Committee Minutes

MINUTES-FINANCE/DEVELOPMENT COMMITTEE
Tuesday , May 31, 2005 - 4:00 p.m.___________________

Members present: Christensen, Glassheim, Hamerlik.
Also present: Keith Lund, John Schmisek, Meredith Richards, Pete Haga; Jim Kobetsky, Schoen & Associates; and reps. from MetroPlains and Dakota/Crary, developers representing various projects.

1. Downtown Development RFP

Chairman Christensen reported they have a staff report from Urban Development regarding their analysis of the various downtown housing projects and some of the individuals associated with the various projects are here, reps. from Schoen and Associates, Dakota/Crary and MetroPlains. He stated that the committee that met ranked various projects for the various sites, and made recommendations to the city council and here to make final recommendation as council committee to the city council.

Site #1 - 100 Block of N. 3rd Street - Proposal submitted by Schoen & Associates: Elite Brownstones (Phase 1)
Recommendation that proposal by Schoen & Associates, The Elite Brownstones, should be located on Site 1, 100 block of North 3rd Street, that this is the vacant land across the street from Lola's to the Dacotah Hotel.

The committee reviewed the financial information provided by the Urban Development Office

Glassheim questioned using only the 25% that goes to the City and would multiple everything by 4 because the taxpayer is the same taxpayer and the returns of the public is 4 times what is listed here and a good deal of the money is CDBG money which is not City money deficit although the City controls it, and that many of these projects will cash flow to the public taxpayer 4 times faster than shown here. He stated the has question about the land value, almost all of those were public purchased with flood CDBG funds and is a real cost to government but not a cost to City government.

Christensen stated that Glassheim's observations are for Site 1 re. each proposal, Glassheim stated that each proposal the same thing the way you say City income and have property tax of $11,000 is really $44,000 to the general taxpayer. Christensen stated you have a multiplier in there of some sort. Mr. Lund stated based on consultation with the assessor's office they had 4% annual escalator applied to the real estate taxes. Christensen stated it is rather disheartening to have that in there. Glassheim stated he had the continuing question about the income approach figuring the value and he asked Mr. Carsen several times to tell him what the story was but he never did and that he doesn't understand why one thing is done by sales approach and another by the income approach which is significantly less than the actual dollars spent. Christensen stated that perhaps we don't have data that they feel is acceptable for us to review to make recommendation. Mr. Lund stated the project is $9.991 million or $10 million project about the Security block parking section. Christensen stated he was talking about Site 1 which has been recommended which is the Schoen & Associates project; Glassheim stated that they have the sales approach and that seems accurate. Glassheim stated he was talking about the second one on the next page which is slated for the income approach. Mr. Lund stated $10 million total project cost and MetroPlains had based on comparative projects in Grand Forks which are Alcott Manor and Ryan House and suggested that the actual taxable value based on income approach would be $2.1 million, which is essentially $30,000 per rental unit, and he stated what they did was take a number that was in the middle and half of construction cost put in as value and they tried to sit down with the assessor's office to try to determine and unable to do so, and understand constraints on their time, and if you assume that the building will go on the tax rolls at $10 million after year 20 that will have $117,000 loss considering the City's 25% and rather than multiplying it times 4 for the overall taxpayers payback.

Christensen asked where do they make the assumption that the building goes on the tax rolls in year 20 and asked if the request that these folks presented to the committee say that they wanted a 20-year tax abatement. It was noted a 13-year tax abatement. Mr. Lund stated they did a 20-year financial analysis performa on each project and is giving bottom line at the end of the 20 years for the MetroPlains, Dakota-Crary site and if in fact you assume that the project was on the tax rolls at $10 million. Mr. Lund stated the last number on the spread sheet for Security Block Apts. $990,344,795 and if you assume that the taxable value is $10 million, that number then changes to $117,120 in the negative, and if you assume that it goes on the tax rolls at $10 million, and have reps. from MetroPlains that will tell you that based on their experience that it will not go on the tax rolls at $10 million. He stated their experience with similar projects suggest in their minds that it will be $2.1 million on the tax rolls, until year 14. Christensen asked how could it be $2.1 million if they paid $10 to build it. Mr. Lund stated that even if you assume a $10 million full value it still tracks less than these apparent successful proposals on that same site. Mr. Schmisek stated he thinks the problem is down on the income approach like other apartments and rental units and is a LMI rental facility and rents held low, not like normal apartment building.

