redevelopment agency. Uh the time is 5:00. The date is June 5th, 2025. Um call this meeting to order. Christine, there's been a um proper notice and quorum present. Yes, vice mayor. Thank you. Coming down to
approval of minutes from the April 17, 2025 CR8 meeting. I move for approval. Second. I have a first and a second. Any further discussion? Roll call, please. Mr. Holland. I Mr.
Osbody I Miss Lee I vice chair Ashcraft I second item C item board with discussion review of CRA development agreement and tax and incremental benefits. Tom. Yeah.
Um so this is related to a uh redevelopment agreement uh between the CRA and North Central Place. Uh this is the uh five-story apartment building just a couple of blocks that way. Um and
um we are we're in an interesting situation related to the transfer of the property and the status of the taxes. And so uh we have gotten a request from uh Mr. Devonzo representing North Central Place for his annual payment. Uh
because of an ownership uh change with the property and the status of the taxes, there's some ambiguity uh between what's happening and the agreement. And so we've asked the attorney uh to review the agreement. Um, and so Sasha has a uh
brief presentation for you uh related to the agreement and the circumstances and then we're looking for some direction on how you want to move forward. So I'll turn it over to Sasha. Great. Thanks. Okay. So we're going to be looking at the tax benefit issue raised by this
agreement and ask for clarification and some guidance going forward. Just generally these um agreements the the framework for it is to incentivize redevelopment by tax increment reimbursement and in addition to a few other requirements the reimbursement is
contingent on upon the property being approved and of course the increase in the tax base. So the board is here today. We're asking for interpretation um because it's needed in order to clarify the agreement intent and the terms to
authorize the city to pay the developer based on the taxes received to avoid precedent risk and prevent inconsistent application. I believe we have four additional ones um that follow the same format. So we want to make sure
that we get that clarification from the board so that that would be applied consistently. After direction is given on this item, a resolution adopting the clarifying items will be brought to the CRA for adoption. That would avoid having to amend each agreement, just memorializing the clarification we get
today. And of course, the CRA should consider revisions to subsequent tax increment benefits uh agreements. and there's a new template and a resolution that will be brought back to you for consideration based on the direction today. Okay, here's the background on
this particular agreement. So December 19th, 2019, the developer signed an agreement um that the developer was North Central Place and that was signed with the CRA. The developer completed this project relying on future tax increment reimbursement.
There were no except exemptions to property exemptions or subsidies requested by the developer. That's one of the conditions. The developer sold the property and the new owner failed to pay the property taxes. Tax certificates were eventually issued and purchased by
a third party resulting in the taxes being paid to the city and the developers now seeking reimbursement based on the original agreement. Do we have any questions so far? Now the important uh sections here the relevant sections that uh the reason
we're here today is um the reimbursement is tied to incremental property taxes actually received by the CRA requisitions require proof of eligible costs paid by developer and in this instance it would be the completion
of the project which was close to 1.9 million or so based on what's in the agreement. the developer is prohibited from requesting the property tax exemptions and subsidies which has not been done. Um so that's in compliance and the developer benefits are not transferable without CRA approval. The
developer has not transferred those benefits. However, the agreement is silent on who must pay the property taxes and who must own the property in order to trigger reimbursement. So we look we need guidance on postsale benefit eligibility because it's silent on that as well. So
ownership retention is not a a condition right now um as far as the requirement in order to receive the benefit. So the key legal and practical issues we have ambiguity in the payor. Again the agreement is silent on whether reimbursement is contingent on the
developer or subsequent owner paying taxes. We have the developer reliance. The developer relied on the reimbursement to complete this project and retained no ownership in the property but continued rights to claim the benefit. The city did receive the taxes.
