Consider Flaherty and Collins Financing Options (portions may be closed to the public)

In December of 2010, The HRA approved the real estate deal with Flaherty and Collins for the sale of land immediately west and north of the parking structure and proposed addition.  Since that time, F&C has been working to secure their construction financing to commence in late June as scheduled. In early April, the HRA approved an amendment to the original agreements that extended their contingency for financing to May 15th, and their closing date to the end of June.

At the April 19th worksession, the HRA received an update on that progress from David Flaherty, and discussed the challenges with obtaining the financing necessary to commence construction as planned, and the challenges with coordinating the ramp addition in the absence of the simultaneous start of the apartments.

As a result of the discussion, the development team was directed to pursue options for the HRA to assist in the financing of the project and to present those potential solutions at a future meeting.

At the May 3rd worksession, the HRA considered a conceptual solution to participate in the financing to facilitate the commencement of the project. After considerable discussion, the HRA directed staff to prepare a more detailed analysis of this potential solution and present the results at the May 10th regular meeting.  Stacie Kvilvang of Ehlers will be present for the meeting to discuss the financial analysis of the financing options. 

The development team has met with the HRA's legal counsel and financial consultants on several occasions over the last two weeks. There have also been several meetings with both F&C and their lender PNC. The development team has assembled a potential solution to the financing challenges, and would like to present this to the HRA for input on both the policy decisions surrounding this solution, and potential deal points that would need to be renegotiated with F&C.

The HRA's financial consultant has prepared an assessment of the proposed solution and a financial analysis of the various options to be presented and discussed during the meeting this evening.

Items to discuss include:

• Consider examples of similar projects
• Discuss the proposed solution for this project including options for funding the ramp addition and rail station concurrently.
• Consider renegotiation items on Purchase Agreement.

Depending on the direction provided, the HRA will need to consider the structure of a second amendment to the documents to provide the time necessary to modify the deal and commencement of the project.

The development team recommends the HRA consider the above topics and provide direction as to proceeding with this project.

If appropriate, direct staff to prepare and execute a 30 day extension to the current purchase agreement to finalize the appropriate documents necessary for the chosen solution.

N/A

Provide consensus direction to the development team as to a potential funding solution for the Flaherty and Collins project, and direct staff to prepare appropriate documents and proceed to renegotiate the existing purchase agreement. 

Direct staff to prepare and execute an amendment to the existing purchase agreement extending the contingency and closing dates 60 days from their current dates.