Christensen stated they aren't going to build something for $10 million and carry financial statements at $5; and asked that they explain the tax credits.

Rob McCready with MetroPlains, stated they estimated the taxes on property which was based on the income based approach on comparable buildings, and rents in this building range from $510 up to $750, a moderate rental building, expenses are fairly high to operate real estate and operating incomes and that derives the valuation of rental properties, that they looked at other rental properties and came up with estimate of what paying in taxes for the year per apartment and ends up to be about $850.00 per apartment per year and that $850 is what they used to estimate the annual taxes that they would be paying for this building, which is irrespective of the cost of the building and the cost of the building is very high because putting in very high quality construction which is paid for by the federal tax credits, so the value of the building you end up with is based on the net operating income as opposed to the cost to build it. Christensen stated he did $850 times 73 and is $62,050, so that is what thinks the city assessor would assess this building, and explain tax credits and how turn that into cash to apply to construction of the building.

Mr. McCready stated the housing tax credit program was set up in 1986 - -- housing that would be supplied by the private sector as opposed to Section 8 Housing was sponsored by subsidized housing facility did was create a tax credit that was calculated based on the amount of funds spent, construction cost of the building by 9% and get that returned to you over the 10-year time period and were able to sell those credits to the investor who is paying a very high dollar amount for those credits and we receive a lot of funding from the sale of those federal credits and helps us put in a great product on the market and yet lease it for reasonable rents. He stated it would be adjusted by 9% based on interest rates that are on the market and 8.15% times 10 years - 80% of your eligible costs you get in credit over 10 years and sell those for 85/cents on the dollar and 81% of your eligible costs times 85/cents per credit, and about 60-65-70% of most of your total construction cost coming to you in the form of a credit., the rest has to be made up of mortgage, etc.
Christensen stated if $10 million, about $3.5 million of your equity or mortgages or $6.5 million of credits. Mr. McCready stated in their original proposal they had sources of $2.6 million in commercial first mortgage, $415,000 from tax abatement proceeds for 13 year tax abatement, and go out and take a loan on that, that instead of paying those taxes, were able to receive taxes back, $300,000 in Home Funds and $150,000 from CDBG funds. Christensen asked if they were going to repay the CDBG loan. Mr. McCready stated that in this proposal they had requested a 30-year loan and repay at end of 30 years, 0% interest. He stated major feedback they received from the committee in the process was to decrease the amount of time they were realizing funds, whether original source of City or federal government to repay those. Christensen asked what the HOME loan repayment plan; Mr. McCready stated that is the same as CDBG, 0% over 30 years.

Christensen stated they have lost property tax on the Dakota/Crary proposal, small negative figures until year 13, and how compute that property tax on, land value. Mr. Lund stated loss of property tax on the Herald parking lot and then removed and rolled into this project.
Christensen asked what is the plan to pay for the Herald parking; Mr. Lund stated that part of the project was to acquire the lot, not up to the City to purchase.

Mr. Lund stated in terms of the analysis they did a 20-year performa and in footnotes indicated whether the funds were requested as a grant and in their opinion based on their submission or 30 year loan didn't carry out their analysis for 30 years. Glassheim asked Mr. Schmisek whether it was Mel's position is that all rental properties are treated on an income basis and appraises them all on income basis. He stated it seems to him from the beginning that when something is bought with tax credits rather than mortgages, the construction is real and should be done based on construction value rather than income approach because this subsidy in the income, most private sector things only have the income from rents but this has income from tax credits which subsidizes the rents and seems unfair to treat actual construction of $8-9-10 million as if it were $5 for purposes of taxation - that he understands the general rule.