Um, of course, it took a little bit regardless of this particular delinquency. It was a few years. Um, taxes were eventually received by the CRA through that third party purchasing the tax certificates. The benefit continuation, the developer has not violated any of
the exemption conditions. Ownership transfer is not explicitly voiding benefit under the current agreement and there's an risk exposure. Failure to pay may result in litigation by the developer. The CRA's liability exposure increases absent interpretive clar
clarification which is why we're here today. As to this agreement, the recommendation to the CR board CRA board is to clarify first the intent and to have that recognized by indicating that the intent of these agreements, whether it is to incentivize redevelopment
through reimbursement of taxes that are actually received, not tied to who paid them. Uh authorized payment. So, as long as there were no exemptions filed, which there weren't, and the taxes are received, the developer should receive
the payment based on remaining eligible for same and to protect the CRA interest to clarify that if any future property owner claims exemptions, reimbursement will be voided for that year. Yeah. So,
that's great stopping point actually. Um, this is all I have as to this particular contract before you. And again, this would apply to the other four that out that we have out there. The next two slides kind of cover comparisons between this one and my
recommendations or considerations for a future agreement to avoid these issues going forward. So, we're looking for direction on the intent recognition, authorization of payment, and CRA. So, just curious, why
didn't the um secondary owner pay the taxes? Is it in foreclosure? I have no idea why they didn't pay the taxes, but just curious. And then it went to tax deed sales. Is that what happened? The property, to my knowledge, has not been
sold. It's just tax certificates were redeemed. Okay. So, the city did get paid. So, there's a tax from that property. Correct. And then the project was initially 1.9 million believe so and then and then the
property before construction was done sold for 3.5 million. Is that correct? I don't know what the property sold for but the what the property sold for is outside of the scope of the agreement. The intention is
the the redevelopment was done based on reliance of this particular benefit for that developer. So that 1.9 was paid already by the developer. Do you Tom can always Yeah.
The well what the agreement said that the developer needed to invest a minimum of 1.9. I believe Mr. D. Vanzo actually invested more than 1.9. I don't know the exact number. Um, but the agreement said
he had to invest a minimum of 1.9. So, we don't have any evidence to show any of that. But public record, I think, no, he no, he's require he was required to submit uh receipts to show that he invested that money. That was required as part of the agreement process. So, how much did
you get receipts for? I I don't have them in front of me. Al, do you know how much in receipts he Al, could you just come up so we can get on the record? Al Adam, economic development director. Um, the uh receipts did total the $ 1.9
mill. He was able to identify $1.9 million worth of receipts. And then I looked in public records and I saw that the property sold for 3.5 million before construction was even done. I don't know the sales price. Daniel was here and can can
answer that question. I just wanted to get clarification. I don't question. Okay. I'm sure he's going to want to speak, but again, the agreement itself, the condition was a 1.9 that was satisfied and finance has all of the documentation for
that. So, this really just centers around the benefit itself. Well, if you go a step back, the purpose of the CRA is to incentivize somebody to make a development. And I think Thomas
told me I might be wrong. The the the line you use if if not for I what's that line you told me? If not for, I wouldn't do it. Basically, the but for test. But for test. And so what that means is uh the developer has to show us
that but for the CRA incentive the project wouldn't happen. So the 1.9 wouldn't happen because it was not profitable enough for him unless he got help from the city. Right. Yeah. I mean he was required to submit some proforma
information showing that um but for the up 190,000 uh that the agreement uh permits over 14 years but for that investment from the CRA uh the project would not have happened and it turns out
it sold for 3.5 so he's an overperformer I I I think there's a Um yes, the the the CRA um incentivizes through its agreement over performance. The CRA wants as much taxable value on
the tax roles as possible. So just looking at the uh property appraisers website, uh the building I'm sorry, the property is valued at about $3.2 million right now, but that number comes from
the last sale. So that's do good or bad on the sale as to what it sold for, but he still was incentivized to do the 1.9 and ended up with three. So, so this really comes down to do we pay the the
developer that did the building and not the new owners. Correct. Well, the new owners are not a party to the agreement. So the the issue here is again the conditions as far as completion of the project, satisfaction of the amount, the reliance component, all of that was satisfied before the agreement was
entered into and and it was a condition of that. The issue here is that there's no um requirement that a specific party to the agreement pay the property taxes. So it's silent on that. So while the property was subsequently sold and again
that is outside the purview of the the agreement itself it's silent on whether that benefit would somehow be affected the taxes were paid by a third party at a cert through a tax certificate. Now the city received payment for the taxes.
