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RES 2004-1596 - KDI Omaha LP Tif redevelopment project plan MAHA,/yF o*: �.v Planning Department �,� RECEIVED . Omaha/Douglas Civic Center W.Tir � ,� 1819 Famam Street,Suite 1100 f'+SviiridAc r 04 DEC —8 FM 2: 12. Omaha,Nebraska 68183 oa= =`,, •. (402)444-5150 OR'r'D FE80)1' CITY CLERK Telefax(402)444-6140 OMAHA, NEBRASKA RobertC.Peters City of Omaha Director Mike Fahey,Mayor December 14, 2004 Honorable President And Members of the City Council, The attached Resolution transmits the Sorensen Park Plaza Tax Increment Financing (TIF) Redevelopment Project Plan proposed for the former Vickers, Inc plant site located at 6600 North 72"d Street. The attached redevelopment plan proposes the commercial redevelopment of the redevelopment site at 6600 North 72nd Street into an 80-acre commercial shopping complex. The proposed project site, Sorensen Park Plaza, will be converted into a 600,000 sq. ft.•shopping center. The site is generally bounded by Sorensen Parkway on the north, Crown Point Avenue to the south, 72nd Street on the east and the Stillmeadow 2nd Addition subdivision abutting the site on the west. The redevelopment project site includes all of the abutting and adjacent rights-of-way that will receive improvements as may be documented in the traffic study, mandated by the City of Omaha Public Works Depa.tiiient and indicated in the attached redevelopment plan. Proposals were submitted concurrently with the submission of the Sorensen Park Plaza Tax Increment Financing (TIF) Redevelopment Project Plan to the Planning Board that requested changes in zoning, platting, land use and site development regulations at the project site and in the general area. The proposed changes submitted to the Planning Board and recommended by the Planning Department are consistent with the redevelopment plan and changes proposed for the redevelopment project area. The approved changes in•zoning, platting, land use, and site development are incorporated into this plan as a part of the plan as though included in, a part of and or attached to the plan. The Planning Board, as required by Nebraska Community Development Law has previously approved the requested designation of the project site as Substandard and Blighted, approved the Sorensen Park Plaza Tax Increment Financing Redevelopment project Plan, and approved an amendment to the Master Plan to change the entire project site to a community value 165-acre Mixed Use District (MU) as a part of the subdivision process by a 6 to 1 positive vote. Sorensen Park Plaza will contain a mix of appropriate businesses that will provide goods and services that are not totally available in the target market area east of 72"d Street. The proposed site plan illustrates the proposed user types and placement of specific businesses. Honorable President and Members of the City Council Page 2 KDI Omaha, L. P. has requested the approval of the Sorensen Park Plaza Tax Increment Financing (TIF) Redevelopment Project Plan to identify TIF as a tool to finance $8,490,000.00 of eligible expenses as a portion of approximately $12,288,000.00 in TIF eligible cost. The Tax Increment Financing of $8,490,000.00 for eligible expenses is based on estimated hard cost of $48,150,783 containing site development cost of approximately $16,000,000.00. The TIF is approximately 18% of the total project hard cost. . Tax Increment Financing can be used to offset acquisition, demolition, site preparation, grading, excavation, compaction and public improvements. Approximately $7,194,705.00 of the TIF will be used for sewer and street improvements with all other cost covered with private funding. The approval of the Sorensen Park Plaza Tax Increment Financing (TIF) Redevelopment Project Plan proposed for the former Vickers, Inc plant site located at 6600 North 72nd Street will provide an opportunity to assist in the renovation and conversion of the site into a commercial development to accommodate the construction of a community value 165-acre Mixed Use District. The proposed project enhances the site by removing a blighting influence, by revitalizing a vacant outdated industrial site, by creating approximately 500 new employment opportunities, by providing new commercial services to an area of the City that has been void of services comparable to other segments of the city. These activities support the approval of the proposed redevelopment plan. Your review and approval of the Sorensen Park Plaza Tax Increment Financing (TIF) Redevelopment Project Plan proposed for the former Vickers, Inc plant site area located at 6600 North 72nd Street is appreciated. Sincerely, Referred to City Council for Consideration: //l/t..., g. Robert C. Peters Dalte a o Office 'tie VV Dalte Y Planning Director t Approved as to Funding: Approved: Carol A. Ebdon Date rm Jac an, P.E. Date Finance Director Acting Public Works Director P:\PLN2\15324maf.doc Publication of Notice of Public Hearing: December 16, and December 23, 2004 Public Hearing: January 5, 2005 L SORENSEN PARK PLAZA (Vickers Plant Site) TIF REDEVELOPMENT PROJECT PLAN 6600 NORTH 72nd STREET SORENSEN PARKWAY & CROWN POINT AVENUE NOVEMBER, 2004 ptdlAHA, 04vy, fig$ „4.A„. 01 D F898U0'*4 PLANNING• OMAHA Mike Fahey, Mayor City of Omaha Robert C. Peters, Director Planning Department Omaha/Douglas Civic Center 1819 Farnam Street Omaha, Nebraska 68183 ---- -- - - --- _ J . 1. . 4,. 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The proposed project site, Sorensen Park Plaza, will be converted into a 600,000 sq. ft. shopping center. The site is generally bounded by Sorensen Parkway on the north, Crown Point Avenue to the south, 72nd Street on the east and the Stillmeadow 2nd Addition subdivision abutting the site on the west. The redevelopment project site includes all of the abutting and adjacent rights-of -way that will receive improvements as document by a traffic study and those mandated by the City of Omaha Public Works Department. Site History: Prior to January of 1960, the proposed Sorensen Park Plaza site was the location of the Clear Ridge Airport and undeveloped farming land that was zoned as S 1 and was later changed from Si to S2 and I-1 to facilitate the sale of the property to the Omaha Industrial Foundation for the benefit of the Vickers Corporation. The foundation was to acquire the land, as Vickers was unsuccessful in completing the acquisition and getting the zoning changed. The Planning Board approved the zoning change December 12,1960. The site history is unclear for the period from 1960 to 1969. The Vickers facilities were constructed in many phases. The original structure was built in 1969 and contained 431,640 square feet and a 17,760 square foot basement. Additions of 5,100 square feet in 1982, 7,000 square feet in 1985, 29,160 square feet in 1987, and 9,270 square feet in 1988 were built. The building contains about 60,942 square feet of finished areas including offices and a basement kitchen and lunchroom. The finished areas occupy about 12% of the total building area with the balance of the building being warehouse space. The building is a steel frame structure with interior columns and beams spaced throughout the warehouse. The exterior walls are insulated metal panels. The site and facility was used for industrial manufacturing from 1969 through 2001. Some of the manufactured products were hydraulic hoses, motors and pumps. Manufacturing processes included metal fabrications, milling, finishing, and associated metal cleaning and degreasing operations that generated environmental waste by- products that caused soil and water contamination. Originally the facility constructed and operated a liquid waste collection system consisting of underground piping and storage tanks that transported and stored waste products prior to their removal from the site. The former manufacturing operations and supporting uses caused considerable soil and water contamination that resulted in the site being designated by EPA for Environmental Remediation. 1 The cost of site preparation, general site development, changes in the surrounding zoning and land use patterns relating to the highest and best use of the site in relation to the surrounding area, as well as the obsolete zoning and platting justify the redevelopment of the site for commercial uses in this underserved market. The approval of the redevelopment plan will facilitate the rehabilitation of the proposed project site by creating the opportunity for TIF to be used as a financing mechanism to cover some of the cost of site development and public improvements related to the existing street, sanitary and storm sewer systems as may be required. All of the TIF, in excess of the cost of required public improvements, site acquisition and site development will be use for project specific TIF eligible improvements including site demolition. Without modifications to the public infrastructure systems and assistance in financing site-specific TIF eligible improvements, this area will not be developed and utilized to its highest and best use. The redevelopment site has been designated for remediation by the Environmental Protection Agency due to previous ground water and soil contamination at and around the former Vickers facility. In its present condition, the site would remain as an economic liability to this area and a detriment to commercial development. The negative conditions relating to site contamination eliminate expansion opportunities in the delivery of goods and services. This area of the city has not experienced the level of growth as demonstrated in other areas of the city and will not experience growth unless the City takes an aggressive approach to assist in the development of the site and area by utilizing all of the Economic Development tools available. Substandard & Blighted Development efforts at this location began years ago (1960) when the farmland and the airport were sold for the development of the site for Vickers, Inc. The currently vacant, empty site was re-zoned to I-1 and retains the Industrial Zoning designation. The site has been closed, unused and on the market for sale since 2001. Today, the site contains several abandoned industrial and commercial buildings, empty parking lots, and undeveloped land. Property tax values at this site have shown a decrease in value since the announced Vickers closing. Traffic infrastructure serving the site is inadequate for effective development with the cost of public improvements and site development necessary for full commercial use at this location estimated to be in excess of twelve million dollars. The Planning Board and the City Council respectively approved the designation of the site as Blighted and Substandard with a six to one vote (6 to1). Land Use/Zoning/Site Development: The currently vacant, empty site was re-zoned to I-1 and retains the Industrial Zoning designation. The site has been closed, unused and on the market for sale since 2001. 2 There are proposal being submitted concurrently with the submission of this plan (Sorensen Park Plaza Redevelopment Plan) to the Planning Board that request changes in zoning, platting, land use and site development regulations at the project site and in the general area. The proposed changes submitted to and recommended by the Planning Department are consistent with the redevelopment plan. The approved changes in zoning, platting, land use, and site development are incorporated into this plan as a part of the plan as though included in and or attached to the plan. The entire project site is to be rezoned to a community value 165-acre Mixed Use District (MU) as a part of the subdivision process. The approval of this request will require an amendment to the Master Plan. Sorensen Park Plaza will contain a mix of appropriate businesses that will provide goods and services that are not totally available in the target market area east of 72nd Street. The proposed site plan illustrates the proposed user types and placement of specific businesses. Utilities/Infrastructure: Current utility services are located in public right-of-ways and will be moved as may be required by the development of the site and as required by the City of Omaha. Sorensen Parkway and Crown Point Avenue intersecting with 72nd Street currently service the project site. A traffic study has been completed and enhancements will be required to improve traffic in concert with the development. The City of Omaha is requiring traffic modifications to improve traffic circulation in the area, to reduce potential safety concerns and not as a requirement of the proposed development. The changes are required to improve current traffic systems and to facilitate future growth. The development provides the mechanism to fund the public improvement cost through TIF. The costs of site development, environmental remediation and the public infrastructure improvements are estimated to be approximately$16,000,000. TIF Compliance: The request meets the necessary requirements for consideration. The project meets all of the mandatory criteria and seven of the eight discretionary criteria. (1) Approximately 500 or more new positions will be created at full build out of the site (2) The site meets the requirements to be declared Substandard and Blighted (3) The TIF proceeds are to be used to cover all public improvement cost and environmental remediation with the remaining balance of the TIF to be used for project specific eligible cost (5b) The commercial shopping center will create positions the will be made available to low- to moderate-income persons. The businesses slated for this project site are of a service and retail nature that employs persons in the $6.50 to $8.50 ranges. (6) The buildings and site are primarily vacant and have been declining in value. (7) The project will attract new commercial businesses to an area that is underserved and potential new business to the City of Omaha. (8) The redevelopment site has experienced a decline in property value 3 and taxes due to the