FOR A 30 MINUTE OR. GOOD EVENING EVERYONE AND I WILL CALL THE CITY COUNCIL MEETING TO ORDER AS WE ARE HERE FOR A PORT AND CITY COUNCIL CONCURRENT MEETING. I THINK OFFICIALLY WE HAVE TO ESTABLISH WHO IS HERE. SO ARE WE DOING A ROLL CALL TO SEE TO OFFICIALLY ESTABLISH AN OR NOT? YEAH SHE'S ALL RIGHT. MARK DO YOU WANT TO CALL THE ROLL FOR THE PORT AUTHORITY? ERICKSON HERE. HUNT HERE. LUNS PETERSON HERE. SANTANA NELSON I SEE HERE. AND COULD YOU DO THE SAME FOR THE CITY COUNCIL JUST SO WE HAVE IT? I SEE HERE. NELSON HERE WE ARE HERE REVERSE CARTER HERE. DELLA SONDRA NO. WELL, VERY GOOD. WE GOT A QUORUM ON BOTH THE CITY COUNCIL AND THE PORT AUTHORITY. THIS IS A STUDY SESSION SO IT'S NOT WE DON'T NEED BEYOND A QUORUM FOR VOTES OR ANYTHING ALONG THOSE LINES. SO AND OUR ONE AND ONLY ITEM TONIGHT IS ITEM 3.1. THIS IS TO CONSIDER MALL OF AMERICA WATER PARK PRIVATE FINANCING AND WHY DON'T WE TURN IT OVER TO HOLLY AND KEVIN AND ANYBODY ELSE WHO'S GOING TO MOVE TO THE PODIUM AND SO GOOD EVENING COUNCIL AND COMMISSIONERS MIKE ALL RIGHT. OKAY. GOOD EVENING. MY NAME IS HOLLY MESSICK. I AM THE PORT AUTHORITY ADMINISTRATOR FOR THE CITY OF BLOOMINGTON AND I'M HERE WITH MY COLLEAGUE KEVIN KINNEY, THE ASSISTANT PORT AUTHORITY ADMINISTRATOR. >> GOOD EVENING AND I JUST WANTED TO ACKNOWLEDGE A FEW PEOPLE THAT ARE IN THE ROOM WITH US TODAY. WE ARE GOING TO BE DOING A PRESENTATION TO REMIND YOU ALL WHERE WE'VE BEEN WITH THIS PROJECT WITH THE WATERPARK FOR MALL OF AMERICA AND THEN AT THE END OF THE PRESENTATION WILL HAVE THE OPPORTUNITY FOR QUESTIONS. SO WE HAVE A NUMBER OF GUESTS WITH US FROM ALL OF AMERICA. WE HAVE KURT HAGEN, SENIOR VP OF DEVELOPMENT AND MARTIN WALRATH, EXECUTIVE VICE PRESIDENT OF CORPORATE FINANCE AND THEN ONLINE AND WE WILL HAVE LORI ECONOMY SHULER FROM THE CITY OF BLOOMINGTON, OUR CFO AND HOLLY HOUSTON, THE VICE PRESIDENT OF FINANCE FROM SAINT PAUL PORT AUTHORITY WHO CAN TALK TO US ABOUT SPACE LOANS. WE ALSO HAVE IN THE ROOM WITH US GINA FIORINI WHO IS OUR NEW PORT COUNSEL FROM Q TECH ROCK. IF YOU HAVEN'T MET HER YOU WANT TO WAVE GREAT AND THEN SHANE READ LENGTH OUR MUNICIPAL ADVISOR FROM ELAS AS WELL AS JULIE LONG, OUR CITY ENGINEER FROM THE CITY OF BLOOMINGTON FOR ANY PUBLIC IMPROVEMENTS QUESTIONS AND MELISSA MELISSA AMANDA SNYDER CITY ATTORNEY FROM THE CITY OF BLOOMINGTON. WE ALSO HAVE KATHY HARDIN, OUR DEPUTY CITY MANAGER AND KIM BERGER AND OUR COMMUNITY DEVELOPMENT DIRECTOR. SO I JUST WANTED TO NAME SOME OF THOSE NAMES FOR CONTEXT LATER ON FOR QUESTIONS THAT YOU MAY HAVE. ALL RIGHT. AND WE NEED OUR SCREENS SO WE'RE HAVING JUST A FEW TECHNICAL DIFFICULTIES BUT AS WE GET STARTED JUST WANT TO GROUND YOU ON WHERE WE ARE TODAY. AGAIN, WE'RE HERE TO TALK ABOUT A WATER PARK PROJECT FOR THE MALL OF AMERICA THIS HAS BEEN IN DISCUSSION IN EARNEST SINCE ABOUT 2018 HERE IN THE CITY OF BLOOMINGTON. BUT A WATER PARK HAS ALWAYS BEEN A PART OF THE POTENTIAL PLANS FOR MALL OF AMERICA. THEY HAVE A WATER PARK IN EDMONTON THAT IS PART OF THEIR MALL PROJECT THERE AS WELL AS ONE IN IN NEW JERSEY. THANK YOU. >> AND SO PART OF WHAT THE MALL IS HOPING TO DO IS CONTINUE TO DIVERSIFY THEIR OFFER OFFERINGS, KEEP THEM ALL FRESH AND INTERESTING AND TO MOVE FROM REALLY LEANING A LOT ON BRICK AND MORTAR RETAIL TO HAVING A MORE OF A MIXED RATIO OF RETAIL AND EXPERIENCES. NEXT SLIDE PLEASE . OH DEAR . THERE WE GO. HAVE YOU SHE SAID THAT YOU SAID IT WILL WORK NOW. ALL RIGHT. WONDERFUL. ALL RIGHT. SO OUR AGENDA FOR THIS EVENING IS QUICK SUMMARY AND RECAP OF THE PROJECT SOME KEY MILESTONES THAT BRING US TO WHERE WE ARE TODAY A REVIEW OF OUR TERM SHEET THAT WE APPROVED IN 2024. WE'LL DISCUSS THE PROJECT FINANCING BOTH THE PUBLIC FINANCING THAT THE PORT HAD PREVIOUSLY BOUGHT AND COUNCIL HAD PREVIOUSLY AGREED TO AS WELL AS THE PRIVATE FINANCING THAT MALL OF AMERICA HAS SECURED. WE WILL ALLOW THE MALL OF AMERICA SOME TIME TO PRESENT TO YOU THE PROJECT AND ITS IMPORTANCE AND THEN WE'LL TALK ABOUT PROJECT IMPACT TO THE COMMUNITY AND OUR ECONOMIC IMPACT AS WELL AS SOME RISKS OF THE PROJECT AND POTENTIAL NEXT STEPS. SO I MENTIONED SOME OF THE BACKGROUND THAT THIS HAS BEEN IN THE WORKS SINCE 2018. ANOTHER SIGNIFICANT MILESTONE HAPPENED IN 2021 WHEN THE STATE LEGISLATURE ALLOWED THE CITY TO DESIGNATE SOME OF ITS TAX INCREMENT FINANCING AS SPENDING PLAN TIFF MEANING IT COULD BE INVESTED DIRECTLY INTO A PROJECT RATHER THAN SPENT ON PUBLIC IMPROVEMENTS WHICH IS WHAT IS TYPICAL THAT WAS MEANT TO BE A COVID 19 ECONOMIC RELIEF MEASURE AND THAT IS THE FINANCING THAT WE WILL BE USING THE MAJORITY OF THE FINANCING THAT WILL BE USED ON THE PUBLIC SIDE FOR THE PROJECT. THE PROJECT ALSO CHANGED FROM SOME OF THE EARLIER ITERATIONS WHICH WERE A LITTLE BIT LARGER. WE NOW ARE LOOKING AT A PROJECT THAT IS 220,000FT FOR THE BUILDING ENVELOPE AND THEN 144,000FT WITHIN THE POOL HALL IT WILL HAVE ONE WAVE POOL AND A LAZY RIVER AS WELL AS 30 WATER FEATURES AND SLIDES. IT'S APPROXIMATELY THE SAME AMOUNT OF FEATURES THAT WERE ALWAYS INCLUDED OTHER THAN GOING FROM ONE WAVE POOL TO WAVE POOLS TO ONE PROJECT COST AT THIS POINT IS EXPECTED TO BE 432 MILLION. SO A FEW OF THE MILESTONES ALONG THE WAY WE DID APPROVE THE TERM SHEET AT AN APRIL 20TH 22ND 2024 MEETING AND THE TERM SHEET OUTLINED THE TERMS FOR THE FUTURE REDEVELOPMENT AGREEMENT, PUBLIC SUBSIDY AND EQUITY REQUIREMENTS AND STEPS REQUIRED TO UNLOCK 6.5 MILLION OF PURSUIT SPENDING FOR DESIGN ENTITLEMENTS AND SO ON. AND SINCE THAT TIME 555 HAS BEEN PURSUING THEIR PRIVATE FINANCING AND CITY STAFF HAVE BEEN WORKING WITH CONSULTANTS TO FINALIZE A REDEVELOPMENT AGREEMENT WITH 555 APRIL 2024 IS WHEN YOU APPROVE THAT TERM SHEET. YOU HAD THE OPPORTUNITY TO REVIEW THE TERM SHEET AGAIN APRIL 20TH, 25 555 WAS ABLE TO EXECUTE A SPACE TERM SHEET SO WE'LL TALK ABOUT THAT PARTICULAR FORM OF FINANCING IN A MOMENT. AND THEN IN JUNE OF 2025 WE GOT A LEGISLATIVE EXTENSION TO THE SPENDING PLAN TIFF WHICH ORIGINALLY EXPIRED AT THE END OF THIS YEAR AND WE NOW HAVE UP UNTIL THE END OF 2027 TO UTILIZE THAT MONEY DIRECTLY INTO A PROJECT AND THEN IN AUGUST OF 2025 555 WAS ABLE TO EXECUTE A TERM SHEET WITH INFINITE GLOBAL AND WE WILL TALK A LITTLE BIT MORE ABOUT THAT AS WELL AS WE GO ON NEXT SLIDE PLEASE . OKAY. FROM THIS POINT ON WE ARE HAVING OUR MEETING TONIGHT WHICH IS OUR STUDY SESSION AND THEN WE'RE PLANNING TO MEET AGAIN ON SEPTEMBER 30TH FOR ANOTHER CONCURRENT MEETING. AT THAT MEETING WE ARE LIKELY TO CONSIDER FOUR ACTIONS BUT THEY DO NOT ALL NEED TO HAPPEN ON SEPTEMBER 30TH IF WE NEED MORE TIME. ONE IS REDEVELOPMENT AGREEMENT APPROVAL. WE DO NOT HAVE THE REDEVELOPMENT AGREEMENT FINALIZED FOR