So, because it's silent as to who pay the taxes, um that's one of the issues that we're having. And it's also silent as to what kind of obligation um would be affected if, let's say, there's a a subsidy request or a property tax exemption made by the new
owner because the agreement only says the developer can't do it. The developer hasn't, but what if that were to happen with a future owner? So, we want to kind of clarify all of that. the this is a an agreement between the CRA and the developer. So, new property owner is not a part of it. This is not doesn't run
with the land, anything like that. This wasn't transferred. Um the the benefit wasn't transferred. We're just trying to get it clarified so that this doesn't result in inconsistency since we have four other agreements out there and then clean it up for the next one. So, was there a period of time where the
taxes were not paid? Yes. Okay. So, and there was no payment made because the city again has to receive actual payment in order for there to be a payout. So, once the tax certificate sold, we received payment. So, now there's money for that payout that resulted from the
increase in the benefit. Is there any advantage or disadvantage on who pays the taxes? Do we even care who pays the taxes? No, I don't care. I mean, as long as we get it. But but but the also the question though has to be if if um to me if they don't um pay that okay the
original does not pay and and further down the line this moves on with the others. It seems to me that the original person would be responsible for it. Right. Well if the person if in this instance the property was sold so this went to another individual. had this
been um so does this move with them when they sell it? It does not. It requires CRA approval. So if the developer would have retained the property, of course, they're responsible for payment on the property taxes. Otherwise, they're subject to taxed sale and possible
foreclosure action and things like that. Um but that's not what happened here. The property was sold, but the taxes were paid. Even though delinquent, they were paid and we received them. But again, this this agreement is between the CRA and the developer. Going back to uh Vice Mayor Ashcraft's
question as to I don't want to be flippant, but who who pay do we care who pays the taxes? The the purpose of the redevelopment agreement is to incentivize private investment in the CRA to get um a redevelopment project uh
and a and value on the tax roles. And that has happened through this this agreement has incentivized private investment and a project on the tax roles. Again, I don't want to be flippant, but the CRA has accomplished what it set out to do with the
redevelopment agreement. I don't want to say we don't care who pays the taxes, but in effect, the CRA has gotten has gotten its has gotten what it wanted through its investment. Sasha, did um did is did the developer
follow or did they live up to the letter of the agreement with the CRA board? I believe that that's the case. I mean, Tom and and Al can speak to that. That's all I need to know. Yeah, same here. Yes. Same here. Yes. Yes. Okay. Okay.
All right. So in essence, if it was done and paid, then whatever agreement we had with him was completed because once they paid it, well, that's why because of
the lack of clarity on that uh payment component, that's why we're here. But yes, the project was completed and for the first uh I think it was two years that the that there were um delinquent taxes, there was no request for payment because there was nothing to pay out.