environmental conditions at that have spread into the abutting residential area. These conditions and the closing of the Vickers facility have caused a reduced valuation of the site, reduction in employment in the area and created a negative economic impact. Financing: The total project cost is estimated to be $48,150,783. The project will support the TIF request of $8,490,000 plus capitalized interest based on an estimated valuation of $60,009,139. TIF related eligible expenses are estimated to be $12,288,265. The TIF amount is approximately 69% of the eligible TIF expenses excluding site acquisition. The TIF eligible expenses are 76% of the total site development cost while the requested TT amount of$8,490,000 is approximately 53% of the total site development cost. The total TIF requested represents approximately 18% of the total project hard cost. The TIF amount includes approximately $7,194,705.for sewer and street improvements and $1,265,000 to cover the cost of environmental remediation. The principal TIF amount provides one hundred percent (100%) coverage for street, sewer and environmental remediation cost. The remaining project cost is funded through developer equity, bank debt, and the potential sale and /or leasing of sites. This recap of TIF funding illustrates that the primary use of TIF is being allocated in a manner that the legislation intended. The primary use and allocation of TIF is for public benefit. Without TIF funding at the level requested the project is questionable as the strongest financial partner has advised that they withdraw without the allocation of TIF in the amount requested. The amount of TIF authorized for the project is not subject to change. Increased cost related to revising the site plan to incorporate the use of community value design and development requirements of the city of Omaha will not trigger an increase in TIF. Environmental remediation, site development, public improvement cost and a reduction of the tax levy could impact the financing of the project. The increased cost and changes in financing will not require additional approval of the Planning Board. There may be adjustments in the amount and source of funds that may impact the final TIF amount. The potential of increased cost and a change in the source of funds is recognized and authorized as deemed necessary and appropriate through negotiations with the developer. TIF Cost Benefit Analysis: The project provides for the development of an 80-acre shopping center in an area of the city that has not seen development and growth comparable with the rest of the city. This is a difficult project to bring to fruition because of the environmental conditions. It is an important project that will have a significant impact on North Omaha by providing the opportunity to bring needed goods and services to the area. There is evidence of potential opportunities for expansion and growth, however the marginal benefit to developers and cost of development has prevented this from being achieved in the past. It is necessary 4 for innovative financing approaches to be used to encourage development and to support the potential growth that will occur as a result of this and other improvements in the area. The use of Tax Increment Financing will not result in tax shifts. The current level of taxes will continue to flow to the current taxing entities and only the increased value of revenues resulting from the improvements will be applied to the cost of the improvement. 1) No community public service needs will be generated as a result of this project. The proposed TIF will be used to offset public infrastructure improvement cost, environmental remediation, traffic system improvements on Crown Point Avenue and Sorensen Parkway eliminating traffic concerns that may be a determent to development and to defray extensive site development cost which are eligible TIF activities. The development and expansion of this site will provide employment and services,which are needed in this sector of the community. 2) This development will have impact on other businesses in the area even though the area is currently lacking the majority of services to be provided. There will be increased demand for the employees to fill the low- to moderate-income level employment opportunities in this area. This is a positive factor as the surrounding area east of the site has a high unemployment rate. There will be an increase in competition for customers and this is the healthy basis of our economic system. This factor stimulates the delivery of quality goods and services. 3) The elimination of the environmental conditions triggering the substandard and blight designation in this area and the provision of new employment opportunities and services will bring needed economic opportunities to this sector of the community. The expansion will cause an increase in traffic in the area; however, it will cause a corresponding reduction in traffic in other areas by providing the delivery of localize goods and services which will reduce the outflow of people and of dollars from the area. The current street system is able to accommodate the development, however the City will require improvements on Crown Point Avenue and Sorensen Parkway to provide for an improved traffic system that will eliminate potential traffic problems and safety concerns. The development of the site, the elimination of traffic safety conditions, the creation of new businesses, the creation of new employment opportunities and the delivery of goods and services in an area that has never been adequately served justifies the cost associated with the project. The long-term benefits resulting from the elimination of the substandard and blight conditions and the increase in the tax base resulting from the development are other valid justifications to provide assistance to the project. The approval of the Sorensen Park Plaza TIF Redevelopment Plan will facilitate the development of the site and create the opportunity for the developer to apply for Tax Increment Financing (TIF) to be used as a financing mechanism for public improvements, environmental remediation and site preparation cost associated with redevelopment. 5 The project site meets the requirements of the Master Plan, and other City Ordinances as well as Nebraska Community Development Law that establishes the process and requirements for the approval of a redevelopment plan. P:\PLN2\15325maf.doc 6 • TAX INCREMENT FINANCING: A TOOL FOR BROWNFIELD REDEVELOPMENT Probably the most widely and successfully used (d) a mortgage on part, or all of the financial tool for brownfield redevelopment in redevelopment project; or (e) any other taxes or the United States is Tax Increment Financing anticipated receipts that the municipality may (TIF). Forty-three states offer TIFs, a system lawfully pledge. used by local governments to fund redevelopment efforts with increases in property The tax revenues resulting from TIF's are not taxes occasioned by redevelopment. The use of generated by increasing tax rates. TIF generates TIFs is facilitated by state laws. These laws revenues by permitting municipalities to permit the establishment of special areas to temporarily capture the new tax revenues collect TIF revenues and issue debt. Often the generated by the increased property values implementation of TIF is facilitated through the resulting from a redevelopment program, creation of municipal redevelopment agencies. improvements and activities, various redevelopment projects and the reassessment of TIFs traditionally have been employed for properties numerous types of economic revitalization efforts, and are playing a more prominent role in The utilisation of TIF does not mean that all tax brownfield and infill development. The TIF revenues from a redevelopment area are process uses the anticipated growth in property funnelled back to that area or to the TIF debt taxes, generated by a development in a specific obligations. The property taxes levied on the area, to finance public-sector investment in the pre-redevelopment valuation of the properties zone. TIF programs are built on the concept that within the redevelopment area continue to be new value will be created—an essential premise applied to the general revenue stream for the of most Smart Growth initiatives — and that the municipality. In addition, if excess Incremental future value can be used to finance part of the Property Taxes result(when annual Incremental activities needed now to create that new value, Property Taxes received exceed principal and and that ultimately the new value will accrue to interest obligations for a given year) and the jurisdiction's tax base. redevelopment project costs necessary to implement the redevelopment plan have been To finance redevelopment project costs, a paid, the municipality can add these excess municipality may issue obligations secured by Incremental Property Taxes to its general incremental property taxes to be generated from revenue. the designated redevelopment area. A municipality may also commit towards payment The ultimate benefit that a municipality derives of such obligations any part or any combination from TIFs is the successful redevelopment of an of the following: (a) net revenues of all or part area and an increased property tax base after of the redevelopment project; (b) taxes levied redevelopment project costs and obligations are and collected on any or all property in the paid. municipality; (c) the credit of the municipality; B.S. Onyschuk, O.C., is a partner with the law firm Gowlings. He can be reached at (416) 369-4574. E-mail address: bob.onyschuk@gowlings.com. Michael G. Kovacevic, an associate of the firm, can be reached at (416) 369-4622. E-mail address: michael.kovacevic@gowlings.com. I COWLINGS Incorporating the practied'of SMITH LYONS Suite 4900,Commerce Court West,Toronto,ON M5L 1.13 Suite 5800,Scotia Plant 40 King Street West,Toronto,ON M5H 3Z7 ( :1-' t• '':;t:,..A .:-'. -, -.1• . 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SORENSEN PARK PLAZA SCHEDULE 1 - OFF-SITE IMPROVEMENTS DESCRIPTION QUANTITY UNIT COST COST PAVEMENT(72nd Street Reconstruction): Traffic Control 1 L.S. $8,000.00 $8,000 Clearing and Grubbing 1 L.S. $3,000.00 $3,000 Earthwork Excavation 4,248 C.Y. $3.00 $12,744 Earthwork Embankment 4,221 C.Y. $5.00 $21,105 Remove Pavement 10,033 S.Y. $3.50 $35,116 Remove Driveway 836 S.Y. $3.50 $2,926 Remove Walk 1,809 S.Y. $3.50 $6,332 Remove Median Surfacing 3,821 S.F. $3.50 $13,374 Remove Combination Curb&Gutter 4,346 L.F. $5.00 $21,730 Remove Existing Pavement Markings 1,500 L.F. $0.35 $525 Remove Inlet 15 EA $400.00 $6,000 Remove Storm Sewer Pipe 900 L.F. $7.00 $6,300 Saw Cut-Full Depth 5,200 L.F. $4.00 $20,800 9"Concrete Pavement 15,993 S.Y. $25.00 $399,825 4"Concrete Imprinted Surfacing 583 S.Y. $36.00 $20,988 4"Concrete Sidewalk 1,383 S.Y. $22.00 $30,426 Construct Concrete Curb Ramp 3,400 S.F. $8.00 $27,200 Subgrade Prep 15,993 S.Y. $2.00 $31,986 Adjust Manhole to Grade 9 EA $120.00 $1,080 Adjust Valve Box to Grade 2 EA $100.00 $200 Build Concrete Curb &Gutter 628 L.F. $13.00 $8,164 Seeding, Type B 1 AC $600.00 $600 Silt Fence Low Porosity 2,500 L.F. $3.00 $7,500 15" RCP Storm Sewer 300 L.F. $25.00 $7,500 18" RCP Storm Sewer 800 L.F. $30.00 $24,000 Build Manhole 8 EA $2,500.00 $20,000 Build Curb Inlet 15 EA $1,600.00 $24,000 F/I Plastic Left and Right Turn Arrows Grooved in 24 EA $230.00 $5,520 Concrete Pavement F/I Plastic"ONLY"Grooved in Concrete Pavement 12 EA $300.00 $3,600 F/I 4"Dashed White Preformed Plastic Marking Tape 2,722 L.F. $5.00 $13,610 Grooved in Concrete Pavement F/I 4"Solid White Preformed Plastic Marking Tape 4,968 L.F. $2.75 $13,662 Grooved in Concrete Pavement 4"Solid Yellow Preformed Plastic Marking Tape 2,200 L.F. $4.00 $8,800 Grooved in Concrete Pavement Traffic Signal 72nd Street and Crown Point 1 EA $110,000.00 $110,000 Traffic Signal 72nd Street and Sorensen 1 EA $175,000.00 $175,000 Traffic Signal 72nd and South Drive 1 EA $110,000.00 $110,000 Taffic Signal 72nd and North Drive 1 EA $110,000.00 $110,000 Taffic Signal On Sorensen 1 EA $110,000.00 $110,000 Temp. Signals 2 EA $75,000.00 $150,000 CONTINGENCY (10%) $157,189 SUBTOTAL $1,728,800 SORENSEN PARK PLAZA SCHEDULE 1 - OFF-SITE IMPROVEMENTS DESCRIPTION QUANTITY UNIT COST COST PAVEMENT(Sorensen Parkway): Traffic Control 1 L.S. $7,000.00 $7,000 Clearing and Grubbing 1 L.S. $3,000.00 $3,000 Earthwork Excavation 950 C.Y. $3.00 $2,850 Earthwork Embankment 1,500 C.Y. $5.00 $7,500 Remove Pavement 4,723 S.Y. $3.50 $16,531 Remove Walk 8,746 S.Y. $3.50 $30,611 Remove Median Surfacing 6,117 S.F. $3.50 $21,410 Remove Existing Pavement Markings 1,200 L.F. $0.35 $420 Remove Inlet 6 EA $400.00 $2,400 Remove Storm Sewer Pipe 120 L.F. $7.00 $840 Saw Cut-Full Depth 1,562 L.F. $4.00 $6,248 9"Concrete Pavement 7,802 S.Y. $25.00 $195,050 4"Concrete Imprinted Surfacing 5,342 S.Y. $36.00 $192,312 4"Concrete Sidewalk 8,757 S.Y. $22.00 $192,654 Construct Concrete Curb Ramp 78 S.F. $8.00 $624 Subgrade Prep 7,802 S.Y. $2.00 $15,604 Adjust Manhole to Grade 4 EA $120.00 $480 Adjust Valve Box to Grade 2 EA $100.00 $200 Build Concrete Curb 220 L.F. $13.00 $2,860 Seeding,Type B 1 AC $600.00 $600 Silt Fence Low Porosity 1,100 L.F. $3.00 $3,300 15" RCP Storm Sewer 35 L.F. $25.00 $875 18" RCP Storm Sewer 15 L.F. $30.00 $450 Build Manhole 6 EA $2,500.00 $15,000 Build Curb Inlet 6 EA $1,600.00 $9,600 F/I Plastic Left and Right Turn Arrows Grooved in 8 EA $230.00 $1,840 Concrete Pavement F/I Plastic"ONLY"Grooved in Concrete Pavement 8 EA $300.00 $2,400 F/I 4"Dashed White Preformed Plastic Marking Tape 3,800 L.F. $5.00 $19,000 Grooved in Concrete Pavement F/I 4"Solid White Preformed Plastic Marking Tape 1,700 L.F. $2.75 $4,675 Grooved in Concrete Pavement 4"Solid Yellow Preformed Plastic Marking Tape 900 L.F. ' $4.00 $3,600 Grooved in Concrete Pavement CONTINGENCY (10%) $75,967 SUBTOTAL $835,900 SORENSEN PARK PLAZA ' SCHEDULE 1 - OFF-SITE IMPROVEMENTS DESCRIPTION QUANTITY UNIT COST COST PAVEMENT(Crown Point Road): Traffic Control 1 