Mr. Lund stated that the Security Block Apartments would be at higher density and one of the goals was to bring people back to downtown Grand Forks and that this 73-units will have a higher density than will 20 and wanted to illustrate that for the committee. It was noted only 1 parking space with 2.3. Christensen stated there are 73 underground spaces and 24 above ground spaces which are on the Herald parking lot, which is a trade for the parking that will be removed for use for the Herald and will be a swap. Herald won't own but receive use of that parking area.

Christensen asked where the public would park should they choose to use commercial spaces in your project, on the street, and what is status of the parking along the river behind the former Lola's bldg., if that is used. It was noted that is not used for parking, that there is going to be a pedestrian access where the dumpster is, reason for not parking is marketing, security, lighting, could be used if people knew it was there and was secured. It was also noted that this area will be used as staging area for the flood protection project. It was noted on the parking issue and in looking at the ramps downtown and when business people leave and working people in the apts. coming back, what kind of capacity is in those ramps, originally empty and to say only have one parking stall but there is city parking ramp which is empty at 5:00 o'clock and in favor of housing. Christensen stated they are trying to get people use it.

Mr. Lund stated that along those lines, the City did recognize that Site 2, the Dakota lot,
(Site #2 - 0 Block of North 3rd Street - Dakota/Crary - Dakota Condominiums) because there was a single proposer that met the minimum and suggested that staff work with the developer, Dakota/Crary, and identify and resolve timing issues, parking and other designs and bring back to the review committee after having a chance to work out some of these issues.

Glassheim asked Jim Kobetsky whether the other site which was 32 units wouldn't be just as good to go first, whether possibility. Mr. Kobetsky stated the reason they chose Site 1, first basic site was the fact they used were no obstacles to buy out and going to a clean site and start rather quickly in urban setting and smaller venue to try to sell out condos and go into phase 2 in the following project, which was little larger and closely to size which as starting out with - and that's why that site was chosen.

Glassheim asked what they would do with the art and the memorial as not in the design. Mr. Kobetsky stated spot in U shaped area in the front and would try to do something to retain that - to raise it up on platform, and find someplace for the memorial. Mr. Lund stated that the recommended action from the committee was to execute letters of understanding with the developers to work out all of these issues and get performas and bring complete package to the city council for consideration, and these are just a few of the issues that will be developed as move along. Mr. Kobetsky stated they are trying to incorporate the statute.

Glassheim stated that buildings are better than empty land but this is particularly attractive empty land - but maybe too late down the road - one of the attractive areas in the city.

It was moved by Glassheim that we recommend to the city council that staff execute letters of understanding with Schoen and Kobetsky with for the 20-condo units on Site 1. Hamerlik seconded motion. Motion carried.

Christensen stated they still have the matter of discussion re. Dakota Block and what is staff's inclination to go forward with the proposal. Mr. Lund stated that staff's inclination would be to follow the recommendation of the review committee and ask staff to sit down with developers, that they haven't had a chance to analyze it and look at proposal and develop details. Christensen asked Mr. Kobetsky if they put together a proposal on the Dakota Block, he stated they did not but if re-open it up would reconsider that. Mr. Lund stated Crary group put in proposal for that site for condominiums and met with little opposition because of timing and parking issues and esp. with Dacotah Hotel, the recommendation from the committee was to hold off a little bit to address some of these issues and bring back to the review committee, just glanced at this and it is a new proposal and committee would like staff to work with them and confer with the city attorney to make sure that they are being fair to all parties. A rep. stated that their proposal passed, the criteria need 70% and the proposal received 71.3%, and they asked that they re-look at this, not to re-open it. Mr. Lund stated that staff would like to do as a recommendation, to work with the developer and work out some of the details. Glassheim stated there are two different things, one is to re-open the site for all bidders and the other is to see this as a modification of the bid that they put in and to work with them and not to make a final decision today, but to work with them and have staff return the refinements. Site 2 was voted down.