Now there is. So it's it's um why we're here. We want to get clarification as to if there is and again there looking just uh perspectively as to the revisions to um the subsequent agreement. If you restrict it to uh the property owner at
the time of the agreement being responsible for payment of the taxes, then you run into issues as far as sale of property, right? So now you're interfering with someone's um rights to do what they wish with their property. So we look at other aspects. Okay. if if they're going to um embark on this
journey then and uh we want to just make sure that the property taxes are paid and um then if they want to transfer it, we look at whether it requires approval for the CRA or if it's going to end the the contract between the CRA and and um
that particular property owner, etc. So, it's they're they're a little it's more complicated than just saying that the owner has to be the one to pay the taxes if they eventually do sell the property because at at the inception of this, the investment was made and completed. So,
there are certain options to consider, but we want to first take care of what we have before us and those four other contracts that are out there before we look at subsequent options. At the end of the day, it's our agreement was written poorly. there was not enough put
into the agreement to protect everything from here going forward. It looks like Sasha has on the next couple slides for a way for us to protect ourselves and the CRA going forward. So So you're saying like honor what we have now, but then we got to fix the problem. Yeah. He
he he fulfilled the letter of the law of the agreement that we had with him. Yes. Unfortunately, we didn't write a good enough agreement to to add other protections in there. So yes. So, it's on us to make it better after this. And something that we all need to remember in the back of our minds. We won this
year in the state legislature, but next year they're coming after the CRAAS again, and we will lose that by that battle, I believe. So, the CRAAS are going away, and we're going to have to really watch what we're doing with CRAAS. Exactly. Going forward. If I may, the the main
ambiguities are the agreement says that the developer can apply cannot apply for tax exempt status. He has not done that. But what the agreement doesn't say is if it's sold, what happens if the new owner
applies for tax exempt status? And frankly, Mr. D. Venanzo has exposed himself a little bit because he has sold the property and now he has lost control of who is someone going to apply for taxexempt status. If a if someone buys
it and applies for taxexempt status, they haven't violated the agreement, but they have set up a situation where he doesn't get paid because no one's paying taxes. And then the other ambiguity is the uh it also says that they can't um
the developer cannot challenge the appraisers's value of the property. And again, he has not done that. But if a new buyer isn't happy with the assessment and challenges the assessment, Mr. Devonzo would suffer uh
because he would not get the payments uh that uh the agreement had coming to him. So, I think uh we're work we've worked on some language that's going to uh clarify some of those ambiguities moving forward. Sasha, are you wanting a motion
to clarify this first and then you present something different? Yes. So, I want to handle this aspect first. Yes. I want to make sure that we go through the these three components just recognizing um what the intent was of the agreement. Now, everything Tom said is exactly
correct. Um again if if we don't receive an increase in tax value then there's really no payout. So I I do believe that the spirit of it is there. Another aspect I want to deal with um subsequent to this agreement is going to be that delinquency component. So, how long are
we going to allow the delinquency to go for before um you cannot claim a benefit, right? Um for with the CRA and if if are we going to look at possible um just, you know, disqualification components, that's one of the
recommendations I have there. If it's let's say two years of two taxes, two tax years, right? you give it up the first year if you don't pay but then if if it continues or if it's one year on one year off kind of thing the second year that you have two delinquencies then at that point you don't qualify we
that way we can kind of keep the coffers there because that's the intent of of the CRA too so but that's subsequent to this one I mean I I can't tie the two but these are other matters to consider just going forward to make it clear for everybody involved well I mean but are
we able to restrict a new owner from not filing tax exempt status. We can't do that, can we? No. No. But that's why we want to make sure that we're not tying who pays uh the taxes to the agreement while also not binding the CRA to a
situation where yes, the developer who's no longer the owner hasn't violated it in this barit, but the new owner did decrease the property taxes by doing the such things as applying for a subsidy or um tax exempt status. So, we would just want to make it clear that if Mr. D.