L.S. $6,000.00 $6,000 Clearing and Grubbing 1 L.S. $2,000.00 $2,000 Earthwork Excavation 4,457 C.Y. $3.00 $13,371 Earthwork Embankment 2,494 C.Y. $5.00 $12,470 Remove Pavement 3,850 S.Y. $3.50 $13,475 Remove Driveway 700 S.Y. $3.50 $2,450 Remove Walk 1,009 S.Y. $3.50 $3,532 Remove Median Surfacing 1,636 S.F. $3.50 $5,726 Remove Existing Pavement Markings 1,000 L.F. $0.35 $350 Remove Inlet 6 EA $400.00 $2,400 Remove Storm Sewer Pipe 590 L.F. $7.00 $4,130 Saw Cut-Full Depth 3,261 L.F. $4.00 $13,044 9"Concrete Pavement 7,249 S.Y. $28.00 $202,972 4"Concrete Imprinted Surfacing 229 S.Y. $36.00 $8,244 4"Concrete Sidewalk 1,092 S.Y. $22.00 $24,024 Construct Concrete Curb Ramp 1,702 S.F. $8.00 $13,616 Subgrade Prep 8,956 S.Y. $2.00 $17,912 Adjust Manhole to Grade 11 EA $120.00 $1,320 Adjust Valve Box to Grade 1 EA $100.00 $100 Build Concrete Curb 1,133 L.F. $13.00 $14,729 Seeding,Type B 1 AC $600.00 $360 Silt Fence Low Porosity 1,000 L.F. $3.00 $3,000 15"RCP Storm Sewer 300 L.F. $25.00 $7,500 18"RCP Storm Sewer 600 L.F. $30.00 $18,000 Build Manhole 4 EA $2,500.00 $10,000 Build Curb Inlet 10 EA $1,600.00 $16,000 F/I Plastic Left and Right Turn Arrows Grooved in 8 EA $230.00 $1,840 Concrete Pavement F/I Plastic"ONLY"Grooved in Concrete Pavement 4 EA $300.00 $1,200 F/I 4" Dashed White Preformed Plastic Marking Tape 2,370 L.F. $5.00 $11,850 Grooved in Concrete Pavement F/I 4"Solid White Preformed Plastic Marking Tape 1,050 L.F. $2.75 $2,888 Grooved in Concrete Pavement 4" Solid Yellow w/Broken Yellow Preformed Plastic 1,321 L.F. $4.00 $5,284 Marking Tape Grooved in Concrete Pavement CONTINGENCY (10%) $44,014 SUBTOTAL $483,800 SANITARY SEWER(OUTFALL) 10" SANITARY SEWER 6,000 LF $28.00 $168,000 (Sanitary Manholes Included) CONTINGENCY(10%) $16,800 SUBTOTAL $184,800 SUBTOTAL OFF-SITE IMPROVEMENTS $3,233,300 GENERAL CONDITIONS OVERHEAD & PROFIT $258,700 TOTAL OFF-SITE IMPROVEMENTS $3,492,000 • SORENSEN PARK PLAZA SCHEDULE 2 - ON-SITE IMPROVEMENTS DESCRIPTION UNIT COST QUANTITY COST GRADING OPERATIONS EXCAVATION $1.00 800,000 CY $ 800,000 SILT FENCE $3.00 5,000 LF $ 15,000 CLEARING & GRUBBING $25,000.00 1 LS $ 25,000 SILT BASINS $8,000.00 1 EA $ 8,000 MISC. EROSION CONTROL $25,000.00 1 LS $ 25,000 SEEDING $1,300.00 60 AC $ 78,000 CONTINGENCY (10%) $ 95,100 SUBTOTAL $ 1,046,100 . SEGMENTAL BLOCK RETAINING WALL RETAINING WALL ALONG WEST PROPERTY LINE $20.00 30,000 SF $ 600,000 CONTINGENCY (10%) $ 60,000 SUBTOTAL $ 660,000 DEMOLITION EXISTING BUILDING DEMOLITION $1,200,000.00 1 LS $ 1,200,000 CONTINGENCY (10%) $ 120,000 SUBTOTAL $ 1,320,000 ENVIRONMENTAL REMEDIATION ENVIRONMENTAL REMEDIATION $2,065,000.00 1 LS $ 2,065,000 CONTINGENCY (10%) $ 206,500 SUBTOTAL $ 2,271,500 SHOPPING CENTER SITE IMPROVEMENTS (SCHEDULE 2A) LOT 1 $1,148,800.00 1 LS $ 1,148,800 LOT 2 $2,953,200.00 1 LS $ 2,953,200 LOT 3 $1,373,100.00 1 LS $ 1,373,100 OUTLOTA $1,089,800.00 1 LS $ 1,089,800 SUBTOTAL $ 6,564,900 SUBTOTAL ON-SITE IMPROVEMENTS $ 11,862,500 GENERAL CONDITIONS OVERHEAD AND PROFIT $ 949,000 TOTAL ON-SITE IMPROVEMENTS $ 12,812,000 SORENSEN PARK PLAZA ESTIMATED LOT SPECIFIC SITE COSTS SCHEDULE 2A Lot Number Item Quantity Unit Unit Price Total Cost Lot 1 Heavy Duty Asphalt Pavement 14,980 SY @ $13.50 = $202,230 Light Duty Asphalt Pavement 22,660 SY @ $11.50 = $260,590 Concrete Curb and Gutter 6,800 LF @ $8.50 = $57,800 Interior Sidewalk 1,000 SF @ $2.75 = $2,750 Interior Sanitary Sewer(8") 575 LF @ $18.00 = $10,350 Interior Sanitary Sewer Structures 2 EA @ $2,500.00 = $5,000 Storm Sewer 15"RCP 170 LF @ $27.00 = $4,590 18"RCP 400 LF @ $32.00 = $12,800 24"RCP 50 LF @ $44.00 = $2,200 30"RCP 155 LF @ $64.00 = $9,920 36"RCP 430 LF @ $84.00 = $36,120 42"RCP LF @ $107.00 = $0 48"RCP LF @ $127.00 = $0 54"RCP LF @ $175.00 = $0 60"RCP LF @ $188.00 = $0 72"RCP LF @ $250.00 = $0 Storm Sewer Structures 10 EA @ $2,000.00 = $20,000 Water Mains and Appurtenances 1,000 LF @ $45.00 = $45,000 Lighting 1 LS @ $110,000.00 = $110,000 Power 1 LS @ $50,000.00 = $50,000 Landscaping 1 LS @ $115,000.00 = $115,000 Monument Sign 1 LS @ $100,000.00 = $100,000 Contingency(10%) $104,435 Total Probable Lot 1 Specific Construction Costs = $1,148,800 Lot 2 Heavy Duty Asphalt Pavement 27,900 SY @ $13.50 = $376,650 Light Duty Asphalt Pavement 45,800 SY @ $11.50 = $526,700 Concrete Curb and Gutter 16,300 LF @ $8.50 = $138,550 Decorative Colored Concrete Pavement 38,500 SF @ $3.75 $144,375 Interior Sidewalk 1,000 SF @ $2.75 = $2,750 Interior Sanitary Sewer(8") 2,450 LF @ $18.00 = $44,100 Interior Sanitary Sewer Structures 6 EA @ $2,500.00 = $15,000 Storm Sewer 15"RCP 490 LF @ $27.00 = $13,230 18"RCP 570 LF @ $32.00 = $18,240 24"RCP 100 LF @ $44.00 = $4,400 30"RCP 365 LF @ $64.00 = $23,360 36"RCP 115 LF @ $84.00 = $9,660 42"RCP 660 LF @ $107.00 = $70,620 48"RCP 795 LF @ $127.00 = $100,965 54"RCP 610 LF @ $175.00 = $106,750 60"RCP 385 LF @ $188.00 = $72,380 72"RCP LF @ $250.00 = $0 Storm Sewer Structures 30 EA @ $1,500.00 = $45,000 Water Mains and Appurtenances 5,060 LF @ $45.00 = $227,700 Lighting 1 LS @ $245,000.00 = $245,000 Power 1 LS @ $100,300.00 = $100,300 Landscaping 1 LS @ $270,000.00 = $270,000 Monument Sign 1 LS @ $100,000.00 = $100,000 2 Fountains 1 LS @ $24,000.00 = $24,000 Event Gates 1 LS @ $5,000.00 $5,000 Contingency(10%) $268,473 Total Probable Lot 2 Specific Construction Costs = $2,953,200 Lot 3 Heavy Duty Asphalt Pavement 9,365 SY @ $13.50 = $126,428 Light Duty Asphalt Pavement 21,500 SY @ $11.50 = $247,250 Concrete Curb and Gutter 5,650 LF @ $8.50 = $48,025 Interior Sidewalk 1,900 SF @ $2.75 = $5,225 Interior Sanitary Sewer(8") 1,500 LF @ $18.00 = $27,000 Interior Sanitary Sewer Structures 7 EA @ $2,500.00 = $17,500 Storm Sewer 15"RCP 135 LF @ $27.00 = $3,645 18"RCP 165 LF @ $32.00 = $5,280 24"RCP 315 LF @ $44.00 = $13,860 30"RCP LF @ $64.00 = $0 36"RCP LF @ $84.00 = $0 42"RCP LF @ $107.00 = $0 48"RCP LF @ $127.00 = $0 54"RCP 425 LF @ $175.00 = $74,375 60"RCP 540 LF @ $188.00 = $101,520 72"RCP 390 LF @ $250.00 = $97,500 Storm Sewer Structures 19 EA @ $1,500.00 = $28,500 Water Mains and Appurtenances 2,100 LF @ $45.00 = $94,500 Lighting 1 LS @ $101,500.00 = $101,500 Power 1 LS @ $43,700.00 = $43,700 Landscaping 1 LS @ $112,500.00 = $112,500 Monument Sign 1 LS @ $100,000.00 = $100,000 Contingency(10%) $124,831 Total Probable Lot 3 Specific ConstructionCosts = $1,373,100 e. L • Outlot A Heavy Duty Asphalt Pavement 27,800 SY @ $13.50 = $375,300 Light Duty Asphalt Pavement SY @ $11.50 = $0 Concrete Curb and Gutter 13,900 LF @ $8.50 = $118,150 Interior Sidewalk 30,000 SF @ $2.75 = $82,500 Interior Sanitary Sewer(8") 1,620 LF @ $18.00 = $29,160 Interior Sanitary Sewer Structures 13 EA @ $2,500.00 = $32,500 Storm Sewer 15"RCP 1,210 LF @ $27.00 = $32,670 18"RCP 2,480 LF @ $32.00 = $79,360 24"RCP 850 LF @ $44.00 = $37,400 30"RCP LF @ $64.00 = $0 36"RCP 150 LF @ $84.00 = $12,600 42"RCP 10 LF @ $107.00 = $1,070 48"RCP LF @ $127.00 = $0 54"RCP LF @ $175.00 = $0 60"RCP 170 LF @ $188.00 = $31,960 72"RCP 70 LF @ $250.00 = $17,500 Storm Sewer Structures 58 EA @ $1,500.00 = $87,000 Water Mains and Appurtenances 1,190 LF @ $45.00 = $53,550 Contingency(10%) $99,072 Total Probable Outlot A Specific Construction Costs = $1,089,800 Total Probable Lots 1 thru 3 & Outlot A Lot Specific Construction Costs = $6,564,900 1 • SORENSEN PARK PLAZA SITE DESIGN CONSULTANT FEES SCHEDULE3 BOUNDARY SURVEY/ALTA $ 8,500 TOPOGRAPHIC/ UTILITY SURVEY $ 26,000 GRADING PLAN $ 25,000 PLAT/ PARCEL MAPPING $ 40,000 GEOTECHNICAL INVESTIGATION $ 20,000 TRAFFIC CONSULTANT $ 16,500 LANDSCAPE PLAN $ 25,000 OFFISTE ROADWAY DESIGN $ 225,000 INTERIOR IMPROVEMENT DESIGN $ 150,000 CONSTRUCTION STAKING $ 250,000 CONSTRUCTION OBSERVATION AND ADMIN (ENGINEER) $ 200,000 REIMBURSABLES $ 2,000 PLAN CHECK FEES $ 3,000 CONTINGENCY (5%) $ 49,550 TOTAL I $1,040,550 1 . • I 11110.111.111 OHL1.111.103 i r.•...n. 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I ' ip •�,:,,in” fIjit a --- ,l . i lc. . is 1 • ill 1 I• p: IllllllIt I I° I i i.. , _:a.. o d I — • III' . 1 ;i- = / Ii! 6 , i.. I . i I i , Ibal::.., . j ii I =--0' 1 — c_ -,..-r I a 0 HA, NF CityofOmaha, Webras&a ��_�1�lI'C/A 4\rottia 1819 Farnam Suite LC 1 e Omaha, Nebraska 68183-0112 e)'4_ �> ,. =-� Buster Brown (402) 444-5550 City Clerk FAX (402) 444-5263 o 'TED FEBR't'�� "NOTICE TO TAXING AUTHORITY" NOTICE OF PUBLIC HEARING ON THE SORENSEN PARK PLAZA TIF REDEVELOPMENT PROJECT PLAN Notice is hereby given that the Omaha City Council has set Tuesday, January 4, 2005 at 2:00 p.m. as the date of Public Hearing on the Sorensen Park Plaza TIF Redevelopment Project Plan. The Sorensen Park Plaza TIF Redevelopment Project Plan is approximately 80 acres located at 6600 North 72nd Street, generally bounded by Sorensen Parkway on the north, Crown Point Avenues on the south, 72nd Street on the east and the Stillmeadow 2nd Addition subdivision on the west. The Redevelopment Plan is located within an area declared blighted and substandard and in need of redevelopment by the City Council on October 26, 2004. The Sorensen Park Plaza TIF Redevelopment Project Plan proposes the commercial redevelopment of the site at 6600 North 72nd Street into an 80 acre commercial shopping complex. The site includes all abutting and adjacent rights-of-way that will receive improvements as may be documented in the traffic study, mandated by the city of Omaha Public Works Department and indicated in the redevelopment plan. The plan proposes $8,490,000 in Tax Increment Financing. The total project cost is estimated to be $60,009,139. A copy of said plan is available for public inspection in the City Clerk's Office. Public Hearing will be held before the City Council of the City of Omaha, in the Legislative Chambers, Omaha/Douglas Civic Center, 1819 Farnam Street, Omaha, Nebraska. Buster Brown City Clerk ALL REQUESTS FOR SIGN LANGUAGE INTERPRETERS (SIGNERS) WILL REQUIRE A MINIMUM OF 48 HOURS ADVANCE NOTICE. IF ALTERNATIVE FORMATS ARE NEEDED ALL REQUESTS WILL REQUIRE A MINIMUM OF 72 HOURS ADVANCE NOTICE. PLEASE NOTIFY TAMMY BIODROWSKI -444-5553, IF ARRANGEMENTS NEED TO BE MADE f. . f Chairperson Board of Commissioners Douglas County LC2 Civic Center 1819 Farnam Street Omaha, NE 68183-0001 Chairperson Omaha Public Schools 3215 Cuming Street Omaha, NE 68131 Chairperson Board of Governors Metropolitan Community College 3000 Fort Street Omaha, NE 68111 Chairperson Board of Directors Papio Natural Resources District 8901 South 154th Street Omaha, NE 68138 President Educational Services Unit 1 3215 Cuming Street Omaha, NE 68131 Chairperson Metropolitan Utilities District 1723 Harney Street Omaha, NE 68102 Chairperson Metro Area Transit Authority 2222 Cuming Street Omaha, NE 68102 Chairperson Omaha/Douglas Public Building Commission C-25A CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: WHEREAS, the primary objectives of the City of Omaha's Master Plan and Community Development Program are to encourage additional private investment and infill development within inner-city neighborhoods; and to eliminate conditions which are detrimental to public health, safety and welfare, by developing vacant, underutilized property within these neighborhoods; and, WHEREAS, the approximately 80 acre Sorensen Park Plaza Tax Increment Financing (TIF) Redevelopment Project Plan Area located at 6600 North 72nd Street, Omaha Nebraska is generally bounded by Sorensen Parkway on the north, Crown Point Avenue to the south, 72nd Street on the east with the Stillmeadow 2nd Addition subdivision abutting the site on the west. The redevelopment project site includes all of the abutting and adjacent rights-of-way. (See Vickers, Inc plant site/Attachment 1 for complete legal description); and, WHEREAS, this Redevelopment Plan is located within an area previously declared "blighted and substandard and in need of redevelopment" by City Council Resolution No. 1298 adopted on October 26, 2004 by a 6 to 1 vote; and, WHEREAS, the Vickers, Inc plant site located at 6600 North 72nd Street is vacant, deteriorated and remains blighted and substandard and in need of renovation; and, WHEREAS, the KDI Omaha, L. P Redevelopment Project Plan for the Sorensen Park Plaza Tax Increment Financing (TIF) Redevelopment Project Area provides for the demolition of existing buildings, public improvements, site preparation, renovation and conversion of the site into a community value 165-acre Mixed Use District (MU) as a part of the subdivision process; and, WHEREAS, the Sorensen Park Plaza Substandard and Blighted designation, the TIP Redevelopment Project Plan and the preliminary and final plats which authorized the changes in Zoning and the Mixed Use designation that were respectively approved by the Planning Board on September 1, 2004 and December 1, 2004 provided for the use of $8,490,000.00 Tax Increment Financing to offset eligible cost of site demolition, site preparation, renovation, public improvements and overall project development. By Councilmember Adopted City Clerk Approved Mayor C-25A CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebraska PAGE 2 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: THAT, the attached KDI Omaha, L. P. TIF Redevelopment Project Plan for the Sorensen Park Plaza Tax Increment Financing (TIF) Redevelopment Project as prepared by the Omaha City Planning Department, containing a provision for the division of ad valorem taxes under Section 18-2147 through 18-2150, Revised Statutes of Nebraska, be and hereby is approved as the Redevelopment Plan for the KDI Omaha, L. P. TIF Redevelopment Project for Sorensen Park Plaza Tax Increment Financing (TIF) Redevelopment Project Area located at 6600 North 72nd Street. APPROVED AS TO FORM: \ 2/e Sze y A-557 CITY ATTORNEY DA'1 P:\PLN2\15336maf.doc By Pam • ifouncilmember Adopted JQ 2005; oo' iayi 7:4�� City Clerk Approved.... . /1/A-� Mayor ,11 P CD CD CD ���� N O !y CD O' .� O 0 p cD p' ,tt \\k..rey, 0CAD p� __I '1 1 •�r •r\ Ct ' LA "»�� Po • o .,.t m C7 o� - � CD b .-p , , O , N � ZO CD , VlS \L. p O O.t• — gl Nt\* 6\ Ca ,', ..' \ 5.- .0 ,- 0- - ;ID < o O A _• CD O n O c4 c c .eci Iw 6- \ i 0\)P.\• 0 r� = CI) `C CD ,-t ?