Christensen stated Site 1 was on 3rd Street and they went through the numbers and there was a motion made and committee is going to recommend to the council to go with the Selection Commission's recommendation as to that site; and now talking about the Dakota Block - and they were asking to fine tune the second one and that is not re-opening, just talking to staff on that one. A rep of Dakota/Crary stated that as they were the only ones to submit a proposal that they were going to be first right to make something whether it was condos or could be apartments and totally change or redefine their proposal but they asked for that, that one was to be Schoen's because they ranked higher and they heard the biggest issues were parking which wasn't a big deal in the RFP so could address those things sooner so committee gave them the opportunity to redefine this and work with staff and revalue recommendation. Hamerlik stated that the council makes the final decision, neither the other committee nor this one has the final authority, therefore will recommend it, and his concern is if what he terms as fine tuning gets to be more than fine tuning, then he will raise the question again, is it a new RFP and if it is, then put it up, and move forward but if changes then think legal counsel would tell us quickly that we may have to go RFP. Mr. Schmisek stated it was a condo presentation and are going to need some clarification before we go to change it because now it is rental apartments. Mr. McCready stated there were a lot of good ideas in the committee and it is hard to say they are not going to pursue those ideas because the ideas were to reduce the investment, address the parking concerns and make sure that you don't have wholesale condos with parking and best way to address that is rather than having condos is to have rental units and the other primary issue is to --52 units (1 and 2 bedroom units) and assume that a 1 bedroom has 1 car and 2 bedroom has 2 cars - Mr. McCready stated they had an opportunity to analyze the parking for their buildings in Grand Forks and the ratio they came up with was 1.25 for 2 bedroom and .75 for 1 bedroom and buildings a mix of seniors and general occupancy and found primarily the one bedrooms are seniors and 2 bedrooms are general occupancy. He stated they wanted to make sure they had at least 1 to 1 in their building and came up with 1.7 so have 61 spaces for 52 apartments and took a little bit of 1st Avenue and were able to identify that for 34 stalls there.

Christensen asked if the RFP asked for apartments or condos or was it open - it was open, and everybody was given an opportunity to submit an RFP for Site 2 and it was their decision to submit it for apartments or condos; first said were going to do it for condos but the Selection Committee has recommended the Schoen deal and that is condos, and this group knew that and came back and going to try to use these credits for apartments on this corner. Christensen stated the question is to ask the city attorney if we have to go with an RFP because they have shifted from a condo to an apartment, recognizing that nobody else submitted a proposal, and if he says we have to, then discontinue working with these people and shoot out another RFP and move on, then playing field level again, and if he says no, keep moving with Crary/Dakota group - and get resolved in the next 7 to 10 days. Hamerlik agreed. Mr. Lund stated a memo will go out tomorrow.

Mr. Lund stated wording, acknowledging that the single proposal was received for Site 2 and Merit received the minimum score the review committee recommended, that staff work with the developer and design parking and timing issues, then return to the i.e., review committee with any revisions, and if want to add subject to approval or review by the city attorney that would seem appropriate because then don't need to come back here if the city attorney gives us an affirmative response. A rep. stated that council member Gershman was concerned about marketability, selling condos and suggested that perhaps not doing two condos sites next to each other and thinks this proposal is somewhat in response to comments that were made and that was one of the reasons they submitted the proposal originally. Christensen stated we want to continue to work with you on apartments on that corner but if for some reason there is a legal impediment then will overcome that but sending out a request to the other committees if they are interested; only disadvantage you have is that you have submitted something to us that you may want to review. The rep stated hat if they were to stay with the condo concept that there would be a time delay to see how Schoen's site went and how they sold before City approval to develop that site for selling units. Christensen stated that he didn't think that competition deterred developers from selling homes within a quarter of a mile of each other.

