacity for future use; 3) the Long Lake water tower has insufficient capacity to <br /> serve this project, so Orono should extend its own water system to serve it. Amanda also <br /> expressed to us that CommonBond is not in a position to force Long Lake to honor the <br /> Agreement. She has indicated that she will be making a presentation about the CommonBond <br /> project to the Long Lake Council on May 1 gcn <br /> Because of these issues, staff met with our Alternate Attorney Dick Schieffer on May 6 and asked <br /> him to address a number of questions related to the Agreement, such as its validity, whether it <br /> contemplates reserving future capacity, who determines whether there is "sufficient capacity", <br /> and who the parties would/could be if we were to seek a declaratory judgment on the validity and <br /> interpretation of the Agreement. <br /> While the Agreement language generally does not support Post's position, we do need to take a <br /> step towards a conclusion. Schieffer suggested that the City Engineer is in the best position to <br /> determine whether there is capacity, and we have asked Tom Kellogg to consider what would be <br /> involved in making such a determination, pending Council review of the issue. Schieffer also <br /> noted that submitting a letter to Long Lake requesting approval for the water units to serve the <br /> CommonBond project is too easy for Long Lake to ignore or delay - it may be prudent for him <br /> and members of staff to appear at a Long Lake Council meeting to get the issues out in the open. <br /> Mr. Schieffer has agreed to attend our May 11 work session to discuss a strategy for resolving the <br /> Agreement issues. <br />