Venanzo had assigned this agreement to the buyer, then they would be subject to it, but that didn't happen. And so, they are not subject. So, the answer to your question is no, we can't make the buyer do anything because they're not party to this agreement. But if well, and you
can't assign it without CRA approval. Um, that's that's in there as well. Okay, that actually is a really good question. Can we make that a requirement that we can we have to assign the agreement to a new owner or that you don't debate if you assign it right but that that we could look at that
perspectively. So again, I want to first deal with the current situation and those forward agreements that we have out there. What would ensue from that is if we um if if the motion is to um basically reiterate that this is the intent and um we want to authorize the
city to make that payment, I will prepare a resolution for you that will embody everything we talked about and that would just be applicable to this agreement and those four that we have out there. And then the next thing we'll do is look at those components, okay? Um, by comparison, so we do need a
motion. Um, I adopt. How much will we be paying out? 1.9. No. Well, it's it's 1.9 over 14 years. Uh, it's a maximum of 20 22,500 uh per year is the maximum. I
think we need to clarify too that if somebody sells the property by default, it either goes away or it goes to the new owner because the purpose of it is to help subsidize the years coming ahead because it's going to be a struggle. Just like if someone opened up today and
built a new building, it's going to be a struggle until they get up to full strength. And I think that's the purpose of the CRA. But if you don't own the property anymore, then the benefit should go to whoever owns it now. so that we could keep them above water. Maybe they would have been able to pay
their taxes. So that's something to consider. So I think going forward that needs to go with the property because we are part of the property in the sense that it's in our municipality. So we want to see the property thrive, not the seller. The seller can make a compensation or adjustment for that in
determining the value of what they sell it. Okay? where if in this case he thought his property was worth 3.5 and he was going to give up his 199 190 grand in essence you would make the argument that it's really worth 3.69 because they're going to get it one or
another way and actually he'd work out better because he'd get paid ahead but the incentive needs to be to the person who owns the property in my opinion uh and who's in both in the boat with us. So that's something to look um look into as far as the next agreement and it's part of what we're going to talk about
whether we want this agreement to essentially run with the land which is not what's happening currently. Uh but that would be for the subsequent agreement. But what we do on this case today has to carry to those four. It would be this current one and the we
have other we have four others that have the same language the exact same agreement. So just for consistency, we want to make sure that that's why I want to do it this way as far as just one a resolution codifying what the intent is so that if this were to come up with one of the other uh contracts we have out
there, then we know exactly. Has any of the other four if there's four have they sold and they're no longer with the same? I believe they still own the property. This is the only Yeah, this is this is the only and it's quite unique. I mean, as far as what transpired, I mean, generally people pay their property taxes. So it's uh it's you know
we wouldn't be here today had it not been for the other four transactions any of those other four owned by the same Actually it's a total of four all owned by the same applicant. Uh no two are owned by the same applicant. So his case he owns three of them. So three of the
four are owned by the same developer petitioning for today's payment of that 19,000. Um we um the Mattela's uh town home project on Orange Avenue and then uh well um the threetory owned by Bill
Bkalis, but I think they're um I think we heard the applicant say that he's involved in three of them. I don't know if we you accept that or you No, he No, he is involved in three. He's got the um the former service station across the
street. That's not why we're here. The fivetory and then the uh waterfront grill. I know. I know. All right. So, what kind of motion do we Mr. Chair? I make a motion that we uh find that the developer followed the letter of the law or the letter of the
agreement that we made with him. Uh but the CRA board would like to look at new ways of doing things moving forward. I'll second it. I identify and we will make payment on this. Okay. I got a first and a second. Any further discussion?
No. Roll call. Is that what you were looking for? Yes. To do. Any further George? Okay. No, sir. All right. Roll call, please. Mr. Holland. Hi. Mr. Ozbody. No. Miss Lee, I. Vice
Chair Ashcraft. Hi. Thank you. That would be what you wanted. Excuse me. You got what you wanted? I know, but I think there's some things said that I should be clarified. So, you all can have a Are you okay with that or no? Everybody, I have a card from Mr.