� n , N r� ro r '") CI li' `LI c A ,,,cJ 0 x O M � � v� '� CDU4 � � � r-R.. •k\ \ :‘('(Z1\q -'',. I{ VS\ y ,k, ..\ cc a t \o .c o N (44 k. o� ,o 0 - - K f _.. NOTICE PUBLIC' THE DAILY RECORD NOTICE OF PUBLIC HEARING ON THE SORENSEN PARK PLAZA TIF REDEVELOPMENT PROJECT PLAN OF OMAHA Notice is hereby given that the Omaha City Council has set Tuesday, January 4, RONALD A. HENNINGSEN Publisher 2005 at 2:00 p.m) as the date of Public r Hearingon the Sorensen Park Plaza T,F PROOF OF PUBLICATION ' Redevelopment Projectect Plan. The Sorensen Park Plaza TIF Redevelop- ment Project Plan is approximately 80 acres located at 6600 North 72nd Street, generally UNITED STATES OF AMERICA, bounded by Sorensen Parkway on the The State of Nebraska, north, Crown Point Avenues on the south, SS. 72nd Street on the east and the Stillmeadow District of Nebraska, 2nd Addition subdivision on the west. The Countyof Douglas, Redevelopment Plan is located within an g area declared blighted and substandard and City of Omaha, in need of redevelopment by the City Coun- cil on October 26,2004. The Sorensen Park Plaza TIF Redevelop-. LYNDA K.HENNINGSEN meet Project Plan proposes the commercial redevelopment of the site at 6600 North being duly sworn,deposes and says that she is 72nd Street into an 80 acre commercial shopping complex. The site includes all ASSOCIATE PUBLISHER abutting and adjacent rights-of-way that will receive improvements as may be docu- mented in the traffic study,mandated by the of THE DAILY RECORD, of Omaha, a legal newspaper, printed and city of Omaha Public Works Department and published daily in the English language, having a bona fide paid indicated in the redevelopment plan. The plan proposes $8,490,000 in Tax circulation in Douglas County in excess of 300 copies, printed in Increment Financing. The total project cost' Omaha,in said County of Douglas,for more than fifty-two weeks last is estirhated to be$60,009,139. A copy of said plan is available for public inspection in past; that the printed notice hereto attached was published in THE the City Clerk's Office. Public Hearing will be held before the City DAILY RECORD,of Omaha,on Council of the City of Omaha, in the Legisla- tive Chambers,Omaha/Douglas Civic Center, December 16 and 23, 2004 1819 Famam Street,Omaha, Nebraska. BUSTER BROWN, City Clerk ALL REQUESTS FOR SIGN LANGUAGE INTERPRETERS(SIGNERS) WILL REQUIRE A MINIMUM OF 48 HOURS ADVANCE NOTICE. IF ALTERNATIVE FORMATS ARE NEEDED That..Sai er during that time was regularly published and ALL REQUESTS WILL REQUIRE A MINIMUM Yt ik.1 ip�`ler �irc in the County- f Douglas d State of Nebraska. OF 72 HOURS ADVANCE NOTICE. e t,<< �.'m`C j J^`t ��Lf N PLEASE NOTIFY TAMMY BIODROWSKI - �`•e C.)'' `"! �/ / 444-5553, IF ARRANGEMENTS NEED TO BE 7 MADE. to / 1. ubsc ' ed in my presence and swo t�before h12-16&23-04 • * blishfrls Fee- $ `:,3 I me this 23rd day of '; December 04 \ dditioual Copies3W 20 °' S tl'J�'T�Q g% •7 7 Notary Pohl' County, e of Ne asks j . . REQUIRE PROOF OF PUBLICATION n - - - IL WIL 72NOURS ADVANCEM - NOTICE TO PUBLIC" NOTICE. • NOTICE OF PUBLIC HEARING f PLEASE NOTIFY TAMMY • i ON THE SORENSEN PARK 1 BIODROWSKI-444.553.- . • PLAZA TIF erebREDEVELOPMENT �`-- AFFIDAVIT PROJECT PLAN Notice is hereby given that GQ'1 the Omaha City Council has set Tuesday,January 4,2005 The Teacher education Pro- at 2:00 p.m.as the date of gram at Doane College is State of Nebraska, County of Douglas, ss:. Public Hearing on the Sorensen Park Plaza TIF Re- scheduled fdr an accredita- tion review by the National development Project Plan. Council for Accreditation of • '�, �. Teacher Education(NCATE), The Sorensen Park Plaza TIF t1 Aprll 2-6,2005.Federal regu- Redeveloppment Project Plan I lations req Ire that accred-is / �Y oxi 600ly 80 ahre lo- King com nept o allow quapff b Tr1Wri V 1111ll1 ,being duly sworn,deposes and says catedapproximately p at 6600 North 72nd lic commenpt s the gorlifi- Street, generally bounded cations ofrnstitutions or 1 - byth Sorensen Parkway on programs ndercoitatioa- that he is an employee of The Omaha World-Herald, a legal dailynewspaper the north,Crown Point Ave- tion for flarst accreditation nues on the south, 72nd orcontiningaccreditation. g Street on the east and the Stillmeadow 2nd Addition Both NCATE and Doane Col- I printed and published in the county of Douglas and State of Nebraska, and of subdivision on the west The Redevelopment Plan Is lege recognize graduates,parents,Schools,and com- located within an area de- munity ganizations have general circulation in the Counties of Douglas and Sarpy and State of Nebraska, Glared blighted and sub- valuable perspectives on standard and in need of re- the quail of the programs development by the City that pre0oare teachers and an tha the attached printed notice was published in the said newspaper on the Council on October 26,2004. other school personnel.We � � The Sorensen Park Plaza TIF invite Interested parties to d"./ ' • Redevelopment t ProPlaz Plan submit written testimony day of December • A.D.,20.04., eo the commercial Teach- proposesontheDoaneCollege redevelopment of the site er Education Program to: and that said newspaper is a legal newspaper under the statues of the State of at 6600 North 72nd Street in- Board of Examiners sop 80 acre commercial te 2010NCATEM , Nebraska. The above facts are within my personal knowledge. The Omaha shopping complex.The site 2010 Massachusetts Avenue' includes all abutting and ad- NW,Suite 500 jacent rights-of-way that Washington,DC 20036.1023 World-Herald has an average circulation of. 222,271 daily268.336 will receive improvements as may be documented In or byY e-mail to: the traffic study,mandated callforc°mments@ncate.org by the city of Omaha Public I Sunday, 20.04. Works Department and indi• Comments must address cated in the redevelopment substantive matters related plan. to the quality of professio- nal education programs of- The58,490,000 in Increment fered at Doane College,and Financing. The Tax cement should specify the respon- ertismg cost is The totala tor be dent's relationship, if any, • to the institution(i.e.,gradu- (Sil 560,009,139. A copy of said ate,present or former facul- plan is available for public ty member, employer of inspection in the City graduates). Copies of all Clerk's Office. correspondence received Public Hearing will be held will be sent to Doane Col- lege for comment prior to before the City Council of the City of Omaha, In the the review.No anonymous Subscribed in my presence and sworn to before me this Legislative Chambers, cestimore will be considered.Omaha/Douglas Civic Cen- ) dayof December. . . .20. . . .04 � ter, 1819 Farnam Street, etters of comment should Omaha,Nebraska. ybe received no later than (three months prior to the Buster Brown scheduled review. • • City Clerk • ALL REQUESTS FOR SIGN LANGUAGE INTERPRETERS ' (SIGNERS)WILL REQUIRE A MINIMUM OURS y - ADVANCE NOTICE. UUI Q IF ALTERNATIVE FORMATS ARE NEEDED ALL REQUESTS Notary Public (Continued On Next Column) - kir ,�" DEBRA L.MARCO • MYCOMMISSIONEXPIRES Printer's Fee$ • t�`�• *tenter 13,2007 Affidavit Paid by 313-G8-007 • i - - - - - I I t 1 1 Stillmeadow Neighborhood Association RECEIVED Omaha, Nebraska 04 NOV _4 PM 2: 41 www.angelfire.com/ne2/stillmeadow smnaomaha@cox.net CITY CLERK i,.0MAHA, NEBRASKA November 2, 2004 Councilman Marc Kraft Douglas Civic Center 1819 Farnam Street Omaha, NE 68183 Dear Councilman Kraft, The attached signed petitions were obtained on Sunday afternoon, October 24, 2004 and were to be submitted to the City Council at the meeting held on October 26, 2004. Please accept the petitions on behalf of the few neighbors that we were able to contact in that short period of time that have concerns regarding the Kimco Corporation development and the contamination in both the Vickers area and the Stillmeadow subdivision. Sin erely, Vat/tAl--4.-L-4' (_} d'. / ;_./z_p TO I CY Pat Popp ALL CMS i j Pres.dent, Stillmeadow Neighborhood Association D IST 2 I-7 -- DIST.#3.__,�___ DIST#4 I""' DIST.#5._.._.--I DIST.#3 DIST.#7 CH.OF STAFF STAFF CITY CLERK__ 67"y LOBBYIST I 0 ifR. w , NOV 04 `04 TIME is , , 1 PETITION Vickers Redevelopment Site We, the undersigned residents living in and around Still Meadow, are opposed to the redevelopment of the Vickers site as it is now being proposed: We are in opposition of this development because we feel there are many issues that will seriously affect our neighborhood and are not being properly addressed by the developer. These issues include, but are not limited to: Environmental and the health impact, TIF funding, Tax implications, Traffic flow, the over crowded development and the many discrepancies presented by the devetopers.since:the revealing of this project_ For a list of these concerns please contact the Still Meadow Neighborhood Association. t- Contact Names: Pat Popp 571-4638, Bill Gottsch 991-6211 or Kitty Smith 572-5226 Printed Name Signe Name Address Vito/Ada ? ✓ , ....a... Z I,_ xi.. 7 ±4 s S1W Y \L C-,A4SCt1 *Ad 6 1 Rmrkla '15 S— e,rv-J2 . �5M "f�2 vsKy �(1 (/drAi /7 i Of i sg-_-f,, —TT(Rivo vsky Ittigt, L./AA/An-vat) , Cam/. 1) ,-114 PA7,6, i IA�.R,2 10.0tg 0 -.-- ec ,).k% --rs°‘- .(A . ._, ( .# lid>,,o,/, Z l a ,1.-:-.,, 0\‘,4, ` (5i7 „a, `7s P_ct °i &o, / iaJa3 Lid Qa-a2 642l7 /V '75 St L . /C�.✓L/.�.�..t1gik r.i 6,,,,,,,,,, id, &lb R` ). `7/O . *4 \11 C-V ek<.cAor .Slr�k h IJ5� 1,��CArk C9 . tit i i I (,�. tr I i 7 Ot /L.e' 41-beq CIA nova Z, Y7f� Ki 76p4A �sl— (‘- '11e1.4, (C9i-e---t-4---.1i 3 t C,(k-v. (e.4-ilif A/ `7 . ?A' ,tll/1ymt( 4iyf --E) 1 ! !M ) woe y&A- c -' iri TehnSo „ ��yi:_,...-,..,4,f,„i Geid.0 A) 76 Si— r)4 `0*Y,6 m_ct- . `'Ae.�- ( &//7V 76 'SEL, l cam..► -1 le 12S �'� 4')u..0 t;'"1 4 3 23 �, �C P�rh/ s hi) C,-G4 Al 9 11,3(' lV 7 1-- Si., /4 fek if 26 / 76 9 'rim S1 4frk .5iii . ---- 4 2/y /i-, 6 47 4 ' 1 • PETITION Vickers Redevelopment Site We, the undersigned residents living in and around Still Meadow, are opposed to the redevelopment of the Vickers site as it is now being proposed. We are in opposition of this development because we feel there are many issues that will seriously affect our neighborhood and are not being properly addressed by the developer. These issues include, but are not limited to: Environmental and the health impact, TIF funding, Tax implications, Traffic flow, the over crowded development and the many discrepancies presented by the developers since the revealing of this project. For a list of these concerns please contact the Still Meadow Neighborhood Association. Contact Names: Pat Popp 571-4638, Bill Gottsch 991-6211 or Kitty Smith 572-5226 Printed Name Signed Name Address Zoe_ ��r�sf-n� ,���..�, > 4 ,0 Ai25 ,ST' ne, ,(f 7616 57 ��� r;Lk P�v�( ka r 1,01 Z 3 N.r-K41� `�E c-L-S\ Cs eA a �s� - am.-rI./� C�223 NI _ PETITION i Vickers Redevelopment Site We, the undersigned residents living in and around Still Meadow, are opposed to the redevelopment of the Vickers site as it is now being proposed. We are in opposition of this development because we feel there are many issues that will seriously affect our neighborhood and are not being properly addressed by the developer. These issues include, but are not limited to: Environmental and the health impact, TIF funding, Tax implications, Traffic flow, the over crowded development and the many discrepancies presented by the developers since the revealing of this project. For a list of these concerns please contact the Still Meadow Neighborhood Association. Contact Names: Pat Popp 571-4638, Bill Gottsch 991-6211 or Kitty Smith 572-5226 Printed Name Signed Name Address ,D e ila, QJigle te ( 7-�.. S , Jy 75 * (4, x>yNNV /V //7,4 c (f) *War ftA (:) \„zo" '\\L1 i'c_C s p L 11ir 1 �e empty * jribrra "Wit fir/ �� (�/U�r � `�/ N � ; alh��,n 6Sis 26" -- Ja s„,, Yo.5 r Gail A) )C`W: deCtaerpiPeL. 5 4A k (D7'1 Ai 7 5 ; PETITION Vickers Redevelopment Site We, the undersigned residents living in and around Still Meadow, are opposed to the redevelopment of the Vickers site as it is now being proposed. We are in opposition of this development because we feel there are many issues that will seriously affect our neighborhood and are not being properly addressed by the developer. These issues include, but are not limited to: Environmental and the health impact, TIF funding, Tax implications, Traffic flow, the over crowded development and the many discrepancies presented by the developers since the revealing of this project. For a list of these concerns please contact the Still Meadow Neighborhood Association. Contact Names: Pat Popp 571-4638, Bill Gottsch 991-6211 or Kitty Smith 572-5226 Printed Name Signed Name Address S— V aft-SMACK c1( ( A).: 767-tt- CR, S ut_S c,„ 6 rc,s M(c k- Aitzel 6117 Ai 76 " PETITIO►N Vickers Redevelopment Site We, the undersigned residents living in and around Still Meadow, are opposed to the redevelopment of the Vickers site as it is now being proposed. We are in opposition of this development because we feel there are many issues that will seriously affect our neighborhood and are not being properly addressed by the developer. These issues include, but are not limited to: Environmental and the health impact, TIE funding, Tax implications, Traffic flow, the over crowded development and the many discrepancies presented by the developers since the revealing of this project. For a list of these concerns please contact the Still Meadow Neighborhood Association. Contact Names: Pat Popp 571-4638, Bill Gottsch 991-6211 or Kitty Smith 572-5226 Printed Name Signed Name Address . r ,L)A d jot/112e t-ozzs,y 4 7 /7/-e-.4,-/ ri iA/ 7 7 3 4P A c S-7% ji,e4;alvit /% '-7 /PAC) Pte PETITION Vickers Redevelopment Site We, the undersigned residents living in and around Still Meadow, are opposed to the redevelopment of the Vickers site as it is now being proposed. We are in opposition of this development because we feel there are many issues that will seriously affect our neighborhood and are not being properly addressed by the developer. These issues include, but are not limited to: Environmental and the health impact, TIF funding, Tax implications, Traffic flow, the over crowded development and the many discrepancies presented by the developers since the revealing of this project. For a list of these concerns please contact the Still Meadow Neighborhood Association. Contact Names: Pat Popp 571-4638, Bill Gottsch 991-6211 or Kitty Smith 572-5226 Printed Name Signed Name Address ft 775-07Z. 144.