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*^2640/264 1 Dunbar Dev. Corp. <br />October 4, 2001 <br />Page: <br />Ground Lease. Al ihc time HUD was still the funding source, Dunbar's consultants advised that <br />City ovsnership of the senior housing land was not feasible based on HUD regulations and policies. <br />Once HUD was no longer in the picture, the City's bond consultants pursued the ground lease option <br />with the new underwriters and were successful in bringing the ground lease back. As currently <br />proposed, the developer will sell Lot 2 to the Cit>' for $ I, and the City will lease the land back to the <br />developer for 90 \ears at $1 per year. The lease language will include conditions ensuring the site <br />w ill be used for senior housing for the term of the lease. <br />Deferral of Park and SAW Connection Fees. A question raised by the developer, especial ly now <br />that the City will have ownership of the land, is whether the City will ‘sunset' the deferred sewer & <br />water fees (i$40,000) and deferred Park fees i±S 1 60,000) at the end of the lease, rather than making <br />them due and payable w ith 99 years of interest at 7®/o per year. Mr. Dunbar has indicated it has been <br />his understanding throughout the process that the fees would be deferred for as long as the use of the <br />property remained senior housing. Since the development agreement now includes a 99-> ear ground <br />lease that requires the iLse to remain senior housing, he believes the fees should not have to be repaid. <br />If the City now requires the fees to be repaid over a shorter time frame, and with interest, this is a <br />substantial change to the initial agreement, and adversely alTccts his financing package, os well as <br />the project's cash flow' and rental rates. <br />If the fees do not ‘sunset*, the deferred amount due with interest at the end of 99 years would be <br />$162 million. Options the Council may want to consider include a long-term deferral without <br />interest; a shorter term deferral without interest, say 10-15 years, at which time the fees become <br />immediate!) due: and a short term deferral followed by a 5-10 year payment plan. If the fees were <br />forgiven, the City could repay itself with a portion of the final 5 years of tlie ta.x increment revenue <br />generated by the development. <br />Senior Housing Building Plans Finalized. The senior housing floor pfans and elevation views <br />have been included in your packet for your final review and approval. Building materials include <br />a rockface CMU along the exposed foundation, brick exterior for the lower levels of the front facade <br />(2 levels of 3-stor> segment, I level of 2-story segment), and lap siding for the front upper story as <br />well os for the side and rear facades (see plans. Exhibits H-t-J), Also included are the landscaping <br />plan as w ell as grading, road, drainage and utility plans. A signage plan including the design of <br />the entrance monuments has been submitted. An exterior lighting plan has yet to be submitted. <br />Wally Case of DSU will be reviewing the landscape plan to confirm its conformity with the <br />land^aping standards of the RPUD District The Fire Marshal and the Long Lake Fim Chief have <br />also reviewed the final plans and no site plan or building lay out changes ore anticipated as a result <br />of their review. <br />No detailed plans have been submitted for the ofllcc building. If the office eventually is built per <br />the originally approved concept plan, a simple plan review/approval by Council would be necessarv' <br />before a building permit could be issued. If something other than the office is ultimately proposed, <br />this would require on amendment to the PUD, a more extensive review process.