YOU TODAY THAT WOULD BE DISPLAYED TO YOU BEFORE OUR NEXT MEETING WHERE WE ASK YOU TO VOTE ON IT. THE RELEASE OF 6.5 MILLION IN PURSUIT SPENDING DOLLARS THAT WAS PART OF THE ORIGINAL AGREEMENTS THAT WE NEGOTIATED BACK IN APRIL OF LAST YEAR APPROVING AN AMENDMENT TO EXTEND OUR SPENDING PLAN TO FOUR DEADLINE THAT IS THE LEGISLATURE ALREADY APPROVED THAT WE CAN MOVE THIS OUT TWO MORE YEARS. WE JUST NEED TO APPROVE THAT HERE IN THE CITY OF BLOOMINGTON AND THEN APPROVING UP TO 1 MILLION OF REGULAR TIFF FOR PUBLIC IMPROVEMENT DESIGN WORK ESSENTIALLY OUR PURSUE COSTS FOR THE PARKING RAMP, THE ANTICIPATED FUTURE TIMELINE FOR THIS PROJECT IS LATE 2025 TO EARLY 2026. WE'LL SEE DUE DILIGENCE AND PERMITTING FOR THE NEW WATER PARK DESIGN HERE AT THE CITY WE WILL CONSIDER ISSUING TIFF REVENUE BONDS FOR A PORTION OF THE PUBLIC IMPROVEMENT COSTS AND THEN IN SPRING 2026 WE ARE HOPING TO SEE CLOSING AND CONSTRUCTION STARTING AND THEN 2029 COMPLETION AND OPENING. OF COURSE THAT IS ALL SUBJECT TO CHANGES AS TIME GOES ON. NEXT SLIDE COULD YOU GET THE NEXT SLIDE MARKED ? THERE WE GO. OKAY. GOOD EVENING. IT'S HOLLY SHERROD. MY NAME IS KEVIN CANALS. I'M THE ASSISTANT PORT OR PORT AUTHORITY BOOTH TRADER HERE AND I'M GOING TO INTRODUCE THE PREVIOUS WATER PARK TERM SHEET THAT WAS APPROVED IN APRIL 2020 FOR AND THEN TALK ABOUT OUR PUBLIC FINANCING AS WELL AS THE PRIVATE FINANCING TERM SHEETS FOR THE WATER PARK PROJECT. SO THERE'S A LOT OF DETAIL ON THE SLIDES I'M GOING TO GO THROUGH IT KIND OF AT A HIGH LEVEL IN GENERAL THIS TERM SHEET WILL STILL STAND BASED ON WHAT WE'RE NEGOTIATING FOR THE FINAL REDEVELOPMENT AGREEMENT THAT WILL COME FORWARD AT A FUTURE MEETING. HOWEVER, THE FIRST ITEM ON HERE SO THAT CONSTRUCTION COST AS HOLLY SHARED HAS INCREASED FROM THAT $373 MILLION AMOUNT AND THEN AS PART OF THIS PROJECT THE POR WOULD BE CONTRIBUTING 160 MILLION OF TAX INCREMENT FINANCING SPLIT BETWEEN SPENDING PLANT IF THAT'S THE 85,000,074 UP TO 75 MILLION OF REGULAR TIFFS THAT'S TIFF THAT'S GENERATED BY THE MALL THE MALL WOULD OWN THE LAND AND THERE ARE SOME SPECIFICATIONS THAT THE VALUE OF THAT APPRAISED VALUE OF THE LAND AS WELL AS THE CITY HAVING ACCESS TO FINANCIAL RECORDS PURSUANT TO OUR CASH FLOW CAPTURE AGREEMENT WHICH WE WILL DETAIL IN FUTURE SLIDES THE TERM SHEET ALSO HAD SPECIFICATIONS RELATED TO THE FEES THAT THE MALL WOULD COLLECT AS PART OF THE DEVELOPMENT OF THE PROJECT. SO THAT'S THE DEVELOPER FEE AS WELL AS THE FEE FOR THE PUBLIC IMPROVEMENTS OR DEVELOPER FEE FOR THE WATER PARK AND PUBLIC IMPROVEMENTS ITSELF AND THEN MANAGEMENT FEE FOR OPERATIONS AND SO THAT MANAGEMENT FEE IS A BASE 3.5% AND THEN THERE ARE SOME PERFORMANCE INCENTIVES THAT EXIST TO ALLOW FOR 555 OR THE MALL TO INCREASE THAT TO 5%. THAT IS ANOTHER CHANGE THAT'S PROPOSED AS PART OF THIS TERM SHEET. SO AS OF THE PREVIOUS APPROVAL THAT WAS SUBORDINATED BASED ON SOME GUARANTEES THAT THE MALL IS BRINGING FORWARD AS PART OF THIS PROPOSAL. SO THE CITY STAFF ARE RECOMMENDING THAT WE DO ALLOW FOR THAT TO NO LONGER BE SUBORDINATED. AND THEN THIS LAST DETAIL HERE ON THE SLIDE IS ABOUT THE CASH FLOW CAPTURE WHICH WILL GO INTO A LOT MORE DETAIL ABOUT THAT AT SOME THAT GO TO THE NEXT SLIDE HERE AND WHILE WE'RE DOING THAT IN ADDITION TO THE CASH FLOW CAPTURE WHAT YOU'RE GOING TO SEE ON THE NEXT SLIDE IS ALSO GOING TO TALK ABOUT THE EQUITY REQUIREMENT. SO THERE ARE EQUITY REQUIREMENTS AT THE END OF THE PROJECT. SO THIS IS A DEFERRED EQUITY MODEL WHERE 555 WOULD HAVE TO BRING EQUITY IN AT THE END OF THE PROJECT TO END THE CASH FLOW RECAPTURE . PLEASE BEAR WITH US. OH THERE WE GO. I ADDITIONALLY IT ALSO OUTLINED SOME REQUIREMENTS RELATED TO PURSUE CASTLE AS YOU'RE AWARE THIS IS BEEN A LENGTHY PROJECT AND SO THERE IS A NUMBER OF PURSUE COSTS AND THE TERM SHEET SPECIFIED HOW SOME OF THOSE COSTS WOULD BE PAID FROM THE VARIOUS CAPTURE FUNDS THAT EXIST SO A PORTION FROM THE MSA PROJECT FUND AND THEN A PORTION FROM THE PART PROJECT FUND WHICH WILL BE DETAILED FURTHER IN SUBSEQUENT SLIDES AND THEN IT ALSO OUTLINED KEEPING STAFFING LEVELS AT CURRENT LEVELS THROUGH 2045 AND THEN CLICKING HERE YOU CLICK A THANK YOU I AND FOR THAT EMOJI PROJECT FUND. SO THAT'S FUNDS THAT WOULD BE HELD IN A THIRD PARTY ACCOUNT THAT IS NOT CONTROLLED BY THE CITY BUT THAT DOES REQUIRE APPROVAL OF THE PORT AND THE MALL FOR PROJECTS WITHIN BLOOMINGTON. AND SO THAT'S ITEM 13 AND THEN IN THE 24 APPROVAL THE SUSTAINABILITY COMMISSION HAD A NUMBER OF RECOMMENDATIONS AND THOSE WERE INCORPORATED HERE PORTION THEREOF INTO THE SUSTAINABLE DESIGN REQUIREMENTS. PROBABLY THE MOST IMPORTANT ONE OF THAT IS THAT THE DEVELOPERS WILL 555. IT HAS COMMITTED TO AT LEAST $5 MILLION WORTH OF SUSTAINABLE DESIGN IMPROVEMENTS WITHIN THE PROPERTY. AND THEN FINALLY THIS IS A NON-BINDING TERM SHEET. SO AS AS YOU HAVE SEEN THERE ARE SOME PROPOSED CHANGES IN THE SHEET. THE NEXT SLIDE PLEASE. SO THIS IS OUR SOURCES AND USES TABLE SO THIS IS SHOWING YOU THE PROJECT COSTS AND THE USES OF FUNDS IN ORDER TO FUND THOSE COSTS SO LOOKING AT THIS TABLE, THIS IS A $357 MILLION WATER PARK PROJECT WITH AN ADDITIONAL 75 MILLION OF PUBLIC IMPROVEMENTS. THE CITY WOULD BE BRINGING 85 MILLION OF SPENDING PLAINTIFF TO THE PROJECT THAT WOULD BE DISPERSED AND AVAILABLE AT THE START OF THE PROJECT AND THEN PARKING AND PUBLIC IMPROVEMENTS WOULD BE UP TO 75 MILLION AND A PORTION OF THAT WOULD BE A TIFF CASH THAT'S IN THE CITY'S ACCOUNTS AND THEN THERE WOULD HAVE TO BE A FUTURE DECISION ABOUT HOW MANY BONDS OR HOW MUCH IN BONDS TO ISSUE TO FUND THE REMAINDER OF THAT BASED ON DESIGN WORK THAT WOULD BE COMPLETED TO FINALIZE THOSE COSTS . OH, I THINK WE SKIPPED THE SLIDE THERE. THERE WE GO. SO AS I DETAILED THE 160 MILLION IS THE CITY'S CONTRIBUTION. SO THIS IS REALLY EQUITY FROM THE CITY BEING PUT INTO THE PROJECT AT LEAST 85 MILLION AND SPENDING PLAN TIFF IS CONSIDERED THE EQUITY AND THAT IS THE SPECIAL LEGISLATION THAT MS. MASON FRAMED THAT ALLOWS FOR THE CITY TO MAKE AN EQUITY CONTRIBUTION INTO THE PROJECT. SO THE CITY HAS PROVED THAT AMOUNT PER THE TERM SHEET IN THE PRIOR APPROVAL AND THEN THE 75 MILLION LIKE I FRAME WOULD BE A COMBINATION OF THE CASH THAT THE CITY HAS IN TIFF AS WELL AS REVENUE BONDS THAT WOULD BE ISSUED IN THE FUTURE MEETING OF THE CITY BODIES AND THEN FINALLY THIS FINANCING HAS A CASH FLOW PROVISION THAT WILL FRAME HERE IN JUST A MINUTE IT WAS IT BACK TO ME. OKAY, PERFECT. AND BEFORE WE GET TO THEIR CASH FLOW CAPTURE, WE'RE GOING TO TALK A LITTLE BIT ABOUT THE PRIVATE FINANCING. SO THERE ARE TWO TERMS IT'S THAT 555 IS EXECUTED FOR THIS PROJECT. THE FIRST IS WITH INFINITE GLOBAL REAL ESTATE