-1/ grja-- - 7✓'cz„/c< -� ?Cif � cr. - /X, 722FF✓? 571 i ea. for ip . L, o % s / 0 GL ,a a Z 3 PETITION Vickers Redevelopment Site We, the undersigned residents living in and around Still Meadow, are opposed to the redevelopment of the Vickers site as it is now being proposed. We are in opposition of this development because we feel there are many issues that will seriously affect our neighborhood and are not being properly addressed by the developer. These issues include, but are not limited to: Environmental and the health impact, TIE funding, Tax implications, Traffic flow, the over crowded development and the many discrepancies presented by the developers since the revealing of this project. For a list of these concerns please contact the Still Meadow Neighborhood Association. Contact Names: Pat Popp 571-4638, Bill Gottsch 9p1-6211 or Kitty Smith 572-5226 Printed Name Signed Name ' Address Katie Dr sP J t e/Z c23S Al. 754-A Si; z O b z� CD z0 O cn n CA o� . -' p' a . j. a C N°° a OQ 8No t7 q Cr' \ a O c o CD O a n CZ 0\ o 0 1 m o b 0N "'� 0 -J \ HOUSTON ENGINEERING Consulting Engineering 6r)9 Willow Avenue, #3W T3 C{. / Services Council Bluffs, IA 51501 ALL E A'S V 712-323-3498 OIST.f l Mchoustonpe©aol.com DIST.f2 OISL/3 GIST.f4 OIST.IS DIST.f6 Man CH.OF STAFF V December 31, 2004 STAFF • Mr. James D. Sherrets art CLERK Attorney at Law LOBBYIST Sherrets& Boecker LLC, Suite 200 LAW Dr»T 260 Regency Parkway Drive JAN 0 3 '05 Omaha, Nebraska 68114 Re: Current Environmental Status ME 6 Former Eaton Corporation Plant Report Explanation - . Dear Mr. Sherrets: The scope for my work as agreed upon in our meeting December 6, 2004 in your offices with you and My, Randy Lenhoffwas an overly simplistic one. Some additional requests later to me by you and Seldin Company were really in the impossible category considering the time limitation imposed. As a result, the Houston Engineering report"Current Environmental Status of Former Eaton C tporation Plant,Om ,_ Nebraska" did not cover some areas. The Focused RCRA Facility Investigation (FRFI)requested in the site EPA Consent Order(April 1999) was to"---fully characterize the nature and vertical and horizontal extent of any release of hazardous waste and/or hazardous constituents at or from the Facility---- .The FRFI issued in September 2001 does not meet the objective. Examples: Soils at the Hazardous Materials 90-Du Storage Building area near the northwest corner of the building were not sampled. Surface water runoff and some groundwater may have gone towards a deep ravine near the northwest corner of the property there. Other examples:Areas inside the building were not evaluated by coring through concrete and collecting_ soil for testing Particular] +himshould have been done in the b_otfoms of all sump areas. One large trichloroethylene spill is known to have gone to a large sump somewhat centrally located in the plant.-No test results were found for concrete or soil there. Concrete is not an acceptable material of construction for chlorinated solvents. It does not properly'contain' them. Unused equipment was moved to the old airport hangars along the west side of the southwest corner of the property without draining their fluid reservoirs. Fluids eventually leaked out.These areas or ones slightly to the west and down-slope were not tested. This facility used many dangerous chemicals including some carcinogenic ones and.oenerated many hazardous wastes. It was a true RCRA Treatme eat r,e.. an isoosal Facility They operated an incinerator at one time. They were a RCRA Hazardous Waste TSD Facility—a maior environmental concern. As such testing of the entire facility should have been extensive. The FRFI investigation did not • do this. —� My background: My first contamination cleanup was about 1969. My employer, 3M Company,was a good company in almost all ways. We sent a chemical to a public landfill that should not have gone there. I was one of the ones who removed it from the landfill. I did HDR Engineering's first industrial hazardous contamination extent of contamination determination and cleanup in a Chicago manufacturing area. Many more projects of these types were done after leaving HDR in 1983 to work as an independent consulting engineer. Until better defined, a realistic source area for groundwater contamination for the former Eaton (cont.) Mr. James D. Sherrets—Page 2 manufacturing plant is the whole west-half of the property. Residential neighbors of the ro ert to the west-northwe c • ion from source area disturbances on the Eaton property. Sincerely, Michael C. Houston, P.E. cc: Mr. Marc Kraft, Omaha City Councilman Mr. Mike Fahey, Omaha Mayor Ms. Katherine Smith, Site Residential Neighbor Mr. James B. Gulliford, U.S. EPA Region 7 U.S. Senator E. Benjamin Nelson Mr. Ted Seldin, Seldin Company Mr. Randy Lenhoff, Seldin Company TJ CY ALLCM'S DIST.S1 • i• DIST. __= . DIST. DIST. DISL#S DIST DIST.17 CH.Of STAFF STAFF CITY CLERIC LOBBYIST JAN03 '05 TIME p rp o o co C �. p , 0 cD o0 CD V` C�Jp • 11- •• trl N Se/din Company i 1J E E I'.`t: Since 1923 Real Estate Development • Commercial Sales & Leasing • Commercial Real Estate Property Management • Multi-Family Property Management 05 j; -14 Ali 11: 23 CY G:l ' '.•, ;!1: +: s 1 I. ALL CIA'S TO DIST.11 • DIST.f2 January 3, 2005 DIST.f3 DIST.f DIST.5 .— Councilman James Vokal, Jr. DIST.f6 City of Omaha CH 0 STAFF 1819 Farnam Street STAFF Omaha, NE 68183 CITY CLERK LOBBYIST RE: Vickers Redevelopment Plan JAN O it '05 Dear Mr. Vokal: (� Tfl4� I represent the developers of Benson Park Plaza. We continue to oppose the above redevelopment plan and ask that you vote in opposition to it. This $8.49 million dollar expenditure of taxpayers funding is excessive and unnecessary. In fact, the $8.49 million dollar TIF amortized at 7% actually costs the taxpayers $13,982,345 over the TIF 15 years. The Target purchase price at $3.36 per foot is below the market price paid by Target for other locations in Omaha. Home Depot paid $4.93 per sq. ft. and Albertson's $6.63 per sq. ft. for their sites at 72nd & Military, 32% and 49% higher than Target's purchase price. In addition, both Home Depot and Albertson's contributed to development costs the same as the Target deal. This retail deal can and should stand on its own without TIF subsidy. Target would locate in North Central Omaha with or without taxpayer subsidy. Under oath, the Kimco representative stated that Target insists on getting their purchase discounted based upon the fact that the developer has obtained City TIF subsidy. Kimco does developments like this all over the country with Target without TIF. According to the actual budget submitted to the City Planning Department, the developer will make a huge profit in the $15-$18 million dollar range. A Kimco representative further testified that Kimco will sell (spin off) this development within 3 years. The big losers are the moderate and low income families in Omaha. The average retail pays $8.00per hour. The average manufacturingjob pays $17.00 per hour. jobP Y 9P Y Enclosed are excerpts from a study by the National Low Income Housing Coalition web site, www.nlihc.org. The average worker in Omaha must earn $12.50 per hour to rent a two bedroom apartment in Omaha. This 500,000 sq. ft. air conditioned plant is still useable as a manufacturing facility. Jobs that pay $15.00 to $17.00 an hour would provide good long term employment for many moderate to low income members of our community. Lozier and other users planned on using part or all of the facility. In fact, Lozier offered $5.8 million for the plant which offer Montclair Professional Center 13057 West Center Road • Omaha,NE 68 1 44-3 790 • 402.333.7373 • FAX 4 2.333.4281 • www.seldin.com AGENDA r . was turned down by Eaton Corporation in 2001 because they did not want to accept responsibility for environmental cleanup which legally is their obligation. Given adequate time and market, another manufacturing/industrial user will eventually make an offer to use this facility. If TIF funds are needed to help close a deal with a manufacturing or industrial user it would be money well spent by the City. Unfortunately Lozier bought a facility in Alabama so that opportunity was missed. Most amazing, as proven by their own records in a recent lawsuit, there is a Partnership Agreement between Kimco and its local developer KDI which states that Kimco will proceed with the deal if they receive a $3 million dollar TIF! If you feel this commercial development should proceed, why give them $5.49 million more taxpayers dollars than they need? Such subsidy also creates an unfair competition for other owners through North Central Omaha which will also cause dislocation of existing commercial space from areas to the east in the City. Thank you for your consideration. Please feel free to call me with any questions at 934- 6139. Sincerely, Seldin Company Agent for Benson Park Plaza, L.L.C. Randy Lenhoff President Enclosures RL/cw Seldin Company NLIHC: Out of Reach, 2004: Nebraska Page 1 of 4 • `44 National Low Income Housing Coalition • Home t Search Pins Dedicated solely to ending.America's af'xdabie housing crisis, Out of Reach 2004 • Nebraska In Nebraska, an extremely low income household (earning $17,394, 30% of the Area Median Income of$57,981) can afford monthly rent of no more than $435, while the Fair Market Rent for a two bedroom unit is $576. A minimum wage earner (earning $5.15 per hour) can afford monthly rent of no more than $268. An SSI recipient(receiving $564 monthly) can afford monthly rent of no more than $169, while the Fair Market Rent for a one-bedroom unit is $461. In Nebraska, a worker earning the Minimum Wage ($5.15 per hour) must work 86 hours per week in order to afford a two-bedroom unit at the area's Fair • Market rent. • The Housing Wage in Nebraska is $11.08. This is the amount a full time (40 hours per week) worker must earn per hour in order to afford a two-bedroom unit at the area's Fair Market rent. A unit is considered affordable if it costs no more than 30%of the renter's income. It'a69Rii!AM!Y�...��.w.............fN. 's.^.4vi��,FACfkMMi.�L11iMtl�kll`AS,h11T'Y.4tl?.*'TiF'Sd'AL4x..:.iPaw.v..c�.TF. 'M'N.:V?'R.S�.Y.'.1.9T `KGX1A.x..eF..a:J`MMro:Worts!f?11`Mai•S.At:R^5. ..FK :.% '.':.-I;gYY.:M1:X4ftiYtMf1 For an explanation of this data, see How to-_use the Numbers and Where the Numbers Come From. Number of Households —_ Location Renter Households as Percent Total Households Renter Households of Total Households Nebraska ��— 666,184 216,878 33% Omaha,NE--IA MSA,Nebraska 241,721^-- -__ 83,796 —_� 35% Douglas County 182,194 66,995 37% 2004 Family Income --2004 Annual Median Incomel Maximum Affordable2 Monthly Housing Cost by Location (HUD) % of Family AMI http://www.nlihc.org/oor2004/data.php?getstate=on&getmsa=on&msa%5B%5D=209&g... 12/27/2004 • NL1HC: Out of Reach, 2004: Nebraska Page 2 of 4 Annual Monthly 3AMIf 30% 50% 80% 100% Nebraska y__--_ $57,981 $4,832 $17,394 $435 $725 $1,160 $1,450 Omaha,NE-- $64,000 $5,333 $19,200 $480 $800 $1,280 $1,600 IA MSA,Nebraska DouglasCounty $64 000 $5,333 $19;200 $480 $800 $1,280 $1,600 • Fair Market Rents (FMR)3 by Number of Bedrooms Location Zero One Two Three Four ^ Nebraska _^ $414 $461 $576 $769 $849 Omaha,NE--IA MSA,Nebraska $456 $523 $650 $878 $904 Douglas County $456 I $523 S650 $878 S904 r2004 Renter Households Income Needed Number Number Estimated Renter to Afford 2BR Earning 30% of Earning 30- Monthly Rent Location Median Annual FMR AMI 50% of AMI Affordable Income as Percent of or Less Unable Unable to at Renter Renter Median to Afford Rent Afford Rent Median (2000) (2000) Nebraska- _ $30,301 76% 29,646 20,770 $758 Omaha,NE - $33,054 79% 11,327 8.285 S826 IA MSA,Nebraska Douglas County $31,574 82% 10052 6768 $789 Income Needed to Afford FMR �T-��M•____-_._�__ Annual Amount � - Percent of Fam Location Zero One Two Three Four Zero One Two Bedrooms Bedroom Bedrooms Bedrooms Bedrooms Bedrooms Bedroom Bedrooms Nebraska S16,575 $18,432 $23,055 $30,749 S33,951 29% 32% 40% Omaha,NE-- $18,240 $20,920 $26,000 S35,120 $36,160 29% 33% 41% IA MSA,Nebraska Douglas County Yi $18.240 I $20,920 4 S26,0000 $35,120 $36,160 I 29% 33% _ 41% ._._�_...._.__ � �._.._._. � -•._ Housing Wage - ..._ Hourly Wage Needed to Afford As % of Minimum Wa (@ 40 hrs./wk.). (Nebraska=$$5.15) Location _ Zero One Two Three Four Zero One Two T Bedroom Bedroom Bedroom Bedroom Bedroom Bedroom Bedroom Bedroom Be FMR FMR FMR FMR FMR FMR FMR FMR F Nebraska $7.97 $8.86 $11.08 -_$14.78 $16.32 155% 172% 215% Omaha,NE-- $8.77 $10.06 $12.50 $16.88 $17.38 170% 195% 243% IA MSA,Nebraska '..._� Douglas County m1 -^�$8.77 $10.06 $12.50 $16.88 $17.38 170% I 195% 1.-_ 243% ... ... http://ww w.nlihc.org/oor2004/data.php?getstate=on&getmsa=on&msa%5B%5D=209&g... 12/27/2004 NLIHC: Out of Reach, 2004: Nebraska Page 3 of 4 work Hours/Week Necessary at Minimum • Wage to Afford (Nebraska=45.15) Location Zero One Two Three Four Bedroom Bedroom Bedroom Bedroom Bedroom FAIR FMR FMR FMR FMR Nebraska _+~ --- 62 69 86 115 127 Omaha,NE--IA MSA,Nebraska 68 78 97 131 135 Douglas County —-- 68 78 97 131 135 CHART FOOTNOTES 1. HUD,2004. "Affordable"rents represent the generally accepted standard of spending not more than 30% of income on housing costs. 3. HUD,2005. 