On this evenings agenda, the HRA considered a contract for the sale of land and the development of a 240 unit apartment project on the proposed Lot 3, Block 1, COR ONE.

 

Attached is a worksheet outlining the Incentive Compensation for this project. Under the terms of the agreement a portion of the total compensation is due upon the execution of the contract, another portion due at closing, and the remainder due at Certificate of Occupancy.

 

With this Item, the DM team requests approval for the structure of the compensation ONLY, the schedule under which the payments are made are yet to be determined as they are triggered by events that are not certain at this time.  Also of note, is the incentive compensation advance that has been paid since the beginning of the contract in the amount of $10,000 per month for the 12 month term of the contract.  At the time that compensation would be due for the Flaherty and Collins transaction, the incentive compensation that has been paid to date would be deducted from the compensation due for the Flaherty and Collins transaction, if the deduction has not already been made for the TOTI-Suite Living land transaction. 

 

 

Absent sufficient cash flow in land proceeds or tax base, it is the intent of the development management contract to negotiate the fees to provide some compensation for the direct work performed by the consultant, while recognizing that the City will provide a greater compensation package (per the contract) for projects that return more direct revenue to the City.  The hourly work completed on this project for the City was exclusively done by Darren Lazan of Landform and the City has covered all direct expenses incurred by the development manager per the contract.

  

 

The Development Manager has requested consideration of full compensation in the amount of $541,210 (see attached calculation).  Staff recommends the HRA review the proposed compensation schedule for the Flaherty and Collins -The Residence at The COR project and approve Development Management Compensation in the amount of $280,373; with $180,373 of that amount to be paid with the Flaherty and Collins project, and $100,000 of that amount to be paid with the next development project that nets development proceeds sufficient to cover this expense.