PARTNERS AND THEIR AFFILIATES. SO THIS IS A PRIVATE LOAN FOR APPROXIMATELY $120 MILLION. IT IS A CONSTRUCTION LOAN WITH A 48 MONTH TERM AND IT HAS A INTEREST RATE AT 14.27%. THAT'S KIND OF AN ESTIMATED RATE. SO IT IS VARIABLE BASED ON MARKET CONDITIONS. AND THEN ONE THING WE WANTED TO POINT OUT AS PART OF THIS PROVISION IS A NEW TERM TO THIS IS THAT THERE IS A POTENTIAL SALE LEASEBACK AND IN THIS SITUATION THE LENDER WOULD HAVE THE OPPORTUNITY AT A CERTAIN AMOUNT OF REVENUE OR CASH FLOW THAT THE PROJECT IS PRODUCING TO PURCHASE THE REAL ESTATE ASSETS AND THEN 555 WOULD RETAIN THE BUSINESS ENTITY OF THE WATER PARK AND LEASE THE REAL ESTATE BACK AT A SPECIFIED PAYMENT AMOUNT AND THEN THE SECOND OF TWO TERM SHEET AND THIS IS IN FIRST LIEN POSITION BECAUSE THIS IS ASSESSED FOR A PROPERTY TAX ASSESSMENT IS A CEASE HER C PACE LOAN AND THIS IS APPROXIMATELY $133 MILLION AT A 7.43% ESTIMATED INTEREST RATE SO WE'RE LOOKING AT A BLENDED RATE ABOUT 10% AND THEN THE ST PAUL PORT AUTHORITY IS THE STATEWIDE ADMINISTRATOR FOR THIS PROGRAM AND THIS IS UPFRONT FINANCING THAT IS REPAID VIA THE PROPERTY TAX ASSESSMENTS AND AN ADDITIONAL ITEM THAT IS BEFORE YOU TODAY FOR CONSIDERATION IS THAT AS PART OF THESE TERM SHEETS THE LENDER HAS HAD TO PROVIDE GUARANTEES AND THESE REALLY COME IN THREE DIFFERENT FORMS. SO THE FIRST IS A LENDER CONTROLLED SECURITIES ACCOUNT. THIS IS DOLLARS OR LIQUID ASSETS THAT ARE IN THAT ACCOUNT THAT THEY CAN PULL UPON IF THE PROJECT DOES NOT PERFORM AND THAT'S REALLY MARKETABLE SECURITIES AND THE DEVELOPER FEE THAT WOULD BE PAID UPON CLOSING AND THEN THERE'S 22.5 MILLION OF PRINCIPAL RECOURSE AND IN EFFECT THIS IS SECOND MORTGAGES AGAINST PROPERTY. IT COULD BE PROPERTY IN BLOOMINGTON, IT COULD BE PROPERTY THAT 555 OWNS AND OTHER LOCATIONS AS WELL. AND WE'RE STILL IN DISCUSSIONS ABOUT WHAT THAT WOULD LOOK LIKE IN THE DOCUMENTATION TO SUPPORT THAT. AND THEN THE GRAZING FAMILY IS ALSO PROVIDING INTEREST CARRYING COMPLETION GUARANTEES FOR THE PROJECT AND I DON'T KNOW IF THOSE HAVE A SPECIFIED VALUE. I THINK THEY'RE TECHNICALLY UNLIMITED AND MR. HAGAN WHO'S HERE COULD SPEAK TO THAT FURTHER AND THEN AS PART OF PROVIDING THIS FINANCING AND THE TERM SHEET THE 555 IN THE CITY NEGOTIATED A RECAPTURE PROVISION WHERE IF CASH FLOW ALLOWS FUNDS WOULD FLOW INTO TWO ACCOUNTS AND THIS WOULD BE BASED ON CASH FLOW THAT THE PROJECT IS PRODUCING. AND SO 60% OF THAT WOULD FALL INTO THE MALL OF AMERICA DEVELOPMENT FUND. AND AS I SHARED EARLIER, THAT IS A THIRD PARTY ACCOUNT THAT IS IN ESCROW AND IT REQUIRES APPROVAL BOTH 555 IN THE CITY FOR MAORI DEVELOPMENT PROJECTS WITHIN BLOOMINGTON AND THEN THE PORT PROJECT FUND IS 40% SPLIT WHERE THE CITY COULD POTENTIALLY EARN A MINIMUM OF 40 UP TO A MAXIMUM OF 60 MILLION AND THAT WOULD BE FOR USE OF TIFF ELIGIBLE PROJECTS WITHIN BLOOMINGTON WITH A FOCUS ON CERTAIN THINGS LIKE SUSTAINABILITY CLIMATE RESILIENCE AS WELL AS AFFORDABLE HOUSING AND THIS CASH FLOW RECAPTURE WOULD CONTINUE UNTIL BOTH AT LEAST 100 MILLION IS COLLECTED AND THEN ALSO THE PRIVATE EQUITY IS BROUGHT INTO THE DEAL AND THIS CHART HERE IS A DEPICTION OF BASICALLY HOW THAT WOULD FUNCTION. SO THE MALL OR THE WATER PARK EARNS REVENUE, PAYS THEIR EXPENSES AND THEN THEIR DEBT SERVICE PAYMENTS AND THEN THAT BECOMES CASH FLOW THAT IS THEN PROFITS THAT IS DISTRIBUTED INTO THE TWO ACCOUNTS AND IN ORDER TO TERMINATE THAT CASH FLOW RECAPTURE FUTURE, A PRIVATE EQUITY WOULD HAVE TO BE BROUGHT INTO THE DEAL TO DO SO. AND SO THAT WOULD REQUIRE A MINIMUM OF $100 MILLION AS CAPTURED IN THOSE TWO ACCOUNTS AND THEN HOW THAT PRIVATE EQUITY FUNCTIONS IS IT'S 30% OF THE VALUE OF THE THE REAL ESTATE IN THE BUSINESS AT THE TIME WHERE THAT EQUITY IS BROUGHT INTO THE DEAL MALL OR 555 HAS THE ABILITY TO EARN HALF OF THAT AS INCREASING VALUATIONS OF THE PROPERTY. AND SO WHAT THAT REALLY MEANS IS THEY HAVE TO BRING 15% IN CASH AND WITH THAT I'LL TURN IT OVER TO MR. HAGAN . YOU CAN COME HERE TO THE RIGHT AND GO THE FANTASTIC GOOD EVENING, MAYOR BUSSE PRESIDENT ERICKSON, COUNCIL MEMBERS AND PORT COMMISSIONERS REALLY APPRECIATE THE OPPORTUNITY TO COME BACK TONIGHT AND IT'S IT'S BEEN A LONG TIME COMING WE'RE NOT QUITE THERE YET BUT I CAN SEE THE LIGHT AT THE END OF THE TUNNEL I BELIEVE AND I HOPE THAT'S NOT GOD. I HOPE THAT'S JUST WATER PARK PROJECT THAT WE CAN GET THIS COMPLETED SHOW APPRECIATE I APPRECIATE IT. FIRST WANT TO THANK STAFF AND FOR ALL THE TIME THEY'VE SPENT WITH US OVER THIS LAST YEAR, YEAR AND A HALF SINCE WE DID THE THE TERM SHEET WITH THE CITY AND WE KIND OF DEFINED THE PUBLIC FUNDING AGREEMENTS . WE'VE GONE TO THE MARKETS TO TRY TO ALIGN WITH THOSE PUBLIC AGREEMENTS. WE'VE WE'VE BROUGHT NUMEROUS IDEAS TO STAFF AND SPENT A LOT OF TIME WITH THEM WEEKLY CALLS WITH THEM VETTING THESE IDEAS AND I THINK WE FIND IT LANDED ON ONE THAT THAT ACTUALLY ALIGNS WITH THE THE CITY TERM SHEET AND WITH OUR GOALS AND OBJECTIVES AND SO I'M REALLY EXCITED TO BE HERE TONIGHT AND GIVE YOU KIND OF THE OVERVIEW OF IT MUCH OF THIS STAFF IS ALREADY OUTLINED IN THE STAFF REPORT A LOT OF IT YOU'VE SEEN IN PREVIOUS MEETINGS BUT I THINK IT'S IMPORTANT TO KIND OF REITERATE AGAIN SOME OF THE KEY PUBLIC BENEFITS NOT ONLY FOR YOUR BENEFIT BUT FOR THOSE THAT MIGHT BE ONLINE THAT ARE WONDERING, YOU KNOW, WHY IS BLOOMINGTON INVOLVED IN THIS WATER PARK PROJECT? AND SO I WANT TO OUTLINE A FEW OF THOSE YOU KNOW, THE FIRST WE KNOW WHY A WATER PARK WE TALKED ABOUT THIS I THINK AT THE LAST MEETING THAT I WAS HERE WHAT'S WHAT'S WHAT'S THE BIG DEAL ABOUT A WATER PARK AND ONE OF THE BIGGEST DEALS ABOUT THE WATER PARK IS ITS ABILITY TO DRIVE TOURISM TRAFFIC AND TOURISM APPROXIMATELY 700,000 GUESTS A YEAR OF WHICH APPROXIMATELY 40% ARE OVERNIGHT GUESTS THAT'LL GENERATE ABOUT 90,000 HOTEL ROOMS A YEAR. SO THERE IS ANOTHER PROJECT IN IN MINNESOTA OTHER THAN MALL OF AMERICA AND AND OUR MISSION PARK THAT CAN DRIVE THAT KIND OF TRAFFIC AND WHY THAT'S GOOD FOR BLOOMINGTON OBVIOUSLY THE LODGING TAXES THAT THAT CREATES AND THE 7% BLOOMINGTON LODGING TAX BUT ALSO WE KNOW FROM OUR EXPERIENCE OF THE ONSITE HOTELS THAT WE HAVE NOW THOSE HOTEL GUESTS PER NIGHT SPEND ABOUT $400 NOT IN THE WATER PARK OR NOT IN OUR AMUSEMENT PARK BUT IN THE MALL IN THE CITY RENTING CARS, HOTEL ROOMS, FOOD THEY'RE VERY PRODUCTIVE GUESTS THAT WE WANT TO ATTRACT TO NOT ONLY OUR PROJECT BUT TO BLOOMINGTON. SECOND REASON REALLY IS THE TAX GENERATION THAT SPENDS OFF OF THE TOURISM PIECE A LOT OVER $3 MILLION A YEAR IN NEW LOCAL TAX ALMOST $3.5 MILLION A YEAR IN NEW LOCAL TAXES YOU'LL SEE IN STAFF REPORT IT TALKS ABOUT OVER 2 MILLION A YEAR IN CITY TAXES. RIGHT. THERE'S