Demonz, so to speak. Oh, sorry. Is it public? It was a discussion u among the board, but if you would like to hear from him, it's already been decided. Do you Mr. Chairman? Fine. The next thing we'll do is go through. You got five minutes. I'm sorry. Three minutes. Three
minutes. Three minutes. I know. Sorry. three. Okay. So, what happened is I started this building before COVID and the rents were significantly less when we started the process. Somebody drove
up and wanted to buy the building while I was in process. And by the way, um I spent $2.5 million. Okay? We spent $250,000 in upfront paper costs before we we uh broke ground. So what happens
is um if you want to say it was a windfall per se what h if you'll all remember rents skyrocketed. So the buyer that came up to us uh I didn't want to sell but my I have a business partner and he's like we need to sell. So, we
sold the building and just so you all know, you're collecting 65,000 a year in property taxes and if it stays at the current value, you're going to collect over a million3, actually a million four through the course of the CRA and I'm going to get
$190,000. So, incentivized is there. Also, the developer, you know, you talk about you don't want to transfer that you if if the property sells, you don't want this to go forward. Guess what? The buyer the buyer did not have the risk upfront of
providing the funding to do a multi-million dollar project that took over two years because of COVID. The uh the buyer, the end buyer did not have to um do any of the groundwork and paperwork, the upfront costs, $250,000 outlay. So, it would really be
penalizing when you say, "Well, just throw that 190 on the end to the end buyer." It it really it can actually change how a deal transpires. Also, um, so I understand if a new buyer decided to go, say a church bought the
building and they want tax exempt status because they're going to make it a halfway house or something, right? What happens is I certainly understand that it will terminate the CRA funding that I'll receive. I get that. That's a risk you play. I want you to know what's going on with the building. It was not one buyer. It was a group of five
buyers. Two of them are significant. Three of them are weak. They were going into foreclosure. I contacted the bank. me and my partner are prepared to buy the building back. We're going to wait for it to go to auction, but it's not going to go to auction. You know why? Because the two strong players, they're pushing the other three out. That's
exactly what's happened. And then they're going to butt heads. So now you talked about, okay, let's say after two years, we go ahead and nullify nullify the uh CRA agreement because they are they haven't paid. Those tax those tax
uh bills are sold at auction. George, you know that. Everyone else knows that they're sold at auction. You're going to get that money regardless of their payer back and they get to go three years and then it hits the auction block unless the owner at the at the 11th hour comes up and pays everybody off. So, you're
still getting your incremental value there. So, it really is and and the reason I say this is because, you know, as crazy as I am, I'm planning to do like four more buildings downtown and I'm going to be coming back to the CRA and and believe it or not, the money is
valuable. And I'm not planning unless the buyer is significant and wants to actually pay to finance me getting the whole amount up front, which they're not going to want to do. Um, I'm not going to want to transfer those funds. I understand what the attorney said that
if the buyer were to make it go tax exempt, it would nullify the agreement. That's fair. I I totally get that. These people are not going to let that building go into to a non uh to a tax exempt status. And if it goes for auction, like I said, we're going to be
right there. So, I fulfilled the agreement. I spent more than I was supposed to. Um the building it So, just so you know, that's a 21,000t building. I built it for less than $125 a square foot. That is an unachievable dollar amount by anyone. That building will
never be worth less than 2.5 million. Never in in wildest dreams. We when we built that building, we anticipated rents from 12 right around 1,200 to like 1350 a month. They went in at 1,800 bucks a month. And I know I got to go.
But the thing is, so this is I appreciate that I got the vote. I'm sorry, Mr. Asody, that you didn't see it. Oh, I can't. But no, I don't have a problem with with what you said. I agree with that that incentive was there and that the city is becoming whole. Where
my where I'm addressing if I didn't make it clear is who should be benefiting from that incentive as it goes down the line because my understanding is the benefit of the CRA is to help someone carry through a tough time. So where you were fortunate enough to to to go through what you did and we're grateful
that you invested in the community. Uh I'm just trying to see looking forward ahead the incentive. Um and it might be something too depending on what it it is. Sulfur we want to help the people who are in there and it's clearly they're in trouble because they need
help. So well they totally there's no question as to what you did was within I took the risk. I took the personal risk. Sure. There's always risk in in Yes. And just so you know, do you all know who managed that building? Do you know who managed that fiasco there? When you say
I didn't see it, I think that's a bad choice of words. Okay. I apologize. No problem. Exactly. Great. Thank you, D. All right. So, let's uh Are you ready to take a look at a few options for a new agreement? Back up. All
right. So, we'll first look at these four and then there's four on the other page. So, the first one is the responsibility for paying taxes. So right now the agreement we just looked at is silent on that. It only requires that we receive the incremental tax. Um the option here if we wanted to have
this we just talked about maybe not doing that but explicitly requiring the developer to pay taxes timely and in full prior to delinquency otherwise the reimbursement is forfeited if not paid on time. So um you can consider perhaps not requiring the developer but ensuring that the property
taxes on the property are paid. Again this agreement right now is structured between developer and the CRA. I I don't think we can are we going to talk individually or you you want to go through the whole thing? Uh you want to talk on each side? Let me just go
through it because that way we can kind of encompass um some of these are going to tie together. The other component eligibility post sale. So right now it does not require uh ownership retention to receive the reimbursement benefit. Um we can my suggestion is to require that
the CRA approve uh that the benefit continue. If the property is sold, you would actually have to get express approval. If you sell the property without approval from the CRA, um then the agreement would terminate. That's a way to um ensure that the CRA
remains involved, but at the same time you can allows you to consider the circumstances of the developer, possibly the market, new buyer, and not necessarily tie it to the land. Um, and just kind of it still remains a personal agreement, but it will require involvement from the CRA if the property
were to be sold. The exemptions affecting reimbursement, uh, right now it just says the developer may not apply. We just covered that. Silent on future owners. we can in expand that restriction for any exemption um or any kind of tax abatement as well that would disqualify reimbursement for that year.