Site #3 - 300 Block of North 4th Street.
Proposal submitted by Schoen and Associates: Elite Brownstones (Phase II)
Mr. Lund stated they have 3 proposals: Schoen & Associates, they made some assumptions, the acquisition of 320 North 4th Street, as an example of $102,750 and purchase agreement that was included in the proposal for Helgeson and John French for the sale of the vacant 25 ft. parcel and commercial building on the other side of the street and best information they have, and parcel would cost the City and put the taxable valuation in for the acquisition of 306 North 4th Street and 320 University Avenue (7 unit apartment and bank of garages), and that Schoen's project builds the entire half block and they are asking the City to acquire and make ready for building the entire half block. He stated they are thinking when sell the commercial property across the street that Mr. French appears to require that in order to sell the vacant lot, a 25 ft. strip, will get $60,000 from that sale and that is included in the performa. The green house is 306 N. 4th Street and 320 Univ. Ave. garages, and 320 N. 4th Street is small lot, 25 ft. and Mr. French used this for parking for commercial property; the Helgeson agreement is $102,750 which includes the Red Cross building. Mr. Lund stated that Mr. Helgeson's negotiation with Mr. French was not willing to sell that strip unless the other property was taken out.

Mr. Lund stated they have provided estimates for demolition and tenant relocation, and if use CDBG funds on any part of this project they would need to provide relocation benefits to tenants in the 7-unit apartment building as well as commercial relocation benefits to Dakota TV.

Christensen stated that when they approved the committee's recommendation for the Schoen project on 3rd Street, that is a loan that they have zero interest and we're borrowing that money. Mr. Schmisek stated using Fannie Mae at 3%.

Glassheim stated on the Dakota/Crary proposal for the townhouse units, what is capital financing.
A rep. stated it could be anything, could be tax abatement, something they could use to market to buyer either forgivable grant over 5 or 10 years and leaving it up to staff to come up with some creative ideas for them to help get that gap as close as they could. Glassheim stated that staff has not been in conversation with them for the past few weeks as he thought they might be. Mr. Lund stated that as the analysis shows the acquisition of 320 N. 4th Street, acquisition is eligible and they have identified it as such, they are asking for the City to acquire that in addition another $300,000 of gap financing, CDBG funds as they have articulated in several memos can't be used for new construction but HOME funds can be, but that does carry a low income requirement.

A rep. stated they don't have any other acquisition costs and are not asking for the green house or any lots and their project can continue on if that acquisition runs in - Glassheim stated they would not be doing the whole block.

Glassheim stated that the additional acquisition costs in the Schoen Proposal, those not paid back in the same of the condos and recover through property tax. Mr. Lund stated they are looking for buildable land, all obstacles removed and to pay back the $2.2 million, no interest loan, for the sale of the condos, the proposal was not to include acquisition, demolition or relocation costs in that loan. Glassheim stated there is about $300,000 in acquisition, demolition and tenant relocation for Schoen. Christensen stated he subtracted the loan principal from the $2,645,775 and the total is $427,775 and lower than Crary proposal.

Glassheim stated the difference is between the taxable value of 16 units or 32 units. He stated the Schoen and Kobetsky designs are lovely in that site and sees the 16 units that fit into the neighborhood much better and look like they belong there, but the problem is that is a transition block between dense downtown and residential and the Schoen proposal brings the downtown density and high brick a block away from downtown if consider downtown starting as University Avenue, and sure the residents in the neighborhood would be happier with the 16-units that look like the neighborhood, Schoen proposal is more dense and adds more to the tax base.

Mr. Kobetsky stated they wanted to get enough of this type of models to create excitement and wanted to have those successful and when first phase done, the City would have purchased and cleaned up the rest of that block, and then ready to go - 12 month period.