A DIFFERENCE BETWEEN CITY TAXES AND LOCAL TAXES BECAUSE IN THE CITY TAXES YOU'RE NOT COUNTING THE PORTION OF THE LODGING TAXES THAT GO TO THE PORT. YOU'RE NOT COUNTING THE PORTION OF LODGING TAXES THAT GO TO BLOOMINGTON. TRAVEL AND TOURISM. YOU'RE ALSO NOT COUNTING LOCAL OPTION SALES TAX THAT CHEF IS CHOOSING TO KEEP THAT OUT OF THE TOTAL BECAUSE THAT'S THERE'S A TERMINATION ON THAT AT SOME POINT WHEN THOSE PROJECTS ARE PAID OFF. BUT IF YOU INCLUDE LOCAL OPTION SALES TAX AND THE ALL OF THE LODGING TAXES IN YOUR FIVE IT'S GOING TO BE ABOUT $3.5 MILLION A YEAR IN NEW LOCAL TAXES, ABOUT 5 MILLION A YEAR IN NEW STATE AND REGIONAL TAXES RATE. THIS IS WHY THE CITY HAS OR THE STATE HAS BEEN SO SUPPORTIVE OF OUR PROJECT. THEY UNDERSTAND WHAT THE TOURISM WHAT THE TAXES DO NOT ONLY FOR BLOOMINGTON, NOT ONLY FOR THE REGION BUT ALSO FOR THE STATE OF MINNESOTA STRENGTHENING MALL'S FUTURE WE'VE TALKED ABOUT THIS AND IN SEVERAL OF THE MEETINGS AND STAFF HAS COVERED THIS IN THE STAFF REPORT AS WELL. IT'S REALLY IMPORTANT NOT ONLY TO MALL OF AMERICA AND OBVIOUSLY IN OUR OWNERS BUT TO THE CITY OF BLOOMINGTON AND I THINK ALL OF YOU UNDERSTAND THAT THE MALL IN AND OF ITSELF TYPICALLY GENERATES ABOUT 11 OR 12% OF THE TOTAL GENERAL FUND DOLLARS EACH YEAR TO BLOOMINGTON. HOSPITALITY COMMUNITY GENERATES ABOUT THE SAME. SO BETWEEN MALL OF AMERICA AND THE HOSPITALITY COMMUNITY THAT'S ROUGHLY 20 TO 24% OF YOUR TAX REVENUES EACH YEAR DEPENDING ON THE YEAR. SO IT'S IMPORTANT FOR US AND I THINK AS HOLLY MENTIONED, WE REALLY NEED TO DIVERSIFY OUR MIX. WE'VE TALKED ABOUT THAT OUR GOAL IS TO GET CLOSER TO A 5050 MIX OF ENTERTAINMENT AND RETAIL. TODAY WE'RE CLOSER TO 7030 WITH AFTER THE WATERPARK WILL BE ABOUT 6535 BUT WHEN THE OTHER PROJECTS ARE ADDED ON THAT WE ENVISION FOR PHASE TWO IT WILL EVENTUALLY GET US CLOSER TO THE 5050 MIX CATALYST FOR FUTURE DEVELOPMENTS WAS IMPORTANT TO ME. I'M THE DEVELOPMENT GUY RIGHT SHOW AS YOU HEARD THE FIRST $100 MILLION AT MINIMUM WILL BE CAPTURED FROM WATER PARK PROFITS AND USED TO BE REINVESTED IN BLOOMINGTON. THE 6040 SPLIT PROJECTS THAT YOU SEE THE ATHLETIC FACILITY AMATEUR SPORTS COMPLEX EXHIBIT HALL OR CONFERENCE SPACE MIXED USE SPACE WE'VE BEEN TALKING ABOUT THOSE ABOUT AS LONG AS WE'VE BEEN TALKING ABOUT WATER PARK RIGHT. WE'VE NEVER HAD A FUNDING SOURCE TO MOVE THEM FORWARD. THIS IS PART OF THE REASON WHY WE CREATED THIS MECHANISM TO KIND OF RECYCLE THOSE TIFF DOLLARS BACK AND REINVEST THEM IN THE PROJECT AND THAT'S WHAT THIS IS INTENDED TO DO. THE PUBLIC FUNDING SOURCE AGAIN THIS IS ONE THAT THAT MANY IN THE PUBLIC DON'T UNDERSTAND RIGHT. WHERE DO THESE DOLLARS COME FROM? THEY COME FROM OUR PROPERTY TAXES MALL AMERICA'S PROPERTY TAXES. THAT IS THE ONLY PUBLIC FUNDING SOURCE. IT'S TAX INCREMENT FINANCING. WHAT IS VERY UNIQUE ABOUT THE TAX INCREMENT FINANCING AND UNIQUE TO BLOOMINGTON IT'S NEVER BEEN DONE BEFORE NOR IS THE STATE TYPICALLY A TAX INCREMENT FINANCING. WHEN A CITY HAS A TIFF DISTRICT IT CAPTURES THE LOCAL PORTION OF THE PROPERTY TAXES THAT WOULD OTHERWISE GO LOCALLY. SO A PROPERTY TAX BILL GENERALLY GETS SPLIT THREE WAYS WE MAIL A PROPERTY TAXES TO THE COUNTY ROUGHLY A THIRD GOES TO THE STATE, A THIRD GOES TO THE COUNTY. IN THIS CASE THE FISCAL DISPARITIES POOL AND A THIRD GOES TO THE CITY. TYPICALLY IN IN ALL OTHER CASES TIFF PROJECT IS BLOOMINGTON. YOU WANT TO BUILD SOMETHING IN BLOOMINGTON AND IT'S A TIFT DISTRICT. YOU CAN CAPTURE THE PORTION THAT WOULD OTHERWISE GO TO BLOOMINGTON TO REINVEST IN BLOOMINGTON. IN THIS CASE IT'S CAPTURING THE REGIONAL DOLLARS FOR A LOCAL PROJECT THAT HAS REGIONAL AND STATEWIDE BENEFITS. SO THERE IS NO BLOOMINGTON TAX DOLLARS INVOLVED IN THIS AT RISK IN THIS PROJECT. ALL THE PLAN EFFECTS YOU KNOW WHY YOU KNOW I'VE TALKED ABOUT THIS BEFORE WHY IS THIS UNPRECEDENTED OPPORTUNITIES BECAUSE WE'VE GOT UNPRECEDENTED STATE TOOLS THAT WERE PROVIDED TO US BY THE STATE OF MINNESOTA. AS I SAID, ALL PUBLIC BENEFITS COME AT NO COST A RISK TO THE CITY OF BLOOMINGTON, NO FINANCIAL RISK THAT IS THE UNIQUE TOOLS REALLY GO BACK TO YOU KNOW THE STATE HAS BEEN VERY SUPPORTIVE OF OF TRYING TO ADVANCE OUR PHASE TWO DEVELOPMENT STARTED WITH THE LOWERING OF LINDA LANE PROVIDING PUBLIC FUNDING FOR THAT, GIVING US REGIONAL TIFF AS I JUST MENTIONED HAS NEVER BEEN DONE FOR FOR A PRIVATE PROJECT BEFORE THEN PROVIDING SPECIAL PURPOSE TIFF WHICH ALSO IS YOU KNOW THAT HAS BEEN DONE BEFORE AT LEAST ONE OTHER OCCASION FOR AS AN ECONOMIC DEVELOPMENT TOOL BUT VERY UNIQUE TO BE ABLE TO USE THAT DIRECTLY IN A PROJECT LIKE THE WATER PARK AND THEN PROVIDING AGAIN A TIFF EXTENSION THE STATE REALLY WANTS TO SEE US GET THIS PROJECT DONE AND THEY'VE GIVEN US EVERYTHING WE NEED. I BELIEVE TO TO ACCOMPLISH JUST THAT. SO WHAT'S CHANGED? I THINK KEVIN COVERED SOME OF THIS FROM FROM THE TERM SHEET THAT WE THE PUBLIC FUNDING TERM SHEET THAT WE AGREED TO A YEAR AND A HALF AGO A YEAR AND A HALF AGO WE REALLY THOUGHT INTEREST RATES WOULD COME DOWN AND CREDIT MARKETS WOULD GET BETTER. THEY HAVEN'T ACTUALLY INTEREST RATES HAVE ACTUALLY GONE UP AND CREDIT MARKETS ARE EVEN TIGHTER THAN THEY WERE WHEN WE SIGNED THIS AGREEMENT. DID THE PUBLIC FUNDING AGREEMENT A YEAR AND A HALF AGO WHAT WE'VE HAD TO DO IN ORDER TO ADVANCE THIS PROJECT IS TO CREDIT ENHANCE THE DEBT 555 SEEING AND KNOWING THE IMPORTANCE OF THIS PROJECT TO MALL OF AMERICA AND TO 555 HAS AGREED TO PROVIDE SIGNIFICANT LOAN GUARANTEES TO THIS PROJECT AND THAT WAS NECESSARY TO GET THIS FINANCING IN PLACE. SO THAT'S NEW WHEN WE WHEN WE WERE TALKING ABOUT THIS PROJECT A YEAR AND A HALF AGO, THIS WAS A NON-RECOURSE LOAN THE ONLY RECOURSE BEING TO THE PROJECT ITSELF. THERE'S NO SIGNIFICA GUARANTEES IN PLACE TO PROTECT THOSE LENDERS WHICH HAS ALLOWED FOR US TO GET THESE TERM SHEETS THAT THAT WE NOW HAVE. THE REGIONAL PUBLIC INVESTMENT CARRIES MUCH LESS RISK NOW THAN IT DID A YEAR AND A HALF AGO BECAUSE OF THIS, YOU KNOW, HUNDRED MILLION DOLLAR PLUS GUARANTEES THAT ARE THERE SITTING IN FRONT OF THE PUBLIC INVESTMENT WHO CARRIES THE RISK? AGAIN, WE'VE KIND OF TALKED ABOUT THIS. THE RISK IS REALLY BORNE BY 555 AND THE PRIVATE LENDERS. RIGHT. THE FIRST LOSS POSITION ARE IS THOSE GUARANTEES IF THERE'S A PROBLEM WE'RE IN WE'RE IN POSITION ONE TO BACKSTOP THAT PROBLEM. SECONDLY, WE ARE ALSO PROVIDING, YOU KNOW, THE LAND THAT'S UNDERNEATH THIS WATER PARK. IT'S CONTRIBUTED TO THE PROJECT THAT IS AT RISK. THIRD, IT'S REALLY THE LENDERS ,RIGHT? THEY BEAR THE REPAYMENT RISK IF THIS THING CAN'T PRODUCE ENOUGH REVENUE TO REPAY THE DEBT, THEY'RE GOING TO FORECLOSE, TAKE THE PROJECT BACK, RECAPITALIZE IT. NEW OWNER