Um again, we're just looking at it if it were the developer reimbursement triggers this uh current agreement. It's it's triggered if we receive the incremental property tax payment and then um the recommendation would be that
the payment be conditional on proof that the taxes were paid that year. Again, it could be by developer and that we have receipt of that. So, it wouldn't be an automatic trigger just because um the project was completed or anything like
that. There would have to be a yearly application um with proof of payment. The other components default condition. So, uh right now there's no forfeerture clause in there for tax delinquency. the termination uh there's a termination notice for uh default and
failure to cure. In this instance that we just looked at, it wouldn't apply because again the property was transferred. So we can't require someone to do something that on some property that they don't own. But um this could be cleared up by making an automatic forfeite if reimbursement of taxes is
not paid um within well the year of the that it was actually paid and if there's a delinquency of two two or more years then the agreement is terminated by default. Um that's that's a way to eliminate uh continuous payments. that
say, you know, these every 3 years that the property is redeemed and then you're making these large payments out. Um that's just something to consider. The assignment or transferability again um our the current agreement says that the benefits are not transferable without
approval and that has been the case, but this one will only allow assignment of the benefit with the consent of the CRA. And it does allow and if you wanted um to consider whether financing could be uh a component for
that particular property and and they wanted to kind of have that benefit just sub kind of like a guaranteeish if they want to um go ahead and build out then we can look at an assignment section that provides certain provisions for financing. Um then the interpretation
risk of course we just talked about that we want to make sure that there are no ambiguous provisions so we can eliminate um having to come back and just make sure we have um just clear definitions for reimbursement prerequisites and um that our liability is explicitly limited
and then the project use right now it doesn't have our the agreement doesn't state what use the property needs to have. Um it would be a recommendation that it requires um that the continuous use of the property remain whether it
was a residential purpose, whether it was commercial um throughout the period of reimbursement, whatever period that is because if you're investing it to develop, you know, let's say residential, you don't want that torn down and then you have commercial, but
the project was done. So, these are just kind of some options for you guys to discuss and give me some feedback. I'll go back to the first page. So, I no one's talking so I guess I'll stop. I'm thinking
okay this it's a it's a lot to consider. It is a lot actually right and I think for me it's like you know where do we start and where do we start is like what what is the purpose of giving the tax breaks that's that's what what is that purpose is it just development is that
is that is that the purpose or is it to or is it something else I think it's twofold there I think you're right it is for development because if it isn't for development you know you don't have taxes so that trips that I think it's for development and then for the
carrying through through a period. U the question comes up for me is who benefits from the help that the city's giving back to incentivize these people to go on because when you when you help reduce
the cost um of of development, you help the existing owner. You don't help the new guy who pays the up step in it. And that puts us and the property in more jeopardy which is where it is now. So I
think the benefit should continue to whoever owns the property at that time and I think we disclose that to them. Now they can have have it assigned. They can agree to get it assigned through us through the board ahead of time or they
can work with the seller and say you did not get that. We're taking that back. They can do that in the private sector. I I I agree with you on that, but I also kind of agree with Daniel's point. If if it wasn't for that, then the thing wouldn't have gotten developed to begin
with. So, you know, who who's taking the more risk by by developing the the building or uh and we give that benefit to the person that really didn't take have the funding to to have it built to begin with. Does that make sense? Yeah.
