pages: CityCouncil/2010-07-20.pdf, 21
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CityCouncil | 2010-07-20 | 21 | expectations with respect to guarantees. The Deputy City Manager - Development Services stated the DDA has hurdle rates whereby SunCal wants to be able to meet a 25% Internal Return Rate (IRR) and 25% profit; the CIC would not be participating in the profits until SunCal meets both the 25% IRR and 25% profit. The City Attorney/Legal Counsel stated Section 7.5.2.3.1 requires the CIC to make up the difference in the event that SunCal does not receive the 25% IRR. Mayor/Chair Johnson inquired whether the last, best, and final offer is a public document, to which the Deputy City Manager - Development Services responded in the affirmative. Jim Musbach, EPS, stated five determination dates have been established; any cash flow over the 25% goes to the City; the City would get 30% of the cash flow; half would go to a reconciliation account; at the fifth reconciliation date, the City would have to remit money from the account to make SunCal whole at 25%; the City would have a 15% participation subordinate to a 25% return with some upside potential to get to 30%. Councilmember/Board Member/Commissioner Gilmore inquired whether the City would be coming up with new cash or cash would be coming out of the project, to which Mr. Musbach responded cash would come out of the project. Councilmember/Board Member/Commissioner Tam inquired what staff would like to see in the DDA. The Deputy City Manager - Development Services responded staff would recommend starting to participate sooner than both of the 25% hurdle rates. Councilmember/Board Member/Commissioner Tam inquired whether said information has been communicated with SunCal. The Deputy City Manager - Development Services responded staff has not had detailed discussions with SunCal regarding profit participation; the pro forma attached to the DDA shows a 20% return, which would not meet the hurdle rates; provisions were incomplete in the first draft that staff received. The Public Works Director stated staff expected to see the last, best and final offer sooner rather than later and expected that all concerns would be addressed; some concerns were addressed; the last, best, and final offer became more restrictive, is in the best interest of SunCal, and is against what the City was negotiating for. Special Joint Meeting Alameda City Council, Alameda Reuse and 9 Redevelopment Authority, and Community Improvement Commission July 20, 2010 | CityCouncil/2010-07-20.pdf |