COMES IN, OPERATES A WATER PARK MUCH LIKE YOU'VE WE'VE SEEN IN OTHER PROJECTS IN THIS COMMUNITY. IT WILL BE A WATER PARK FOR THE PUBLIC SIDE AGAIN, THERE'S NO BLOOMINGTON TAXPAYER EXPOSURE BUT THE CITY OR THE STATE AND THE REGION REALLY GET WHAT THEY'RE BARGAINED FOR EVEN IF THIS PROJECT IS FORECLOSED UPON AND A NEW OWNERSHIP GROUP COMES IN RIGHT. THEY WANTED THE CONSTRUCTION JOBS. THOSE HAPPEN. THEY WANTED THE REGIONAL TAXES AND TOURISM THAT'S STILL HAPPENS. THE CITY LOCAL TAXES THOSE STILL HAPPEN. IT'S JUST UNDER A DIFFERENT OWNERSHIP GROUP. >> THE OUTCOME SCENARIOS ARE YOU KNOW IT'S BASICALLY WE'RE EITHER MOVING FORWARD OR WE'RE NOT. IF WE MOVE FORWARD ALL OF THE BENEFITS THAT WE'VE TALKED ABOUT IN THE PAST, THE 700,000 PLUS ANNUAL GUESTS, THE MILLIONS OF NEW LOCAL TAXES, THE REINVESTMENT IN BLOOMINGTON AND THE MALL SUSTAINABILITY ARE ALL THERE IN FRONT OF US IF WE DON'T HAVE THE CITY CHOOSES NOT TO MOVE FORWARD OR THE PORT OBVIOUSLY THERE'LL BE ADDITIONAL FINANCING DELAYS WHILE WE TRY TO FIX WHATEVER THAT PROBLEM MIGHT BE AND SEEK DIFFERENT FINANCING SOLUTIONS THE JOBS AND THE ECONOMIC DEVELOPMENT THAT THE STATE IS SEEKING BY PROVIDING THESE TOOLS OBVIOUSLY WOULDN'T HAPPEN IF WE DON'T MOVE FORWARD AND AND I THINK WE WOULD HAVE NO CHOICE BUT TO GO BACK TO THE STATE AND LOOK FOR ADDITIONAL ASSISTANCE TO FIGURE OUT, YOU KNOW, WHAT OTHER TOOLS MIGHT WE NEED TO ADVANCE THIS PROJECT. SO IN SUMMARY, YOU KNOW, THE BLOOMINGTON TAXPAYERS WON LAST TIME HAS NOTHING TO LOSE AND AND EVERYTHING TO GAIN. THERE'S NO FINANCIAL RISK TO BLOOMINGTON OR ITS RESIDENTS AND THE REAL RISK I BELIEVE IS REALLY FAILING TO ACT ON THIS OPPORTUNITY THAT'S BEEN GIFTED TO US, IF YOU WILL, BY BY THE STATE IN THE REGION TO CREATE THIS PROJECT AND THE LOCAL BENEFITS THAT IT WOULD CREATE ON THE PROJECT IS A VERY TRANSFORMATIVE ECONOMIC AND TOURISM DRIVER FOR NOT ONLY THE MALL BUT ALSO FOR BLOOMINGTON AND THE REGION WHICH IS WHY A REGIONAL SOURCE IS BEING USED FOR THE PUBLIC FUNDING. AND LASTLY THE LOAN STRUCTURE AS KEVIN MENTIONED ALIGNS WITH THE TERMS THAT WE OUTLINED KIND OF THE REQUIREMENTS FOR THE PUBLIC FUNDING AND I WOULD ARGUE IS ACTUALLY BETTER. IT'S A BETTER DEAL FOR THE PUBLIC THAN THAN WHAT WE HAD ENVISIONED A YEAR AND A HALF AGO BECAUSE OF THE LOAN GUARANTEES THAT ARE NOW IN PLACE TO OFFER FURTHER PROTECTION. AND WITH THAT YOU TOLD ME TO KEEP IT QUICK. I WILL KEEP IT QUICK AND WE'LL STAND FOR QUESTIONS. YES. OH , WE HAVE JUST A FEW MORE SLIDES SO THANK YOU FOR YOUR PATIENCE AND THANK YOU MR. HAGAN FOR YOUR PRESENTATION. SO WE AGREE THERE ARE MANY BENEFITS TO THIS PROJECT. IT'S A RECREATIONAL AMENITY TO THE CITY AND THE TWIN CITIES REGION AND THE MALL ALSO DRAWS A NUMBER OF NATIONAL AND INTERNATIONAL VISITORS AS WELL. SO WE WANT TO CONTINUE TO KEEP THE MALL HEALTHY AND CONTINUE TO DRAW NEW AUDIENCES TO THE MALL. THIS ADDS SOUTH RESILIENCY TO SOUTH LOOP IN MY WAY WE WANT TO KEEP THIS AMENITY THE MALL AND THE SURROUNDING TOURISM INFRASTRUCTURE FRESH THE TAX REVENUE FROM MALL OF AMERICA AND PRESUMABLY FROM THIS WATER PARK WOULD DEFRAY PROPERTY TAX PAID BY RESIDENTS SO I'M OKAY IS 9.4% OF THE CITY'S PROPERTY TAX BASE AND HOTELS ARE 6.1% OF THE CITY'S PROPERTY TAX BASE AND WE KNOW THAT MANY HOTEL STAYS CAN BE ATTRIBUTED TO OR ASSOCIATED WITH MALL OF AMERICA. THIS PROJECT AS WE HAVE PROPOSED IT WOULD INCLUDE EXCLUSIVE DISCOUNT TICKET PRICES FOR CITY RESIDENTS AND THE PROJECTION PROJECTED WATER PARK REVENUE CAPTURES ADDITIONAL POTENTIAL POTENTIAL FUNDING STREAM FOR THE CITY WHICH IS EXCITING TO US AS STAFF. IT COULD BE USED FOR SUSTAINABILITY AND AFFORDABLE HOUSING PROJECTS. WE CAN ALSO LOOK TO YOU AT PORT AND COUNCIL FOR GUIDANCE AND HOW YOU WOULD LIKE THAT FUNDING TO BE SPENT AND THEN THE MAUI PROJECT FUND COULD SERVE AS GAP FINANCING ON FUTURE DEVELOPMENT PROJECTS. YOU SAW IN KURT'S RENDERINGS THE HOPE TO SEE PERHAPS A HOTEL OR OTHER TYPES OF DEVELOPMENT THAT SPINS OFF OF THIS WATER PARK SOME OF THE ECONOMIC IMPACT THAT WE ANTICIPATE SEEN INCLUDE IT INCLUDES ADMISSIONS TAX AT AN ADDITIONAL 1.1 MILLION A YEAR IN THE FIRST YEAR LIQUOR TAX AT AN ADDITIONAL 45,000 A YEAR PROPERTY TAXES AT AN ADDITIONAL 2.75 MILLION A YEAR 450,000 OF THAT WOULD GO TO THE CITY'S GENERAL FUND NEW LODGING TAX ESTIMATES AT APPROXIMATELY 329,000 A YEAR AND THEN TOTAL ESTIMATED ADDITIONAL TAX RENUE TO THE CITY WOULD BE 1.8 MILLION. THERE ARE RISKS TO THIS PROJECT. THERE ARE RISKS THAT THE PROJECT CANNOT PAY ITS DEBT. AS CURT STATED, 555 WOULD BE RESPONSIBLE FOR THE DEBT PAYMENTS THAT WOULD NOT BE ON BLOOMINGTON TAXPAYERS. IT IS VERY LIKELY TO REMAIN A WATER PARK DUE TO THE VALUE OF THE ASSET ONCE IT'S CONSTRUCTED BUT IT DOES MEAN THAT WATER PARK CASH FLOW COULD NO LONGER BE CAPTURED FOR FUTURE PROJECTS. THERE HAVE BEEN A NUMBER OF MARKET DYNAMICS AND UNCERTAINTY AND CONTINUE TO BE. WE DON'T KNOW WHAT WILL HAPPEN WITH INTEREST RATES TARIFFS CONTINUE TO BEFUDDLE US AND SO WE DON'T NECESSARILY KNOW FIRMLY THE COSTS OF THE PROJECT MOVING FORWARD. THERE'S THE TIMING OF FUTURE EQUITY IN THE DEAL THAT WE HAVE NEGOTIATED WITH 555. THEY NEED TO BRING EQUITY LATER ON. WE DON'T KNOW EXACTLY WHAT YEAR THAT WILL HAPPEN IN. THERE'S OF COURSE THE CITY'S REPUTATIONAL RISK. THIS IS A SIGNIFICANT PUBLIC INVESTMENT OUT AND YOU ALL NEED TO FEEL CONFIDENT ABOUT IT. SALE LEASEBACK THAT IS A NEW ELEMENT OF THE NEGOTIATIONS THAT WE'RE LOOKING AT. IF THAT OCCURS IT WILL INTRODUCE A NEW PROPERTY OWNER PURSUIT SPENDING LOSS IF THE PROJECT DOESN'T START CONSTRUCTION WE WILL HAVE LOST THE 6.5 MILLION THAT WE'VE ADVANCED TO THE PROJECT AND THEN WE ARE GLAD TO SEE TRIPLE FIVES GUARANTEES THEY DO ALLEVIATE SOME OF THE RISK OF LOWER CASH FLOW BUT THAT IS STILL A RISK AS WELL. AND IF BUT AS AS MR. HAGAN POINTED OUT, THERE ARE RISKS OF NOT DOING THE PROJECT YOU ARE ALL AWARE OF THEM AS WELL . WE DO NOT WANT TO SEE MORE OF AMERICA'S PERFORMANCE DECLINE. THEY ARE SIGNIFICANT ECONOMIC GENERATOR FOR THE CITY AND THE REGION AND THEY BELIEVE THAT A WATER PARK IS THE NEXT STEP TO HELPING THEM GROW AND THRIVE HERE. AND THEN THERE ARE LIMITATIONS ON THIS SPECIAL PERMIT THE SPENDING PLAN TIFF THAT WE HAVE THERE'S A LIMITED AMOUNT OF TIME THAT WE CAN SPEND WHAT WE HAVE THROUGH 2027 AND INVEST IT DIRECTLY INTO A PROJECT AND ONCE THAT EXPIRES WE CAN ONLY USE IT ON PUBLIC IMPROVEMENTS AND THE PUBLIC IMPROVEMENTS ARE LIKELY TO BE ASSOCIATED WITH PRIVATE DEVELOPMENT. SO WE REALLY WANT TO TAKE ADVANTAGE OF THIS OPPORTUNITY THAT WE HAVE RIGHT NOW LOOKING AT NEXT STEPS AS WE WRAP UP OUR MEETING TODAY, WE ALREADY HAVE ON OUR CALENDAR A MEETING FOR SEPTEMBER 30TH. I