No, that makes perfect sense. So I thought a step in that process would be if the property sold for greater than what its what it was what its value was where there was a step up then there wouldn't be if it sells for less then
yes it should probably stay with the original owner there's another option because that's a person who's hurt but I think there's a lot of stuff here's a lot of stuff all at one time I don't know that I can we can knock this
out in 15 Can you send this to us and let us take a look at it and study over and we have a workshop coming here or there maybe we can take an extra 30 minutes out of it by then and address it. Um I don't know when the next Do you have
any recommendations? Um I think everything in here with the exception of the tying the taxes to the developer per se but requiring proof of payment uh of the taxes and then you know limiting that exposure far as far as delinquency. Having it come back to the CRA whether
the property is sold um or if there needs to be an assignment gives you the control that you're looking for to determine whether you want it to continue to uh to be enforcable with the current um party or if you wanted to have it go over to the new party. So
that that really gives you the control that you're looking for there. And an option would be if they don't come and apply to to move on that's a condition, right? it would automatically terminate. Right. Right. Yeah. So, yeah, there's a lot of steps here. We're not attorneys. We need I need a flowchart to to figure
this out. Um, so I mean, I agree with Michael. Um, does everyone else agree that we just need to have this sent to us and look at it and see um and then we can we can reconvene. And because when you look at this, you see something in almost everything that could be in it. There's a lot of options, a lot of
steps, a lot. Well, if it helps, I mean, I can um I I have a sense of of where you guys are are wanting to go as far as really just kind of having that CRA component and the sale process, assignment process, and things like that. Not necessarily um who pays the
taxes per se because it could be and here's a situation, the taxes may be paid by, let's say that that particular person is having a hard time, but it's paid by their aunt or paid by a friend and they took out the receipt itself is going to show another name. However, taxes were paid and that's just a rel
something that they have to work out with somebody else, right? So, um it would make sense not to necessarily restrict it, but keep you involved in the event that this agreement does have to be assigned. So, because if he if he does do in the case of of of his case,
if he did have them assign it um or didn't assign it and he kept it and we allowed that and they don't pay their taxes, he shouldn't be hurt for that. So, and there's also it could be a condition of that particular sale because this is very contingent on market situation and and we don't want
to get into that. But I guess we're gonna come back to it. So, what I'll do is I'll go ahead. I was going to say one last thing and let's not for let's not forget about a tax certificate sale for deed. We need to make sure that's clarified too. And if you hold on a tax certificate with so many years, you get
to you get to apply for a tax deed. Correct. Right. Yeah, that's why we're looking at two plus uh so no more than two years delinquency. That's why I was trying to cut it off before it would go to taxdeed sale. Perfect. Okay, thank you. Okay, so that's and then if at the tax deed sale, consider this because Daniel talked about that if he buys the
original guy buys it back at the tax deed sale, he probably should get the benefit continuing. Uh so it's a lot of curves. There's a lot of turns. So you're saying it would end if it ends and he takes it out of in this case
takes it out of distress. Should he be entitled to that restart that? I mean I think he should. Uh but so there's a lot of moving parts but well the other thing I was listening to when he says it seems like he took the risk initially
to put his monies into it to build it and then if he sells it the risk was on him not on the the person who just bought it. So how do how do you remedy that? Well, again, if if the go if goes back
to the original person, I was just thinking about the scenario um that Commissioner Hody was discussing, he would redeem the tax certificates, that would be a way to protect your position, and you're the one that's going to push it through to taxdeed sales. So, that that could be um
a condition that can be added in addition to that. But I think that preparing something um I do have a draft already in the works just kind of comprising most of this and and giving you that that touch point before anything happens at the property and um
including just payment of the taxes and proof of that for now would be a a pretty good place to start. That way I don't bombard you with all this extra stuff. Okay. Anything else? I can see it. Okay. Okay. All right. All right. All right, we're journ until the city
commission meeting at 6:00.