4 Annual income of 30%of AMI or less is the federal standard for extremely low income households.Does not include HUD-specific adjustments. Compare to Last Year's Out of Reach data View Out of Reach 2003 data for this area. Receive Data To download an Excel file with the data for each state below, click its name. • Nebraska To download an Adoble Acrobat (pdf) file with the data for each state below, click its name. • L. • Nebraska Back to Out of Reach Table of Contents. Back_to_NLIHC.Ho-me.pa.be. National Low Income Housing Iiti Coalition ion (NLIHC) 1012 Fourteenth Street NW, Suite 610, Washington, D.C. 20005 202/662-1530; Fax 202/393-1973; info@nlihc.org nlihc.org 0 0 http://www.nlihc.org/oor2004/data.php?getstate=on&getmsa=on&msa/o5B/o5D=209&g... 12/27/2004 T . ZINSMASTER - Direct ( By MR . BOECKER ) 143 1 basis of the payment that Target is making on those 2 transactions ? 3 A . Again , it depends on the site . 4 MR . in den BOSCH : Form . 5 MS . VOEGELE : Join . 6 THE WITNESS : It depends on the site 7 _ specifics.. 8 3Y MR . BOECKER : • 9 Q . What ' s the ranges that you ' ve seen? i0 A . Generally -- 11 MR . in den BOSCH : Object to form . 12 MS . VOEGELE : Join . 13 THE WITNESS : Generally Target pays what 14 we pay as a pass -through . They typically negotiate 15 a number , they do their analysis , their research 16 based on anticipated sales , and they ' ll come to us 17 and say the all- end price on this location is 18 4 million , and they will then tell us how much of 19 that would be allocable to site work and land 20 acquisition , but the all- end number is 4 million . 21 It ' s up to us to make certain that • 22 • $ 4 million makes sense . We don ' t -- we don ' t 23 typically make money on Target sales . 24 BY MR . BOECKER : 25 Q . Target or tenants like Target typically THOMAS & THOMAS COURT REPORTERS AND CERTIFIED LEGAL VIDEO , L . L . C . ( 402 ) 556- 5000 ( FAX ) 556- 2037 T . ZINSMASTER - Direct ( By MR . BOECKER ) 144 1 serve as anchors , correct ? 2 A . Yes . 3 Q . Within the industry it ' s important to 4 secure anchor tenants , correct ? 5 A . Yes . 6 MS . VOEGELE : Objection . 7 BY MR . BOECKER : _ 8 Q . -Anchor- tenants draw other tenants to your 9 center , correct ? 10 MS . VOEGELE : Objection : Form . 11 THE WITNESS : Yes . 12 BY MR . BOECKER : 13 Q . , That ' s why they ' re anchors , right? 14 MS . VOEGELE : Objection : Form . . 13 BY THE WITNESS : 16 Q . It ' s where the terminology comes from, 17 correct ? 13 A . Yes . 19 • Q . And oftentimes developers in the industry 20 give anchor tenants _a. deal to get them into a 21 center ? • 22 MS . VOEGELE : Objection : Foundation and 23 form . 24 THE WITNESS : .A deal,? 25 MR . in den BOSCH : Join . THOMAS & THOMAS COURT REPORTERS AND CERTIFIED LEGAL VIDEO , L . L .-C . ( 402 ) 556- 5000 ( FAX ) 556- 2037 T . ZINSMASTER - Direct ( By MR . BOECKER ) 145 1 BY MR . BOECKER : 2 Q . Below market rates ? 3 A . It hasn ' t been my experience of giving 4 anything less than our cost . 5 Q . Well , below market rates relative to what 6 you would charge other third parties ? VOEGELE : Objection :MS . Form . g THE WITNESS :. It ' s ..-- we wouldn ' t -- we 9 wouldn ' t be at this location without Target . We 10 wouldn ' t close without Target . We -- they want to 11 buy their property at the same price or less than 12 what we paid . 13 To my knowledge , we- haven ' t agreed to 14 anything less than what we paid , so in terms of a 15 deal , it ' s more of a pass -through , but you have to 16 understand, they ' re right -- I mean , they ' re toe to 17 toe with us at the starting line , so it ' s not like 18 we ' re offering them a deal . 19 BY MR . BOECKER : 20 Q . They ' re going to get more favorable terms 21 than a tenant that would come to you later 22 presumably , correct ? 23 MS . VOEGELE : Objection : Form . 24 ! THE WITNESS : Yes . 25 • THOMAS & THOMAS COURT REPORTERS AND CERTIFIED LEGAL VIDEO , L . L . C . ( 402 ) 556- 5000 ( FAX ) 556 -2037 T . ZINSMASTER - Direct ( By MR . BOECKER ) 146 1 BY MR . BOECKER : • 2 Q . By virtue of the fact that they ' re with 3 you from the beginning - - 4 A . Yes . 5 Q . -- right ? 6 That allows you to enhance the viability 7 of the underlying shopping center project so you can 8 go out and market this with. an anchor tenant in 9 place , correct ? 10 MS . VOEGELE : Objection : Form . 11 THE WITNESS : Yes . 12 BY MR . BOECKER : 13 Q . All. right . I ' m going to go through some 14 documents here that have been produced by 15 intervenors ' counsel in this case previously . You 16 may or may not have seen this . I ' m just going to 17 ask you questions to see whether or not you have in 18 fact seen these or have any knowledge about these 19 various documents . 70 The ,first one I ' m going to show you is 21 Exhibit 152 , intervenors ' answers and objections to 22 interrogatories , have you ever seen that document 23 previously? 24, A . I have not . 25 Q . Okay . With respect to the questions THOMAS & THOMAS COURT REPORTERS AND CERTIFIED LEGAL VIDEO , L . L . C . ( 402 ) 556- 5000 ( FAX ) 556- 2037 1 IN THE DISTRICT COURT OF DOUGLAS COUNTY , NEBRASKA 2 BENSON PARK PLAZA, LLC , ) DOC . 1035 NO . 209 3 , PLAINTIFF , ) 4 VS . ) OR/GINA CITY OF OMAHA, MAYOR )MIKE FAHEY , MARC KRAFT , 6 FRANK BROWN , JAMES . ) VOKAL, JR . , GARRY GERNANDT , ) ; ,\0;112./371, 7 D A N WELCH , F R A N K L I N ) <<0\ THOMPSON , AND ) � , . ^ �`' '-'\ 8 CHUCK SIGERSON JR . ) • N ; 142OG4 p1 - fv • Oi;iPAS'2tL r 9 DEFENDANTS . ) C L`ti ip DEPOSITION OF 11 TODD A . ZINSMASTER 12 TAKEN ON BEHALF OF PLAINTIFF 13 14 DEPOSITION OF TODD A . ZINSMASTER , taken 15 before Cynthia Craig , General Notary Public within 16 and for the State of Nebraska , beginning at 17 9 : 15 a . m . , on June 4 , 2004 , at the Law Offices of 18 Koley Jessen , P . C . , One Pacific Place , Suite 800 , 19 1125 South 103rd Street , Omaha , Nebraska 20 ( . 21 22 23 24 25 THOMAS & THOMAS COURT REPORTERS AND CERTIFIED LEGAL VIDEO , L . L . C . ( 402 ) 556- 5000 ( FAX ) 556-2037 T . ZINSMASTER - Direct ( By MR . BOECKER ) 141 1 BY MR . BOECKER : 2 Q . Okay . Did you read at any point in time • 3 the deposition of Mr . Jim Otis ? 4 A . I have not , that wasn ' t provided to me . • 5 Q . Okay . Do you have any experience in 6 the - - in the negotiating or working on the sale of 7 buildings or components within the project site to a 8 particular user such as Target ?_ , If someone like a Target wants to come in and buy some space within J 10 your center do you play any role in that process ? 11 A . I play a minor role . 2 Q . Okay . 13 A . I don ' t physically have any contact with 14 Target . I would be part of the support to Norm or 15 Dan who is in the midst of doing the negotiation . 16 Target negotiations are usually done by Norm , Dan or 17 Jerry , our president . 18 Q . Okay . Do you have any idea what the ig typical sale price of land in Omaha , Nebraska , is 20 for commercial retail property? 21 A . I do not . . 22 Q . Based upon your experience in the 23 industry , what do you typically see it going for in 24 the national projects that you deal with? 25 MS . VOEGELE : Objection : Form.. THOMAS & THOMAS COURT REPORTERS AND CERTIFIED LEGAL VIDEO , L . L . C . ( 402 ) 556- 5000 ( FAX ) 556 -2037 • T . ZINSMASTER - Direct ( By MR . BOECKER ) 1 42 THE WITNESS : From what perspective ? I 2 mean , is it raw land , improved land? 3 • BY MR . BOECKER : 4 Q . Raw land . 5 A . Boy , I got to tell you , it really depends 6 on the site , . how much brain damage is needed to 7 improve it , the location , you know , the 8 demographics . I can' t an.s.wex that . 9 Q . What are the ranges that you have seen 10 based on your training and experience with Kimco ? 11 A . Well , I have seen them, you know , as 12 inexpensive as , you know , a dollar a square. foot to 13 as high as , you know , 12 , 13 . It all depends on -- 14 obviously , Long Island , New York , would be more 15 expensive than Tampa , Florida ; Tampa , Florida , would 16 probably be more expensive than Des Moines , Iowa . 17 Q . Have . you had any other experience in 18 dealing with sales to Target while associated with 19 Kimco? 20 A. From what perspective ? 21 Q . Working on projects where a portion of a 22 center or a parcel of property within a proposed 23 center has been sold to Target ? 24 A . Yes . 25 Q . What ' s the typical range on a square foot THOMAS & THOMAS COURT REPORTERS . AND CERTIFIED LEGAL VIDEO , L . L . C . ( 402 ) 556-5000 ( FAX ) 556- 2037 • • • O • Coo S CD C o .P N O p O C O CD • o 2. am O CD P- Cip x zK %, CD�, p 0 pa cp O CD H 01-04-2005 12:35PM FROM-CB RICHARD ELLIS MEGA +4026975859 T-895 P.001/001 F-843 CBAEJrnicgCB RICHARD MEMORANDUM ELLIS To: Jim Otis C/O Ken Johnson, City of Omaha Planning Dept. Via fax 444-6140 From: David H. Maenner, SIOR, CCIM L'A9^ CBRU/Mega �v ' E-mail: david.maenner(a,cbre.com Direct Dial 402-697-5862 Date: January 4, 2005 Re: Target Land Sale Comparisons Pages: 1 Jim, Pursuant to your request, I have represented Target Stores, in addition to the sale of your site at 72nd and Sorenson Parkway, in the sale of their previous 3 expansions. Below is the size and pricing of these sales of which I have first hand information. In all cases, these sales were for Iand only and did not include parking Iots, grading, surcharging or retaining walls. There may be an instance where the seller included part of a common drive, but I can't specifically recall which one. The sales and dates: Name Address Price Acres Sq. Ft. PSF Date of Sale Target NWC 36th and Hwy 370 $2,150,000 9.87 429,937 $5.00 06/25/02 Super Target 180th & W Center $3,683,750 15.83 689,555 $5.34 02/04/00 Super Target 718 N Washington $2,000,000 20.70 901,692 $2.22 03/01/95 Let me know if I can assist further. David H. Maenner January 4, 2004 • \\mn6eomagel1701\vecm\DMoonneA4nydoes\Davc Filce\Working FIIe6\Maln Film\Targei\N,72nd StreatVim Oils MEND.Target Compambin Soles I-4-2005.doc OPt 11/16/04 TUE 16:39 FAX 516 869 7256 - KINCO REALTY CORP. 012 • AMENDMENT NO.6 TO REAL ESTATE PURCHASE AGREEMENT TNiS AMENDMENT NO. 6 TO REAL ESTATE PURCHASE AGREEMENT ("Amendment") is made and entered into as of October 15, 2004, by and between Eaton Hydraulics Inc.,a Delaware corporation,whose address is 1111 Superior Ave., Cleveland, Ohio 44114; Attn: Real Estate Department ("Seller"), and KDI Omaha, L.P., a Nebraska limited partnership,whose address is c/a Kimco Realty Corporation, 3333 New Hyde Park Road, New Hyde Park,New York 11042("Purchaser"). WITNESSETH : WHEREAS, Purchaser's Assignor and Seller entered into a Real Estate Purchase Agreement dated April 16, 2003(the "Original Agreement,"to which reference should be made for all terms not otherwise herein defined), pertaining to the Property located on the Southwest corner of 72nd Street and Sorenson Parkway, Omaha, Nebraska, and more particularly described in the Original Agreement, which Original Agreement was amended by the parties pursuant to that certain Amendment to Real Estate Purchase Agreement dated October 7, • 2003, Amendment No. 2 to Real Estate Purchase Agreement dated November 19, 2003, Amendment No. 3 to Real Estate Purchase Agreement dated November 26,2003,Amendment No. 4 to Real Estate Purchase Agreement dated April 13, 2004, and Amendment No.5 to Real Estate Purchase Agreement dated September 28,2004(collectively the"Agreement"); WHEREAS, the parties desire to amend certain portions of the Agreement, all as set forth in this Amendment; NOW, THEREFORE, in consideration of mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the parties hereto agree as follows: 1. All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Agreement. 2. Extension of Inspection Period. The parties acknowledge and agree that the final extension of the Inspection Period contemplated under Section 6(a) of the Agreement would have expired as of October 15, 2004. The parties agree that the Inspection Period is hereby extended for an additional four(4) month period ending February 15, 2005. The parties further acknowledge and agree (I)that the total sum of Earnest Money and Extension Deposit paid by Purchaser to date is $190,000; (ii)that the total amount of Earnest Money and Extension Deposit, exclusive of interest thereon, shall be increased as of the date of this Amendment No. 6 to the aggregate amount of$200,000: and (iii)that the total amount of Earnest Money and Extension Deposit,exclusive of interest thereon,shall be increased as of December 15, 2004 to the aggregate amount of$250,000; provided, however, the parties acknowledge that Purchaser may exercise its right to terminate this Agreement as provided in Paragraph 6 (a)on or before December 15, 2004, in which case the Final Deposit (as defined below) shall not become due and payable. Payment of the $10,000 balance due as of the date hereof("Additional Deposit") shall be made upon execution of this Amendment Purchaser may elect to defer payment of the $50,000 balance due on December 15, 2004 ("Final Deposit") until the earlier to occur of (i)Purchaser's breach, default or termination of the Agreement, or (il)February 16, 2005. Purchaser may elect to substitute a$50,000 irrevocable unconditional letter of credit in form and substance acceptable to Seller in place of cash for the payment of the Additional Deposit. Such Additional Deposit,together with the Earnest Money and Extension Deposit,shall be deemed to 11025609 268440.10 11/16/04 TUE 16:40 FAX 518 869 7256 KIMCO REALTY CORP. 12013 be "at risk" and non-refundable to Purchaser following the date hereof; and, if Purchaser does not exercise its right to terminate, the Final Deposit shall be deemed to be "at risk" and non- refundable to Purchaser on December 16, 2004 (whether paid then or deferred). In addition to the foregoing, the parties agree that the Closing of the transactions contemplated hereby shall occur on Tuesday, March 15,2005,unless the parties shall otherwise agree. 