MENTIONED AT THE BEGINNING OF THIS MEETING THERE ARE FOUR ACTIONS THAT WILL TAKE PLACE AT THAT TIME INCLUDING POTENTIALLY THE REDEVELOPMENT AGREEMENT APPROVAL IF WE COMPLETE IT BY THAT TIME THE THAT WOULD ALSO BE ASSOCIATED WITH THE RELEASE OF THE 6.5 MILLION IN PURSUIT SPENDING DOLLARS APPROVING AN AMENDMENT TO EXTEND THE SPENDING PLAN TIFF THAT IS JUST EXTENDING OUR DEADLINE AND THEN APPROVING UP TO 1 MILLION OF REGULAR TIFF FOR PUBLIC IMPROVEMENT DESIGN. AND THEN AGAIN WE'RE LOOKING AT A LATE 2025 TO EARLY 2026 CLOSING AND DUE DILIGENCE PERIOD WITH SPRING 2026 CONSTRUCTION START AND ANTICIPATED 2029 COMPLETION AND OPENING. AND WITH THAT I WOULD LIKE TO INVITE MR. HAGAN BACK UP AND WE ARE HAPPY TO TAKE YOUR QUESTIONS . WELL THANK YOU FOR THAT. COUNCIL QUESTIONS HOUSE MEMBER NELSON YEP. THANK YOU MAYOR AS ONE TO CLARIFY AND CONFIRM A FEW THINGS THERE ARE THE FOUR PUBLIC SOURCES THERE ARE 6.5 MILLION OF PURSUIT COSTS 1 MILLION THERE'S THE MOA TIFF AND THEN THERE'S A SPENDING PLAN TIFF CAN YOU EXPLAIN WHERE THOSE SOURCES OF MONEY COME FROM? YES. WOULD YOU LIKE TO HEAR FROM MAYOR COUNCILMEMBERS COMMISSIONERS COUNCILMEMBER NELSON SO THE SOURCES THAT YOU FRAMED THEY ALL COME FROM THE TIFF THAT IS GENERATED BY MALL OF AMERICA AND THE SPECIAL LEGISLATION ALLOWED FOR A PORTION OF THAT TO BE USED FOR SPECIAL PURPOSES SO THAT 85 MILLION STILL COMES FROM THAT MOA TIFF. IF WE DON'T USE IT FOR THAT PURPOSE THEN IT WOULD BE RETURNED AS REGULAR TIFF TO THE PROJECT IS MY UNDERSTANDING AND I MIGHT DEFER TO OUR COUNCIL TO CONFIRM THAT IF I'M MISSPEAKING INCORRECTLY THE 6.5 MILLION WOULD BE A PORTION OF THAT SPENDING PLAN TIFF SO AS HOLLEY FRAMED IF WE WERE TO DISPERSE THOSE FUNDS AND THE PROJECT DID MOVE FORWARD OR DID NOT MOVE FORWARD, THERE IS A RISK THAT WE MAY NEED TO FIND ANOTHER SOURCE FOR THOSE DOLLARS. THE REASON THEY'RE BEING IS THAT THERE ARE REQUIREMENTS WITH THE SPENDING PLAN TIFF FOR CONSTRUCTION JOBS AMONG OTHERS AND IF THAT PROJECT DOESN'T MOVE FORWARD AND WE'VE SPENT THOSE FUNDS THEN WE'RE NOT MEETING THOSE REQUIREMENTS POTENTIALLY. AND THEN THE 1 MILLION THAT YOU FRAME SO THAT'S THE REGULAR TIFF THAT WOULD BE USED FOR THE PUBLIC IMPROVEMENTS. SO THAT'S DESIGN RELATED EXPENDITURES PRE-DEVELOPMENT KIND OF DESIGN COST IN ORDER TO FIRM UP THE BUDGET FOR THE PUBLIC IMPROVEMENTS. MAYOR IF I MIGHT FOLLOW UP JUST QUICKLY CAN YOU CAN YOU CLARIFY IS THIS THE FISCAL DISPARITIES? TIFF OH YES. COUNCILMEMBER NELSON SO THIS IS THE FISCAL DISPARITIES TIFF AT LEAST A PORTION THEREOF AND SOME OF THE AMOUNTS IN THE ACCOUNT MAY HAVE BEEN TIFF AT EARLIER DATES. I DON'T KNOW THE EXACT NUMBER IS THERE SO I WOULD LIKE TO FOLLOW UP WITH THAT QUESTION AT A LATER DATE IF THAT'S OKAY . OKAY. THANK YOU . I ACTUALLY JUST GOT A COUPLE OF COMMENTS. THE OTHER THING THAT I WANT TO DO IS IS WELCOME MARTIN ROJAS I THINK THEY PULLED YOU OUT OF RETIREMENT 2 OR 3 TIMES ON THIS PROJECT. SO IT'S IT'S GOOD TO SEE YOU HERE AND HAVE YOU, YOU KNOW, PARTICIPATE. I THINK AS WE LOOK AT THIS THING, THE NUMBERS ARE VERY COMPLEX AND SO I'VE GOT A COUPLE OF SIMPLE THINGS THAT I'VE ALWAYS HAD ON WHEN WE'VE BEEN TALKING ABOUT THIS AND AND THAT IS THAT REALLY ALL OF THE MONEY THE CITY IS TALKING ABOUT IS FENCED MONEY IN FENCED MONEY JUST MEANS IT CAN'T BE USED FOR SOMETHING ELSE. SO WE HAVE THE MONEY IN THE ACCOUNTS AND THIS IS SOMETHING THAT IT'S DEDICATED FROM FOR LEGISLATIVE PURPOSES OR BY LEGISLATIVE INTENT. AND SO IT HAS TO BE USED FOR THIS A PROJECT LIKE THIS. I THINK THE SECOND THING THAT I AGAIN JUST REITERATING IT'S IN SOME OF OUR NUMBERS BUT THE FINANCIAL RISK TO THE CITY I WOULDN'T SAY THERE'S THERE'S THERE'S NEVER NO RISK BUT I THINK THE RISK IS MINIMAL BECAUSE WE HAVE MOST OF THE FUNDS ON HAND FOR THIS ALREADY OR WE KNOW WHERE THE THE FISCAL DISPARITIES TIFF IS GOING TO BE GENERATING FUNDS IN THE FUTURE. THERE WOULD BE A SMALL FINANCING REQUIREMENT WHICH WOULD BE REVENUE BONDS IF FOR THE PARKING RAMPS. AND SO AGAIN THAT'S IN A SITUATION THAT IF THAT IS DONE THAT THE TAXPAYERS IN BLOOMINGTON WILL NOT BE ON THE HOOK FOR THAT IF SOMETHING HAPPENS. SO I THINK WE JUST HAVE TO TO KEEP THAT THESE KIND OF SIMPLE THINGS IN MIND AS WE LOOK AT THIS BECAUSE IT'S SO EASY TO GET CAUGHT UP IN ALL THE COMPLEXITY. I THINK THE OTHER THING THAT WOULD BE GREAT TO DO IS WE'VE HAD SHANE REDLINE WHO HAS BEEN WORKING ON THIS FOR YEARS AND I'M GLAD TO HAVE THE CONTINUITY AND HAVE HIM CONTINUE WITH PERHAPS SHANE HAS JUST A COUPLE COMMENTS ABOUT HIS EXPERIENCE AND WHERE HE'S AT AND IF YOU CAN ELUCIDATE US ON ANYTHING SAY I'M PUTTING YOU ON THE SPOT BUT THAT'S WHAT YOU'RE PAID FOR. THANK YOU MR. PRESIDENT. COMMISSIONERS. MAYOR COUNCILMEMBERS YEAH. SO YOU KNOW IT'S EXCITING TO BE BACK TALKING ABOUT THE WATER PARK PROJECT. I'LL MAKE ONE CORRECTION TO THE PRESENTATION IN THAT IT WAS THE DAY AFTER THE VOTE FOR THE EXPO THE FIRST GO AROUND IN 2017 THAT THIS PROJECT REALLY STARTED WITH HER HAGAN CALLING ME THE NEXT MORNING AFTER I HAD SPEAR EXPO OVER WANTING TO PUSH THIS FORWARD AND SO I'M BEING FLIP OF COURSE BUT NO IT'S IT'S IT'S EXCITING TO TO SEE THAT IT COULD BE A REALITY AND YOU KNOW WE'VE ALL BEEN WORKING ON THIS FOR A LONG TIME SO I'M NOT SURE IF THAT'S THE COMMENTARY THAT YOU WERE LOOKING FOR. BOB IT IS IT IS A VERY COMPLEX PROJECT THAT'S THE MOST COMPLEX FINANCING THAT THAT I'VE BEEN INVOLVED IN EVEN IN MY NEW ROLE FOR SURE. SO THERE'S A LOT TO IT AND WELL I THINK IT'S FAIR TO SAY, SHANE, THAT I MEAN AGAIN YOU'VE BEEN ALL OVER ALL THESE NUMBERS AND HAVE SEEN ALL OF THEM AND AND IT'S A VERY COMPLEX PROJECT BUT I THINK IT'S SOMETHING THAT IS CRITICAL AND WAS SAYING IT KIND OF WEAVES BETWEEN ALL THE LINES AND ENCOMPASSES THESE THINGS THAT WE'VE BEEN TRYING TO DO AND I THINK ACTUALLY I THINK YOU AND I WERE ACTUALLY INVOLVED. I REMEMBER SITTING IN A ROOM AT MARTIN HOFFMAN MAYBE A FEW YEARS EARLIER TALKING ABOUT ANOTHER ITERATION OF THIS. SO AT ANY RATE SO FOR 30 QUESTIONS COMMENTS MR. HART I UM I THANK YOU FOR THE INFORMATION AND IN YOUR MIND AND THE INFORMATION AND SHANE FOR YOUR COMMENTS TOO. I STILL HAVE AN ISSUE AND THAT'S MAYBE A MOOT POINT BUT AT THE LACK OF THE UPFRONT EQUITY I LIKE HEARING ABOUT THE MOVEMENT FROM NON-RECOURSE TO RECOURSE BUT I'M NOT HEARING MAGIC WORDS ABOUT, YOU KNOW, ACTUAL DOLLARS AND THERE'S YOU KNOW, THERE'S KIND OF WHAT IS THE ACTUAL WHAT ARE THE ACTUAL GUARANTEES? I'M NOT HEARING CASH IN THERE ON THE PART OF THE INDIVIDUALS AND YOU KNOW, I'M HEARING MARKETABLE SECURITIES AS GOOD BUT TYPES AND QUALITY AND AND ULTIMATELY SKIN IN THE GAME YOU KNOW BEYOND JUST HEY WE'RE GOING TO MAKE IT WORK KIND OF