R2003-66 AUTHORIZING INFRASTRUCTURE FUNDING AGREEMENT

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Economic 8� Urban Development Department Mernorandum ', # 03-36 ! Ma 9 2003 I Y � TO: Honorable Mayor Paul Osborne and City Council Members I FROM: Steve Garman, City Manager � A.J. Krieger, Assistant City Manage SUBJECT: Wabash Crossing Phase 1 Infrastructure Funding Agreement ' RECOMMENDATION: City staff recommends that the attached infrastructure funding agreement between the City of Decatur, Decatur Housing Authority, and EastLake Management & Development Corp. be approved as presented. BACKGROUND: Article 2, Section 2.2.1 of the three-party development agreement between the City, DHA, and EastLake establishes the City's commitment to provide up to $2.6 million ($300,000 of which was for overall master planning and neighborhood plan development) for Phase 1 infrastructure construction. That same section contemplated the partiEs involved would later establish a mecha.nism for disbursing infrastructure funds. The attached infrastructure funding agreement establishes tha.t process. As written, the agreement calls for infrastructure funds to be disbursed through an escrow agent; but only after the City has both approved pre-construction plans and had the opportunity to inspect and approve actual construction in the field. The contractor performing the work will submit requests to draw upon the infrastructure funds as work is completed, inspected, and approved. Phase 2 Work Comaleted in Phase 1 —Eghibit B. As the Phase 1 final plans have been prepazed, EastLake,DHA, and the City have agreed that for the benefit of the entire project, it makes sense that certai.n Phase 2 infrastructure components be constructed as part of Phase l;described in Section 1 (Scope of Work)of the agreement. E�ibit B to the agreement is a promissory note requiring the City to repay a loan from HOPE VI in the amount of$1,311,764. HOPE VI is loaning the City that amount to cover the cost of the work described in Section 1. The terms of the note require the City to repay the loan at the time of the Phase 2 closing. If for whatever reason the project did not pmceed to a closing for Pha.se 2, the City would not repay the loan until the later of 24 months after its execution or 30 days after it was determined there would be no Phase 2. While the scope of work being funded by the loan is attributable to la.ter phases, it has been determined that performing it as part of Phase 1 is beneficial to the entire project; both aesthetically and functionally. Repayment of the loan will be made as part of the City's expected contribution to infrastructure improvements and will not increase the praject's overall cost to the City. In no way wilt repayment of this loan cause the City's total infirastructnre contribution to egceed $10,354,414; as identified in Resolution R2002-109 approved by Council in June 2002.