Christensen stated the object of this exercise was the utilization of CDBG money ands recycling it, and so far the object has achieved a result which some would suggest they had been forewarned. It is his understanding that CDBG money would be available to condemn and take the property across the way behind this development. Mr. Lund stated that is correct. Christensen stated they are not here to negotiate with either group, that if they were to suggest as part of a future development of that block they had $1 million in it, money the City had spent to acquire the property and making site for future development, all obviously say some way to pay us back some day.

Mr. McCready stated in the context of their original proposal for 73 units, they had CDBG funds and advantages and disadvantages to each type of funds, Home funds come with a caveat of 40% of units at lower rent restrictions and LMI and that is why have that tiered rent limits for most of their rents, market rents up to $750 and 40% at lower rents and if HOME requirement gone and received CDBG funds would have more flexibility.

Christensen stated that where have HOME money might want to rethink that because you will have more flexibility if use CDBG money. Mr. McCready stated they didn't want to dictate what type of funding resources the City uses and want to work. Christensen stated his goal with the CDBG funds which he believes the council endorsed with a split vote was to use CDBG funds and get it repaid so they could do them again and not to bury them in the project, but to use them and get them back as part of the cash flow stream.

Glassheim stated that none of the projects propose paying back CDBG funds, that they would be able to use them but not pay them back. Mr. McCready stated they could pay the CDBG funds back in the same time frames as tax abatement.

Christensen stated they would have to use them for infrastructure, site improvements, streets, etc. and then pay it back, make a loan to them from CDBG funds, which would be restricted to use that money for this. He stated that doesn't address the issue, the issue is we have a committee recommendation which was pretty close again, as to the Schoen Project, Site 3 vs. 4th Street Townhome Project on Site 3. The advantage of the Schoen one is that there is some utilization of the CDBG funds but none is paid back, and that doesn't accomplish our goal, and the advantage on the 4th Street Townhomes is that they used $102,750 of the CDBG money but none of that is paid back, that the gap financing probably shouldn't be considered to be grant but wouldn't be paid back.

Hamerlik stated they are not meeting the objectives of the council. Mr. Lund stated CDBG funds could be revolved outside of the request for proposals for downtown housing and rental rehab programs, home ownership programs, low interest loans or partially deferred loans to public service agencies to capital projects, and have had discussions along those lines.

Mr. Lund stated he understands the efforts to revolve CDBG funds but it doesn't have to be in this project. Christensen stated if they were to approve the recommendation as to Schoen, second phase, when would that construction be - 2006. Kobetsky stated they were anticipating they would sell first one off in one year period and then next one. Christensen stated that the City would go forward with acquisition of the property. Kobetsky stated that first one money is paid back and then go to the next phases.

Christensen stated they get money from Fannie Mae but that they are just about out of money because $5 million gone, half in Promenade and half in this deal. Mr. Lund stated they have had conversations with Fannie Mae in case would need to increase the line of credit on this project. He stated they have spent bout half on Promenade and have $1.2 million of affordable housing infrastructure to go in this year - Promenade, Columbia Park 29th and S. 3rd; that by the end of this year will be near our $5 million with payback next year for the first round of affordable housing district infrastructure that will be paid back after the 2-year deferral. He stated the first project asks for a little over $1 million and may need to ask for $1 million of additional Fannie Mae financing, have verbal tentative approval, and stated that there is a 2-year deferral on special assessment projects in affordable housing districts where using Fannie Mae money to finance that in the interim, after two years and in 2006 have first payback and get $1.5 or $1.7 million paid back.

Glassheim moved that what he thinks best for the site, moved that we recommend the 16-townhouse spaces to Dakota/Crary. The motion failed for lack of a second.

Hamerlik moved that we accept the recommendation for Site 3 of the screening committee based on point scale. Christensen seconded the motion. Upon call for the question and in favor of that motion, Hamerlik and Christensen voted aye, Glassheim voted nay. Hamerlik requested that the minutes report the vote.