A THING WHERE I'M LIKE TO RESPOND TO THAT. WE'RE GOING TO HAVE THE EXPERT NOW AND UNFORTUNATELY THEY HAVEN'T BROUGHT ME BACK FROM RETIREMENT BECAUSE I HAVEN'T HAD THE OPPORTUNITY. WELL, I KNOW THERE WAS SOME DISCUSSION, MARTIN, THAT YOU WERE TRYING TO GET OUT RIGHT, WITH RESPECT TO THE GUARANTEES ,THERE'S EFFECTIVELY $20 MILLION OF CASH COLLATERAL OR LIQUID COLLATERAL THAT WOULD BE READILY CONVERTIBLE TO CASH . OKAY? SO IN A SENSE THAT MEANS YOU CAN HAVE CERTIFICATES OF DEPOSIT OR OTHER INVESTMENT VEHICLES THAT ARE RELATIVELY EASILY CONVERTED TO CASH. SO WE LOOK AT IT AS $20 MILLION OF CASH NOW THAT IS ACTUALLY PROVIDED NOT AS THE FIRST RESORT. IF THERE'S A PROBLEM IT'S HELD BY THE LENDER AS IT'S A LAST RESORT. SO ALL OF OUR OTHER GUARANTEES ACTUALLY COME AHEAD OF IT IN TERMS OF SEEKING CLAIMS AGAINST US. SO WE PROVIDE A COMPLETION GUARANTEE AND WE HAVEN'T YET NEGOTIATED FOR CURT TO PROVIDE THAT PERSONALLY AS WELL AS THROUGH OUR CORPORATE ENTITIES . BUT KURT WILL CERTAINLY BE DEDICATING HIS NEXT FEW YEARS TO ASSURE WE HAVE A PROJECT THAT OPENS ON TIME ON BUDGET. WE'RE OBVIOUSLY VERY COMFORTABLE WITH THE GMP CONTRACT WE'LL HAVE FROM RYAN. YOU KNOW GOOD REGIONAL PEOPLE REALLY KNOW THEIR BUSINESS BUT NEVERTHELESS SO WELL SET IN TODAY'S WORLD THERE'S MUCH MORE UNCERTAINTY ABOUT THE NEXT SIX MONTHS, THE NEXT YEAR ETC. AND SO WE HAVE PROVIDED THAT COMPLETION GUARANTEE ANY COST OVERRUNS THAT ARE OR COST DELAYS THAT OCCUR IN THE PROJECT THAT LEAD TO CASH REQUIREMENTS OR ARE WE FOOT THAT BILL IN ADDITION TO THAT EVEN POST OPENING THE PROJECT THERE COULD BE THROUGH THE RAMP UP OF THE PERFORMANCE OF THE PROJECT ALTHOUGH WE EXPECT IT TO ACTUALLY RAMP UP GIVEN THAT IT'S OPENING IN AT MALL OF AMERICA WHICH IS ALREADY OUR NUMBER ONE DESTINATION FOR RETAIL TOURISM IN THE UNITED STATES, 25 TO 30 MILLION VISITORS ETC. WITH THAT EXISTING MATURITY OF THE PROJECT WE THINK THE RAMP UP WILL BE RELATIVELY QUICK AND WE'VE PROVIDED FOR THAT WITH INTEREST RESERVES THAT KIND OF NATURAL PROTECTION IN THE LOAN BUT NEVERTHELESS ANY SHORTFALLS WOULD BE AGAIN ON THE GUARANTOR TO TOP UP WHATEVER THE CASH FLOW DEFICIENCY WAS TO ENSURE THAT THE LENDERS ARE GETTING THEIR FULL INTEREST PAYMENTS DURING THAT RAMP UP PERIOD OF TIME. IN ADDITION TO THOSE TWO WE PROVIDE A $22.5 MILLION PRINCIPAL REPAYMENT GUARANTEE SO THAT WE GET THE PROJECT OPEN WITH WHATEVER COSTS THAT MIGHT HAVE BEEN INCURRED IN COMPLETION GUARANTEES. WE GET THE PROJECT CASH FLOWING WITH WHATEVER ADDITIONAL COSTS THEY'RE INCURRED UNDER THE GUARANTEE FOR THE INTEREST CARRY RAMP UP PERIOD OF TIME. NOW IT'S TIME TO REFINANCE THE PROJECT. WE PROVIDE A $22.5 MILLION PRINCIPAL GUARANTEE PLUS THEY'RE STILL HOLDING THE $20 MILLION OF CASH OR CASH LIKE SECURITY. SO IN EFFECT IN THE REPAYMENT PROCESS THERE'S A $42.5 MILLION CUSHION FOR THE LENDER AS REPAYMENT BEFORE THEY WOULD BE AT RISK IN THE PROCESS. SO THE EXPOSURE FALLS LARGELY ON US IN EACH OF THOSE SCENARIOS WHERE WE'RE OBVIOUSLY EXPERIENCED REAL ESTATE DEVELOPERS, WE'RE GOING TO BE PUTTING ALL OF OUR ATTENTION TO THE DETAIL TO MAKE SURE THAT WE LIMIT THAT EXPOSURE AND EVERY STEP OF THE WAY. BUT IT'S STILL A SUBSTANTIAL EXPOSURE AND COMMITMENT FROM THE COMMISSION 555 ORGANIZATION TO ENSURE THAT THIS PROJECT GETS BUILT AND I THANK YOU FOR THAT. I JUST WANTED TO MAKE SURE THAT WE WEREN'T HAVING CROSS COLLATERAL PLEDGES AND WHAT WE'RE GETTING IS ACTUALLY AND IN THAT DOES IT DOESN'T HAVE TO BE DISCUSSED NOW BUT TO MAKE SURE STAFF AND IS WELL AWARE OF THAT AND LOOKING AT THE TRUE FINANCIAL PICTURE AGAIN NOT NECESSARILY TONIGHT BUT THE CONCERN THAT AND YES, WE WOULD ANTICIPATE EVERYTHING WOULD BE HONORED AND YOU HAVE THE WHEREWITHAL TO DO THAT. BUT JUST TO ACTUALLY REVIEW THE INFORMATION TO SEE CONFIRM THAT. THANK YOU. WELL, MARTIN, YOU CAN SEE WHERE WE REALLY APPRECIATING HAVING SYMPHONY CYNTHIA ON THE BOARD BECAUSE SHE KNOWS HOW TO WORK OUT THESE BANKING QUESTIONS PROBABLY BETTER THAN MOST OF US. SO MR. LUNTZ. HI. THANKS ROBERT. I THINK I HAVE ONE QUESTION BUT THE ANSWER MAY LEAD TO A SECOND ONE AND IT'S A QUESTION I GOT FROM MY SON WHEN HE WAS SEVEN YEARS OLD AND IT TAKES A BIT OF A LEAD IN BUT AND I ASK IT QUITE OFTEN HE WAS GETTING HIS TONSILS OUT AT CHILDREN'S HOSPITAL ON A GURNEY OR READY TO GO INTO SURGERY. THE E.A. DOCTOR CAME IN, TOLD HIM YOU'RE GOING TO GO TO SLEEP, WE'RE GOING TO PUT A MASK ON YOUR FACE WITH A FLAVOR ON IT BUBBLE GUM OR ORANGE AND YOU'RE GOING TO COME SLEEP. WE'RE GOING TO TAKE YOUR TONSILS. SO DO YOU HAVE ANY QUESTIONS? AT SEVEN YEARS OLD HE LOOKED AT YANTE DOCTOR RIGHT NOW AND HE SAID HAVE YOU EVER DONE THIS BEFORE? AND SO MY QUESTION RELATES TO THE PERSONAL GUARANTEE HAVE THE GRAMMARIANS EVER HAD A PERSONALLY GUARANTEE TO THIS EXTENT ONE OF THEIR DEVELOPMENTS TO GET IT BUILT AND ACCOMPLISHED AND AND THEN I'LL LET IT SORT OF THAT IT'S NOT COMMON BUT THERE'S A PHRASE IN LENDING CIRCLES ABOUT HAVING A WARM BODY GUARANTEE THAT'S BEYOND A CORPORATE ENTITY OF WHICH WE ARE PROVIDING CORPORATE ENTITY WITH THE ASSETS WITHIN THEM AND THE LIQUIDITY WITHIN THEM AS GUARANTORS. SO THE WARM BODY GETS TO THE PERSONS AT HAND, PARTICULARLY WHEN YOU'RE A PRIVATE INSTITUTION. SO THE FACT THE ANSWER IS IS YES, THERE HAVE BEEN PERSONAL GUARANTEES PROVIDED THEY'RE OFTEN DONE IN THE FORM OF AGAIN I HATE TO USE NOMENCLATURE BUT BAD BOY CARVE OUT GUARANTEES ASSURANCES OF INDIVIDUALS THAT NO BAD ACTS CAN OCCUR WHICH WOULD BE DONE TO DECEIVE OR TO WORK AROUND THE OBLIGATIONS THEY HAVE BY HAVING THE INDIVIDUALS WHO ARE THE PEOPLE THAT ARE ACTUALLY RUNNING THE ORGANIZATION YOU HAVE A HIGHER COMFORT THAT THEY WILL ENSURE THAT THERE IS NOTHING THAT COULD PUT THE PROJECT AT RISK OTHER THAN THE RISKS OF THE DEVELOPMENT NATURE ITSELF. OH ALSO BEING AN OLD LENDER IN A FORMER LIFE IT HAS BEEN DONE BEFORE IN THE FORM OF MORTGAGE GUARANTEES FOR OTHER DEVELOPMENTS. I GUESS I JUST WANT TO BE CLEAR ABOUT THAT IT HAS BEEN DONE BEFORE. YEAH. OTHER QUESTIONS I JUST WANT TO MAKE ONE MORE COMMENT. THIS WAS ON THE SUBORDINATION AND I CALL THE MANAGEMENT FEES AND I WAS PROBABLY ONE OF THE DRIVERS ON THAT IN MANY OF THE NEGOTIATIONS. AND THE REASON FOR THAT WAS AS WE WERE JUST TRYING TO YOU HAVE TO LOOK AT THE DOWNSIDE AS WELL AS THE UPSIDE. AND SO WHAT I'VE ALWAYS FELT IS IMPORTANT TO DO IS TO GIVE THE PROJECT SOME ADDITIONAL BREATHING ROOM IN EFFECT AND THAT'S WHERE THOSE FEES CAME IN. SO WE'VE REALLY HAD A SUBSTITUTION AND PROBABLY THE 20 OR $30 MILLION WOULD BE ROUGHLY EQUIVALENT TO THE MANAGEMENT FEES I THINK IF THEY WERE SUBORDINATED WE WOULD GLADLY TREAT THE LENDERS RIGHT. COUNCILMEMBER BEAMER, I'LL