3. Amendment of Certain Environmental Provisions. (a) Section 7(c)(i) of the Agreement is hereby amended by inserting the following language immediately at its end: ''Notwithstanding the foregoing,any costs Purchaser incurs associated with securing approval from any Govemmental Agency relating to the Proposed Development(as defined In Section 8)shall be borne by Purchaser. Purchaser shall also bear all costs that are associated with Purchaser's performance of the"Work Plan for Interim Measures Associated with Site Redevelopment, Former Vickers,Inc.Site",EPA ID# NED007286198 Omaha,Nebraska,prepared by Haley&Aldrich, Inc. (H&A)for KD1 and submitted on May 10,2004,as such plan may be modified or amended(whether by H&A,Purchaser or any other agent for Purchaser)from time to time(the"H&A Work Plan). The parties expressly understand and agree that Purchaser shall not seek reimbursement for such costs from Seller or Unisys Corporation under any Environmental Law;provided,however,notwithstanding anything In this Agreement to the contrary, Purchaser(i)shall not be obligated to perform the H&A Work Plan if this Agreement is terminated for any reason,(ii)shall not be required to pay any costs incurred by Seller or any third party in securing approval from any Government Agency relating to the Proposed Development and the H&A Work Plan,and(iii) nothing in this Agreement shall be deemed to require Purchaser to perform any of the obligations of Seller or other responsible parties under the AOC, including,but not limited to any activities which would constitute Remediation,except to the extent the same are expressly set forth in the H&A Work Plan,if any." (b) Section 7(c)(Iv) of the Agreement is hereby amended by inserting the following language immediately at its end: "Purchaser also agrees to waive and release all claims against Seller related to, and shall indemnify Seller for, and save and hold Seller harmless from, the costs associated with Purchaser's performance of the H&A Work Plan under any Environmental Law." (c) Section 7(d)(i) of the Agreement Is hereby amended by inserting the following language immediately at its beginning: "Except as otherwise provided in this Agreement," (d) Section 7(d)(iv) of the Agreement is hereby amended by deleting the clause"Seller(including its agents, consultants and contractors)"where it first appears and replacing it with the words "Seller and any co- -2- 288440.10 11/16/04 TUE 16:40 FAX 516 869 7258 KIMCO REALTY CORP. f1014 responsible party under the AOC or other agreement (including their agents,consultants and contractors)." 4. Force and Effect. As herein modified, the Agreement shall remain in full force and effect in accordance with the terms and conditions thereof. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 5. Counterparts. This Amendment may be executed in counterparts,each of which shall be deemed an original and all of which together shall constitute the binding and enforceable agreement of the parties hereto. This Amendment may be executed and delivered by a party by facsimile transmission, which transmission copy shall be considered an original and shall be binding and enforceable against such party. IN WITNESS WHEREOF,the parties have executed this Amendment as of the date and year first above written. EATON HYDRAULICS INC., KDI OMAHA,L.P., a Delaware corporation,Seiler a Nebraska limited partnership,Purchaser By: KDI OMAHA, 1103, INC.,General Partner By: Dale R.Mitchell By. Likk Its: Director-Financial Services& Bruce M. Kauderer Assistant Treasurer of Eaton Corporation Its: Vice President By: a �'.P� Robert E. Parmenter Its:Vice President&Treasurer • -3- 268440.10 Jan 04 2005 2: 12PM Haley & Aldrich, Inc. 913-599-5822 p. 2 • Haley'&. Aldrich, Inc. 8700 Monrovia Suite 310-AT) i...enexa.KS U 215-3500 Tel: 913.599,5802. Tax: 913.599.5R22 }iatc'v ALdricit.ceu1 • HALEY& 4 January 2005 ALDRICH File No. 30095 • Mr. Larry Jobeun Fullenkamp, Doyle, &Joebun 11440 West Center Road Omaha, Nebraska 68144 Subject: Response to 31 December 2004 Letter Regarding Current Environmental Status, Former Eaton Corporation Plant Dear Mr. Jobeun: In response to the 31 December 2004 letter from Mr. 'Michael C. Houston to Mr. James D. Sherrets, Haley and Aldrich, Inc. offers the following input regarding Focused RCRA Facility OFFICES Investigation (FRFI) activities that have been completed for the Former Vickers, Inc. Site Boston (the "Site") located at 72' Street and Crown Point Avenue in Omaha, Nebraska. It lassitctllise'is Cleveland As noted in the first paragraph of the letter, Mr. Houston was requested to provide input on a Ohio series of requests in a short timeframe that put his response in the "impossible category" and Dayton his report did not cover some areas. This statement also implies that Mr. Houston was not ohio likely able to take sufficient time to thoroughly review historic information and evaluate that Detroit information against guidance documents and realistic investigation requirements. Hartford The FRFI for this Site has been conducted under the direct guidance of EPA. Soil and counecrrcau groundwater investigations have been ongoing at the site since 1988 and have included soil, f..os Ange.leN groundwater, and soil vapor sampling to evaluate potential source areas and lateral and C aitf'rn:a vertical extent of contamination. The FRFI was initially submitted to EPA in September Manciicster 2001. Though a formal approval of the FRFI has not been issued, it has been confirmed Net,flan:shire through personal conversation with the EPA project manager that outstanding issues P:trciP1»tiy associated with approval of the FRFI are related to obtaining delineation of the downgradient Ne+t'jersey groundwater plume and are not associated with further investigation of source area Portland contamination. Maine Providence As defined in the Administrative Order on Consent for Corrective Action for the Site, the iUtode Island statement of purpose for the FRFI is to "...fully characterize the nature and vertical and Rochester. horizontal extent of any releases of hazardous waste and/or hazardous constituents at or from New York the Facility." As defined in the RCRA Information Brief issued by the U.S. Department of San Diego Energy, dated November 1994, an "...RFI is a focused investigation that is designed to California characterize releases from individual solid waste management units rather than a Santa Barbara characterization of the entire facility." Additionally, as documented in the Interim Final RFI caii/orni;a Guidance, issued by EPA, dated May 1989, "...the regulatory agency will direct the owner or Tucson operator to investigate releases of concern. The investigation may initially involve riZuicri verification of suspected releases. If confirmed, further characterization of such releases will \.'ashirt oli be necessary." Many of the comments in the 3l December 2004 letter were - District of Columbia i' .I I I I Jan 04 2005 2: 12PM Haley & Aldrich, Inc. 913-599-5822 p. 3 Fullenkam p, Doyle, & loebun 4 January 2005 Page 2 oversimplifications of characterization needs without taking into consideration the intent of characterizing locations of releases rather than investigating every single location where wastes may have been located on the Site at some time in the history of the Site. In light of the above statements, it is our opinion that the Site has been extensively investigated over time. In particular, groundwater sampling and treatment continue at the Site at present day and are evaluated on a quarterly basis to confirm what concentrations exist. Groundwater concentrations are a telling sign of what contaminants releases occurred over time and where the source for these concentrations may have occurred. The groundwater data collected quarterly is consistent with a source area as defined in the FRFI, with no outlying areas of concern. Sincerely yours, HALEY & ALDRICH, INC. . , 14 Mariruth A. Gruis, P.E. Michael D. Basel, Ph.D, P.E. Senior Engineer Vice President HALEY& ALDRICH JHN-04-e005 13:08 FROM:THOMPSON HINE LLP 216-566-5800 TO:402 444 6140 P.002 ---yam • Eaton Corporation Er AT.N Eaton canter it'll Superior Avenue. December 30,.2004 Cleveland,OH 44114-2684 (216)523-5000 Theresa Jensen, 611.1 N 76th Circle Omaha,NE 68134 )')ear Theresa: Over the past five years,Eaton Corporation has kept you.informed of the status o'f the Vickers facility and the ongoing groundwater clean-up program associated with that property,which is located at 6.600 North 72"d Street. We have participated in public meetings,sent periodic letters to individual homeowners,and. we have made personal contact with many of you. • A groundwater clean-up program has been in effect at the plant since 1996,and significant progress has been made in removing chemicals from.the soil and groundwater that were used in previous manufacturing processes.The manufacturing facility was closed in 2001.Eaton has and continues to work closely with the U.S.Environmental,Protection Agency(EPA)and.the Nebraska Department.of • Environmental Quality(NDEQ),which art overseeing work'on this project. To our knowi.ed'ge,both agencies appear to be satisfied with our work to-date. A real estate company, KIM Omaha LP,is under contract to purchase the Vickers facility.KDI's current plans are to develop the property into a shopping center.We will not be involved In the development of the shopping center project;Eaton is simply the seller of the property. However,.Eaton will continue to have an important role in.the ongoing environmental,work.This letter will give you an update on how Eaton will work together with the new owner of the property to continue the groundwater clean-up project. KIX has'presented a.detailed proposal.to the U.S.EPA.for management of the existing environmental situation during redevelopment of the Sire.into a shopping:center. Upon receiving,EPA approval.,KDI will..in conjunction with.Eaton,make sure that the environmental work continues even while the shopping center development work is underway,After the construction is complete,Eaton and Unisys, the environmental project manager, will resume responsibility for the clean-up in conjunction with KD1, EPA and NDEQ. The EPA and NDEQ will continue to oversee all work. Please note that Eaton is not receiving any public funding for the development project or its environmental work. Eaton and Unisys are paying all the costs of the ongoing groundwater clean-up program: In addition,Eaton is continuing to maintain the existing building and grounds until.the property is sold.. Eaton and Unisys remain committed to the groundwater clean-up. We will:continue to keep you updated as the environmental work continues,even after the sale of the property. if you have any concerns about the environmental situation,please feel free to contact us at the numbers listed below. We would be happy to answer your questions. • Sincerely, � I ry Maser]. Trac/ ko Manager,Eaton Communications Department Swanson Russell Associates (216)523-4736 On Behalf of Eaton Corporation 492-3238 z O b 0D zo cr, 73 n o � IN., N P. O d J 0 N 56 8oO a� C coo C4 b c cA c 0 ,..,. .S.,) \ -c.....` "C CD C . & o CD cr \ 1 ` CD C C-1 CD o. bd " G o �, 1. • SHERRETS&BOECKER LLC James D.Sherrets 260 Regency Parkway Drive Eric J.Williams (also licensed in Colorado&Arizona) Suite 200 Omaha NE 68114 Kayla M.VanCannon (licensed only in Iowa) Theodore R.Boecker,Jr. (also licensed in Iowa) phone:(402)390-1112 Jason M.Bruno Benjamin E.Maxell fax:(402)390-1 163 (licensed only in Arizona) email:law@sherrets.com Tuesday, January 4, 2005 Omaha City Council Members City of Omaha City Council 1819 Farnam Street, Suite LC-1 Omaha,Nebraska 68183 Re: Former Vicker's Plant Site at 6600 North 72nd Street in Omaha,Nebraska Dear Council Members: As you know, this Firm represents Benson Park Plaza and other concerned City of Omaha ("City") taxpayers for the above-referenced matter. As you also know, our clients oppose the proposed adoption of the Sorenson Park Plaza Development Plan("the Development Plan"). As we have mentioned in previous correspondence, previous City Council meetings and previous.City Planning Board meetings, several reasons exist why the City Council should reject the proposed the Development Plan, along with the proposed "blighted and substandard" designation for the Property. As noted previously, the partner funding the project has entered into a Limited Partnership Agreement which calls for them to fund in the event that there is an award of$3.0 million of TIF or more. The President of the partner (Kimco's Norm Brody) testified under oath that if there was an award of$3.0 million and the other contingencies were secured (such as EPA approval of a work plan, which has not yet been obtained), Kimco would be obligated to go forward with funding. To justify that exorbitant $8.49 million dollar TIF request, KDI's representatives have tried to paint a picture suggesting that the site is environmentally contaminated with no hope of being used in the future. For example at the December 3, 2003 City Planning Board Meeting, Mr. Jobeun asserted that: "There is a substantial amount of contamination on the site such as cutting oils, solvents and cooling oils, which are buried beneath the ground . .. ." * * * * * • _ "We have submitted three proposals . . . for the remediation of the site to the EPA. The costs range from $2.2 million to $5 million to remediate the site. These proposals include . . . the moving of 17,500 tons of contaminated soil. If you equate that to truck loads, that's about 1000 truckloads of soil being removed from this site." * * * * * ". . . the TIF will . . . be used for the environmental remediation which . . . is between $2.2 and $5 million . . . The amount of the TIF request is $8,490,000.00. The project supports that amount. And, the amount of the TIF requested is necessary to make this project feasible given the high costs and risks associated with this particular project." * * * * * ". . . in order to get any kind of redevelopment at this particular site because of the high costs of remediation, you need those types of economic development tools to make this project work." * * * * * ". . . it's an incredibly expensive process; that's why the costs could be as high as $5 million for the remediation. The EPA likes that plan because what it does is that it cleans as much of that soil as they possibly can. Otherwise, if it even sits on this property for another 30 to 40 years . . . it will probably still be contaminated because you will have this slow extraction as opposed to the removal of the soil, and even with the removal of the soil, like we are talking about here, there's still contaminated soil below." Additionally, at the February 24, 2004 City Council Meeting, Mr. Jobeun stated: "Tests of the soil around the tanks indicated that they had been leaking. The contaminants included . . . cooling oils, cutting oils and solvents . . . The EPA confirmed that the underground storage tanks were the source of the contamination . . . and that the contamination was migrating . . . to the West." * * * * * "There has been discussion as to why we are using TIF . . . for the remediation . . . What has been required by the EPA . . . is that we remove the storage tanks and approximately 17,500 tons of contaminated soils . . . 