Site #4 - 500 Block of University Avenue. (University Flats)
It was noted there was only one proposal by Dakota/Crary and Christensen asked what is the gap financing and how do they get it back. Mr. Lund stated the gap financing could be HOME funds, there are no eligible CDBG activities on this site for construction, the second part of the analysis is that the committee recommended -- Christensen stated there is eligible CDBG to buy 523 University, demolition, tenant relocation and would imagine some things like infrastructure and relocating sewer and streets, parking, etc. Mr. Lund stated that his comments were as proposed, the project doesn't have eligible CDBG funds, the review committee did suggest in order to maximize the potential of Site 4 that the developers consider purchasing the single home on the site and build out the entire area from alley to 6th Street and if the developers are willing to do that, there are $75,000 worth of CDBG activities there, would have to review with the proposer to see how that affects their budget and if in fact they need more or less than the $380,000 in gap financing at this point, and that is part of working with them before they execute the letter of understanding but bring in the project forward to the city council for final approval. Mr. Lund stated there are 8 condos and if the developer did go to the corner and provide two more condo units. A rep. stated that MetroPlains very familiar with HOME funds and how utilized for rental housing, doesn't know what the restrictions are. Mr. Lund stated it is based on maximum subsidy and maximum subsidy per unit is $60,000 and for every $60 or 70,000 you have to have one unit sold to a low income family, units sell for $130,000 per unit. Christensen asked if we wanted to make sure that we could use some of our monies for LMI people, how structure this deal so they get the project and we use some of our money and get it back. Mr. Lund stated in terms of getting it back, only way to get it back is on per sale of each unit, but they are asking for gap financing in their proposal was not in the form of a loan agreement, was in fact a grant so they would have to sit down with the developer to see if we could get them in their performa to carve out some funds to pay us back. It wasn't proposed that way.

Christensen stated that we approved the Schoen deal and by approving the Schoen deal they received the land and other accommodations of which there is no payback, $427,775.00 for 32 units. Glassheim stated he didn't think they should go ahead with Site 4, very nice but high subsidy for low utilization, doesn't think it competes with other condo units, different place, etc. Christensen stated for 10 units, $47,620.00 per unit. Mr. McCready stated they were trying to get to the gap financing to make it work, if can't come to some agreement, then won't do the deal. Glassheim stated that they not make a recommendation to council and authorize staff to continue discussions with developer in terms of financing; Hamerlik stated to table it and instruct staff to work with them and come back. Christensen stated he would like to get these people moving as they have two things they re going to work with staff on and should have the opportunity to get in the ground this year, and asked if they could be back in 2 weeks. Mr. Lund stated they would be doing the same thing with Schoen as will with these whether we have a letter of understanding or not and working on details of the development, financing and may ask Mr. Kobetsky to see if he can squeeze some interest into his loan. Christensen stated they have decided on project for Schoen but haven't decided but want to decide in favor of Dakota on these other two and want to get that moving as quickly as can.

Hamerlik moved that we table proposal by Dakota/Crary for University Flats for 2 weeks and instruct staff to work with the developer. Glassheim seconded the motion. Christensen stated whether or not we do 8 or 10 units, and if do 10 take the other house - that these numbers aren't right on that house because Hamerlik stated it was sold for $100,000. Motion carried.

Christensen stated that we have to spend a lot of time on these matters with Dakota/Crary group and hopefully get a report back in 2 weeks, and that we have already decided to go with Schoen on Site #1 and Site #3.

Christensen stated he received e-mail re. upcoming meetings, the next meeting was suggested by Mr. Lund as June 14 (that Howard's redrafting of the different ordinances for consideration. not ready) Christensen suggested doing Ren Zone expansion and Rental Rehab. and report back on Dakota/Crary matters (and status report of negotiations with Schoen). Glassheim stated that the ones they recommended for approval will go to council.

Meeting adjourned.

Alice Fontaine
City Clerk