MAKE A COMMENT HERE. I THINK THE LAST TIME YOU WERE IN FRONT OF US MY BIGGEST CONCERN WAS THAT 555 THOUGHT THIS WAS A GOOD IDEA. WE MIGHT THINK IT'S A GOOD IDEA BUT DOES THE MARKET REALLY THINK IT'S A GOOD IDEA? SO FOR ME HEARING THAT YOU HAVE FOUND A PARTNER WHO IS WILLING TO DO THE BACKGROUND RESEARCH TO ENSURE THAT THIS IS A GOOD PROJECT THAT WE'VE ALL THOUGHT MAKES A LOT OF SENSE TO ME AND SO THANK YOU FOR DOING THAT WORK. I KNOW THE MARKET IS UP AND DOWN. NO ONE KNOWS WHAT'S GOING ON BUT THE FACT THAT PEOPLE ARE STILL LOOKING FOR OPPORTUNITIES TO INVEST IN PROJECTS LIKE THIS TO ME MEANS THAT THAT THIS CAN BE A VIABLE PROJECT AND HAVING THEM DO THAT BACKGROUND RESEARCH TO CONFIRM EVERYTHING WE'VE DONE GIVES ME A LOT MORE CONFIDENCE THAN THE ONLY NUMBER THAT SCARES ME IS THAT 14.26% INTEREST RATE. WE DON'T KNOW WHERE IT'S GOING TO GO. THE FED IS SAYING THEY MIGHT DROP RATES HERE BUT WHO KNOWS AND I KNOW YOU CAN ALWAYS REFINANCE AND THINGS LIKE THAT BUT THAT'S THE ONLY NUMBER THAT THAT SCARES ME A LITTLE BIT. MAYBE IT'S BECAUSE I DON'T HAVE THAT EXPERIENCE MY OWN EXPERIENCES WITH MORTGAGE AND IF I HAD A MORTGAGE OF 14 SOME PERCENT I'D BE REALLY SCARED. SO APPRECIATE YOU FOR THAT. THANK YOU. SOME OF US IN THE 80S MAY REMEMBER THAT THERE WERE MORTGAGES IN THE TEENS. BUT YOU'RE RIGHT IF I IDENTIFIED ONE THING THAT SCARES US OR GIVES US REASON TO PAUSE IT IS THAT. BUT WHAT THE REASON FOR THAT IS WE HAVE A BIFURCATED LOAN STRUCTURE. THE 133 MILLION C PAGE LOAN WHICH IS A SUPER PRIORITY POSITION IN THE LOAN STRUCTURE CARRIES A VERY ATTRACTIVE, I THINK COUPON RATE. YOU KNOW IT'S FLEXIBLE IN THE SENSE OF IT FLUCTUATES RATHER BUT IT WILL BE SOMEWHERE PROBABLY IN THE 7 TO 7.5% RANGE. SO THAT GETS AVERAGED OUT WITH THE HIGHER RATE WHICH IS A REFLECTION OF THE FACT THAT THE PARTY LENDING THERE IS BROAD IN IN A SUBORDINATE POSITION WHICH ALWAYS LEADS TO A SUBSTANTIALLY HIGHER COUPON RATE. THERE. AND IT WILL BEHOOVE US TO PURSUE A REPLACEMENT FINANCING TO GET MORE OF THAT NORMAL PERMANENT FINANCING FIXED RATE AT THE EARLIEST OPPORTUNITY AFTER OPENING AND NORMALIZATION OF PERFORMANCE. SO WE'RE HIGHLY INCENTIVIZED TO DO THAT REFINANCE THING AT THAT TIME. BUT YOUR OBSERVATION AND CONCERN WITH IT I CAN'T DISPUTE THAT THERE IS SOME CONCERN THAT GOES WITH IT. THANK YOU FOR THAT BACKGROUND. THAT'S REALLY HELPFUL. THANK YOU . I HEARD ONE QUESTION FROM A PORT AUTHORITY MEMBER JUST MARK WHY DON'T YOU MARTIN GIVE YOUR FULL TITLE AND TELL HOW MANY YEARS YOU'VE GONE WITH 555. I DON'T KNOW THAT WE REALLY INTRODUCED YOU. I'VE KIND OF SAID WE'VE SEEN YOU BEFORE. I STARTED WITH TRIPLE 5 IN 1990 AND SO I'VE BEEN INVOLVED IN ALL WEST EDMONTON MALL FINANCINGS, ALL OF THE MALL OF AMERICA PHASES FROM WHEN WE WERE PARTNERS TO WHEN WE TOOK FULL OWNERSHIP AND THEN PROCEEDED WITH FINANCE THERE. AND I'VE HAD THE PLEASURE OF WORKING ON THE AMERICAN DREAM PROJECT IN NEW JERSEY FOR THE LAST TEN YEARS A PROJECT WHICH WAS OPENING A THREE DAY DAYS IT TURNS OUT AFTER THE STATE OF NEW JERSEY CLOSED FOR COVID. SO NOW WE'VE WE'VE ENJOYED THE PLUSES AND THE MINUSES THAT COME WITH THIS TYPE OF DEVELOPMENT ACTITY. WE PULLED WHO WAS HERE AT THE TIME THAT MALL OF AMERICA FIRST OPENED AND THERE WERE A NUMBER FROM OUR MALL OUR TEAM THAT THAT WERE THERE. SO WE TEND TO BE LONG STANDING EMPLOYEES OF THE COMPANY. BUT YEAH I'VE I'VE BEEN WITH 555A LONG TIME AND WE'VE BEEN I FOCUS ONLY IN THIS TYPE OF CORPORATE FINANCE WORK. THANK YOU COUNCIL REPORT ANY QUESTIONS? LAST CALL IS I HAVE A QUESTION . I'M SORRY FOR SENTIMENT IN THE RISK SECTION IS THERE REALLY NO WAY TO OFFSET THE RISK OF THE IF THERE'S A TRANSFER TO ANOTHER OWNER THAT THE CITY NOT BE ABLE TO RECOUP ANY OF THEIR FUNDS? COMMISSIONER SANTANA AND MEMBERS I THINK I MAY HAVE NOT STATED THAT EXACTLY PERFECTLY. THE TRANSFER TO ANOTHER OWNER WAS SIMPLY THAT WE WILL NEED TO UNDERSTAND HOW TO WORK WITH ANOTHER OWNER. WE'VE BEEN DEALING WITH 555 AT THIS PROPERTY FOR A LONG TIME . SO THAT WAS THAT WAS FROM THE RISKS PAGE CORRECT? YES. YES. THAT WOULD APPLY TO BOTH THE SALE LEASEBACK SCENARIO OR THE DEFAULTS ON THE LOAN ARE THE DEFAULT ON THE LOAN SCENARIO IS IS A DIFFERENT ISSUE AND YES, AT THIS POINT WE'RE STILL WORKING OUT THE PARTICULARS OF HOW THAT WOULD LOOK IF THAT SHOULD OCCUR. SO WE WILL GET YOU THAT ANSWER. JUST JUST ONE COMMENT ON THE SALE LEASEBACK THAT WE'RE DEALING WITH. I THINK IT'S A $35 BILLION MARKET CAP PUBLIC REAL ESTATE INVESTMENT TRUST REIT THERE THERE ACTUALLY ARE REALLY WELL QUALIFIED FOR THIS TYPE OF ACTIVITY. THEY SPECIALIZE IN EXPERIENTIAL OR ENTERTAINMENT, HOSPITALITY AND OTHER AREAS. AND IF YOU LOOK BACK TO THE CHART OF WHAT OUR PHASE TWO WOULD LOOK LIKE WITH YOUTH SPORTS EXHIBIT HALL, POSSIBLY A CONFERENCE OR CONVENTION CENTER, THEY ACTUALLY ARE ACTIVE IN ALL OF THOSE AREAS. SO FROM OUR PERSPECTIVE THEIR POSITION IS START WITH THE WATER PARK OF WHICH THEY ACTUALLY OWN A NUMBER OF WATER PARKS WITH SALE LEASEBACK ARRANGEMENTS TO THEM. SO THIS IS NOT THEIR FIRST WATER PARK EXPERIENCE WHICH IS VERY HELPFUL TO US THAT THEY HAVE THAT KNOWLEDGE BUT THEY ARE A COMPANY OF I THINK THEY HAVE 28 EXECUTIVES. THEY'RE VERY LEAN. THEY HAVE NO INTEREST IN OPERATING. THEY ARE PARTNER IN EFFECT WITH PEOPLE SUCH AS OURSELVES AND THEN THEY'RE VERY PASSIVE IN TERMS OF THE PROPERTY THEY OWN THE REAL ESTATE. BUT WE OWN THE OPERATIONS AND THE PROFITS THAT ARE GENERATED ABOVE WHAT WOULD BE A THEY CALL IT A LEASE PAYMENT. IT'S EFFECTIVELY LIKE A FIXED INTEREST RATE THAT WE PAY. THE GOOD NEWS IS IS YOU'RE GETTING A 50 YEAR FIXED RATE BUT THEY DO HAVE A FEE SIMPLE INTEREST IN THE ASSET BUT WE WILL BE THE DEVELOPER AND THE OPERATOR MANAGER OF THE PROPERTY EVEN UNDER THE SALE LEASEBACK. SO THESE GUYS USUALLY CALL UNLESS WE HAVE ADDITIONAL QUESTIONS OR COMMENTS LIKE TO THANK YOU FOR THE PRESENTATION AND THE INFORMATION THAT YOU PROVIDED. IT'S GREATLY APPRECIATED AND THANKS TO OUR STAFF AS WELL. NEXT STEPS WE WILL BE BACK TOGETHER ON THE 30TH TO TO CONSIDER THIS AT ANOTHER CONCURRENT SESSION BETWEEN THESE TWO BODIES. AND HOLLY, I THINK WE WERE HOLDING THE 23RD BUT WE CAN TAKE THAT HOLD OFF NOW. OH. PRESIDENT ERICKSON OR MEMBERS. WE WILL TAKE CARE OF THAT. OKAY. ALL RIGHT. WELL WELL, AS THE COUNCIL HAS WRAPPED UP OUR BUSINESS, I WOULD ENTERTAIN A MOTION TO ADJOURN TONIGHT. SO MOTION BY COUNCILMEMBER SECOND BY COUNCILMEMBER CARTER TO ADJOURN THIS COUNCIL SECTION OF THE MEETING. NO FURTHER DISCUSSION ON THIS. ALL THOSE IN FAVOR PLEASE SIGNIFY BY SAYING I OPPOSED MOTION CARRIES. I HAVE ZERO AND I WILL ADJOURN THE PORT AUTHORITY. OKAY GOOD. THANK YOU ALL VERY MUCH. AND IF YOU