F & C represents and warrants to the City (and the HRA) that F & C would not undertake the Project and that the Project would not be economically feasible without the assistance provided in the Development Agreement. F & C agrees to purchase the Development Property pursuant to the terms of the Purchase Agreement. F & C agrees to submit construction plans for the Project (a 216 unit, four story luxury apartment building consisting of 16 townhome style rental units and 200 apartment units) to the City for approval, although the City’s approval rights for purposes of the Development Agreement are limited. Developer must substantially complete construction of the Project on or before June 30, 2013, subject to delays resulting from force majeure. F & C must make annual payments on the City Loan out of the Project’s net cash flow, must make additional payments if F & C refinances its loans and receives cash back and must repay the loan in full on the earlier of April 1, 2029 or the date F & C sells the Project to a non-affiliated entity. Absent a default, interest does not accrue on the City loan until April 1, 2024, but the City will receive, in lieu of interest, a one-time fee of $120,000. After April 1, 2024, interest accrues at 6.25% per annum. If F & C defaults, interest accrues at the rate of 12% per annum. As security for the repayment of the loan, F & C must provide a guaranty from Flaherty & Collins Construction, Inc. F & C must reimburse the City for the cost of the way finding and stall designation signage the City installs in the parking ramp addition. The Development Agreement obligates F & C to execute an Assessment Agreement that establishes a minimum value for the Project for purposes of real estate taxation. If F & C defaults, the City may terminate the Development Agreement, terminate the Loan Agreement, declare a default under the Loan Agreement, cancel and terminate the TIF Note and exercise any other legal or equitable rights or remedies. Because a portion of the Project is not being used for housing and the pro rata share of the subsidies provided by the City in the Development Agreement plus the potential subsidy provided by the HRA relating to F & C’s ability to lease the commercial space exceed $150,000, F & C must also enter into a business subsidy agreement which will be incorporated into the Development Agreement.

 

All parties obligations under the Development Agreement are subject to each parties performance of its obligations under the Purchase Agreement and if the Purchase Agreement is terminated for any reason, the Development Agreement terminates.