17,500 tons of soil equates to about 1000 dump truck loads of soil. . ." However, thereafter, Michael Mostek of Koley Jessen, P.C., an environmental lawyer working on the project, stated that the soil contamination is not nearly as bad as Mr. Jobeun had previously represented. Specifically, at the December 1, 2004 City Planning Board Meeting, Mr. Mostek stated: ". . . recent tests have shown that the cleanup system for the soil that's been running the last 8 or 9 years has done a very, very good job. . . preliminary indications are that the soil . . . [is] . . . not very contaminated . . ." * * * * * "We don't expect the soil contamination to get any worse. There's no more releases or leaking or leaching or anything like that going on." * * * * * ". . . recent tests show . . . there's not much [residual contamination] . . ." * * * * * " . . . [tests indicate] that the soil cleanup-system has done a very good job. . ." Furthermore, Mr. Mostek stated that KDI has no interest in cleaning-up the site. In this regard,Mr. Mostek stated: "By virtue of our agreement with Eaton, anything that needs to be done to reconfigure the current setup has to be done by the developer. Once that's done, then it's . . . Eaton's baby again until the thing is cleaned up . . . we're not trying to clean it up. We're just trying to do what we have to do to redevelop." Recently, in a letter dated December 30, 2004, Eaton Corporation claimed that they would clean up the property and not use public funding. Notwithstanding these representations, KDI continues to include a line item in excess of $2.2 million for environmental work in its budged, in addition to more than $2.5 million for demolition and grading work already accounted for in the budget. The bottom line is that this site is not a present risk to the neighbors because the contamination has been capped. Eaton is responsible for a clean-up plan and is paying for the clean-up. The purported original justification for TIF - the environmental contamination - is nothing more than a red-herring. KDI is not cleaning up the contamination and their project is not made more expensive because of it. Indeed, if anything, because of the movement of contaminated soils, and the exposure of moisture to presently capped areas, this project actually runs the risk of creating further contamination for the neighbors, than eliminating it. As a consequence of the foregoing, there is no need for TIF on this project. Certainly, if any TIF is awarded it should only be the $3.0 million that the developer committed itself to proceed under. 1 '' Sincerely, I' • l---................_ , i - - Theodore R. Boecker For the.Firm I 1 I I I • t. 1 II . I I 1 • • i' 1 1 ,. I di' * -..., . ., CONFIDENTIAL - Kimco Developers 1� ,,. Sorenson Park Plaza/Omaha,NE ,: Protected Operation Draft#2 J Slte Plan#TBD r:;, Date: 08/16103 IK, { Rental Income $ 4,341,000 Less:Vacancy Factor 5.0% (28,800) Net Rental Income $ 4,312,200 • Less:Management Fees 3.0% (129,366) �. Less:Unrecoverable Reimbursments 1.0% (43,122) " Net Operating Income • $ 4,139,712 t,' { 'r Less:Capital Reserves $0.10 Per SF (44,500) 1 Cash Flow $ 4,096,212 ' 4'S YY, Project Cost-See Costs Projection $ 36,236,000 Capitalized Value(NOI/ Cap Rate) 9.50% $ 4.3,576,000 .r Capitalized Value Over Project Cost $ 7,340,000 'r\- Profit Allocation: KDI: 50.00% $ 3,670,000 1 PARTNER NAME: 50.00% $ 3,670,000 1 Return on Investment 11.42% • • Footnotes: • I 1 Assumes NNN for all leases(Cam/Tax/Ins are 100%reimbursable). 2 The above analysis assumes that proceeds from all pad sales and other parcel sales reduce the cost of the project. This may or way CTI or accounting handles the treatment of said proceeds. f 3 Does not include possible TIF to cover Demolition,Environmental Costs&Off-Site Improvements. i Including the income from a$3m TIF payable over 15 years,rasles the ROI to 11.92%. i + w•= 4 Does not Include any rental income during the project. 4 Approved By: Date: I ) , . Approved By: Date: �" Jerald Friedman Kimco Developers 'a t "' EXHIBIT, :... PreU„yg_# )4t. Page 1 of 7 � ! Kimco Developers CONFIDENTIAL Sorenson Park Plaza/Omaha,NE Prolected Operation . Draft#2 Site Plan#TBD I4 Date: 08/01/03 d f Rental Income $ 4,341,000 Less:Vacancy Factor 5.0% (28,600) " Net Rental Income $ 4,312,200 Less:Management Fees 3.0% (129,366) Less:Unrecoverable Reimbursments 1.0% (43,122) Net Operating Income $ 4,139,712 ' r.. Less:Capital Reserve $0.10 Per SF (44,500) Cash Flow $ 4,095,212 Project Cost-See Costs Projection $ 36,166,000 I Capitalized Value(NOI/ Cap Rate) 9.50% $ 43,576,000 Capitalized Value Over Project Cost $ 7,411,000 Profit Allocation: KDI: 50.00% $ 3,705,500 `<` PARTNER NAME: 50.00% $ 3,706,500 Return on Investment . 11.46% a rr Footnotes: ll 1 Assumes NNN for all leases(Cam/Tax/Ins are 100%reimbursable). 2 The above analysis assumes that proceeds from all pad sales and other parcel sales reduce the cost of the project. This may or way CTI or accounting handles the treatment of said proceeds. .1 &3 Does not include possible TIF to cover Demolition,Environmental Costs Off-Site Improvements. Including the income from a$5m TIF payable over 15 years,rasies the ROI to 12.60%. , 4 Does not include any rental income during the project. Approved By: Date: t'; i Approved By: Date: )`, Jerald Friedman Kimco Developers w" . EXHIBIT 1. w 1 1 .,,, Page 1 of 8 i A S(a— _~ a 1 , . CONFIDENTIAL i . 1 Kimco Developers Sorenson Park Plaza/Omaha,NE 1 Projected Operation 11 I 1 I Draft#3 I • Site Plan#TBD 4 1 Date: 10121103 Rental Income $ 4,341,000 • I Less:Vacancy Factor 5.0% • (28,800) Net Rental Income $ 4,312,200 + 'I Less:Management Fees 3.0% (129,366) '' Less:Unrecoverable Reimbursments 1.0% (43,122) F 1 Net Operating Income $ 4,139,712 Less:Capital Reserve $0.10 Per SF. (44,500) •I•` 9 Cash Flow $ 4,096,212 1 ' 1 . , I i Project • Cost-See Costs Projection $ 36,357,000 Capitalized Value(NOI! Cap Rate) 9.50% $ 43,676,000 I• . Capitalized Value Over Project Cost $. 7,219,000 !1. Profit Allocation: KDI: 50.00% $ 3,609,500 1' PARTNER NAME: 50.00% $ 3,609,600 11 J11 Return on Investment 11.39% ` �t .I . i i' I• 11 ri ,l I, N l: Footnotes: 1 Assumes NNN for all leases(CamRaxllns are 100%reimbursable). • 2 The above analysis assumes that proceeds from all pad sales and other parcel sales reduce the cost of the project. This may or • way CTI or accounting handles the treatment of said proceeds. 3 Does not include possible TIF to cover Demolition,Environmental Costs&Off-Site Improvements. Including the income from a$5m TIF payable over 15 years,rasies the ROI to 12.60%. 1 4 Does not include any rental income during the project. Approved By: Date: Approved By: Date: E' Jerald Friedman Kimco Developers • 1 I k. m EXHIBIT i; • ' $ GI .i I1a21,ey1 Page 1 of 8 t y\�(�'�� tT ?.VI�V�1�� I . 11 ' 'f 11 II J l: , Kimco Developers n ; ' Sorenson Park PlazalOmaha,NE H 1 Protected Operation CONF1DENTLL i Draft#4 • Site Plan#TBD Date:10129103 Rental Income $ 5,235,016 I ` Less:Ground Rent 5.0% (33,903) Less:Vacancy Factor Net Rental Income $ 5 201 113 1 1 (128,069) 'I i Less:Management Fees 3.0% (42,690) I Less:Miscellaneous Admin.Expense 1.0% Net Operating Income $$ 5 Less:Capital Reserve $0.10 Per SF (43,967) . • Cash Flow S 4,986,388 ' y Project Cost-See Costs Projection . $ 40,395,000 Capitalized Value(NOI/ Cap Rate) 9.50% $ 52,951,000 Capitalized Value Over Project Cost $ 12,556,000 - I t. T. Profit Allocation: KDI: 50.00% $ 6,278,000 , ; Partner: 50.00% $ 6,278,000 1 -I. . i Return on Investment 12.45% 1) . . • ,i 1 rii 1, '1i a� iI li, • • -4, ; EXHIBIT I: -. , i I c. 0C182430 DCX _.�_,.,__ _._ .. Pa•e 2 ia2nn • 06/01/2004 16:14 4023971579 WOLTBMATH OTIS PAGE 02 Kielce Developers Sorenson Park PlassOmaha,NE Protected Overshoe i;. • Situ Pole:: CONFIDENTIAL Rental Income S 5,151,788 Leas:Ground Rent Less:vacancy Foctor S.0% (33,903) Net Rental income S 5,117,983 if Less:Management Fees 3.0% (153.538) l • Less:MiscellaneousAdmin.Expense 1.0°A (51,179) I•;: Net operating Income S 4,913,149 I n Less:Capital Reserve 90.10 Per SF (43,8871 Cash Flow S 4,989�292 Projact COO-See Coate Projeolien 5 41,319,000 Capitalized Value(NOII Cep Rote) 9,50% S 51,717.000 Capitalised Value Over Project Cost $ 10,399,000 Profit Allocation: -KDl: 50,00% $ 5,199,000 Partner: 50.00% 9 5,182,000 I Return on Investment ]104Y1. 1 j l • 41 1, • 1 i o ': 1 Klmco Developers Sorenson Park PlazalOmaha,NE CONFIDENTIAL • Draft# 6A Site Plan f 111712003 ' Date:11/1110 3 $ 4,960,724 Rental Income Less:Ground Rent 5 0"�° (33,903 1 Less:Vacancy Factor $ 4 926,821 Net Rental Income _ } 3.0% (147,805) 1, Less:Management Fees 1 0% _ (4g,268) 11 Less:Miscellaneous Admin.Expense b 4 7®9 748_ Net Operating Income (43 867 °'` $0.10 Per SF 1 Less:Capital Reserve $ 4,6® Cash Flow Project Cost-See Costs Projection $ 41,319,000 Capitalized Value(NO!1 Cap Pate) 9.50% $ 49.787,000 i ` Capitalized Value Over Project Cost $ 8,468,000 �� ! }I • Profit Allocation: KDI: 50.00% $ 4,234,000 ! !! Partner. 50.00% $ 4,234,000 1; P 11.45% 4 ; Return on Investment • I 41,4 II j ; • • ' l • 'I I I ''i . hid cm EXHIBIT 1 r' ' i i • { Kimco Developers }. fki Sorenson Park Plaza/Omaha,NE %�i Projected Operation l i h w .;,1 Draft#6 '; Site Plan# 1117/2003-C1.1 I Date:11I18I03 : Rental Income $ 4,960,724 i I l F ,<R -- Less:Ground Rent - I= Less:Vacancy Factor 5.0% (33,903) 14, Net Rental Income $ 4,926,821 �'; . s Less:Management Fees 3.0% (147,805) I) ai Less:Miscellaneous Admin.Expense 1.0% (49,268) f e Net Operating Income $ 4,729,748 :i�II I<F.A: r, Less:Capital Reserve $0.10 Per SF (43,867) � 1,�p F ._ Cash Flow $ 4,685,881 i 4 1 Project Cost-See Costs Projection $ 41,319,000 , i.I Capitalized Value(NOI/ Cap Rate) 9.50% $ 49,787,000 Capitalized Value Over Project Cost $ 8,468,000 1+ - ' Profit Allocation: KDI: 50.00% $ 4,234,000 , • ',Ii`5: Partner: 50.00% $ 4,234,000 I . fi ; Return on Investment 11.45% Cl � ';�, 7 :', VJ � Footnotes: � 1 Assumes NNN for all leases(Cam/Tax/Ins are 100%reimbursable). - 2 The above analysis assumes that proceeds from all pad sales and other parcel sales reduce the cost of the project. This may or may not be the way CTl or accounting handles the treatment of said proceeds. 3 Does not include any rental income during the project. s` Approved By: Date: 1, I' Jim Otis • i- IF WoltemathiOtis Development,Inc %IL i! I: Approved By: Date: Jerald Friedman I- Kimco Developers i • • Icy; ,' a''. • I :, 4( — / CO° 4 /7 I ' f tom/ p 1 E ( '' Oil/ if)1141/14 ' EXHIBIT y ' is • iL ; I ,; • SHERRETS&BOECKER LLC James D.Sherrets 260 Regency Parkway Drive Eric J.Williams (also licensed in Colorado&Arizona) Suite 200 Omaha NE 68114 Kayla M.VanCannon Theodore R.Boecker,Jr. (licensed in Iowa) (also licensed in Iowa) phone:(402)390-1112 Jason M.Bruno Benjamin E.Maxell fax:(402)390-1163 (licensed in Arizona) email:taw@sherrets.com Tuesday, January 4, 2005 City Clerk, Buster Brown 1819 Farnam Street Omaha,NE 68183 RE: Sorenson Parkway Plaza proposed development at 6600 North 72nd Street (Vicker's) Dear Mr. Brown: Enclosed are materials that we would like to make part of the record before the City Council with respect to Agenda Item 29 relating to the proposed KDI Redevelopment Agreement: 1. Report of Mike Houston. 2. Correspondence of Dennis Blackman,with attachments. 3. Correspondence of Theodore R. Boecker, Jr., with attachments. Thank you. Sinc/erely-- Theodore R. Boecker For the Firm HOUSTON ENGINEERING Consulting Engineering 609 Willow Avenue, #3W Services Council Bluffs, IA 51501 712-323-3498 Mchoustonpe@aol.com . December 30, 2004 • Mr. James D. Sherrets Attorney at Law Sherrets&Boecker LLC, Suite 200 260 Regency Parkway Drive Omaha, Nebraska 68114 ' Re: Current Environmental Status Former Eaton Corporation Plant Omaha, Nebraska Dear Mr. Sherrets: 1 In a December 6, 2004 meeting in your offices, you requested a short-term, limited environmental assessment of the former Eaton Corporation plant site in conjunction with a proposal to redevelop the • site.The site location is 6600 North 72nd Street, Omaha, Nebraska. Vickers, Inc.was the previous owner and the location is known to many as the former Vickers manufacturing plant site. This letter presents my environmental concerns and conclusions for this investigation. This project has been separated into three parts as follows: -An evaluation of the pollutants and contaminants currently on-site. — Human health and environmental factors for the adjoining residential area to the west- northwest. —Concerns that the City of Omaha as a party to proposed redevelopment and taxpayers will pay for site cleanup. The three topic areas are covered in the following sections. • A. Current Site Contamination The former Eaton Corporation site has serious contamination and environmental problems. Several are covered in this section. 1. Underground Plant Liquid Waste Collection Tanks. The tanks are located on the west side of the plant building about 1/3 of the way from the south end to the north end of the building. A total of six tanks in this area were abandoned 'in-place' in 1992 and 1993. The bottoms of the four larger, 3000- gallon Waste Holding Tanks extended to deems 9heground. feet These two tanks and two others which low the concrete surfacing in t other two tanks were smaller and not asp n were removed from the ground in 1988 are not covered specifically in this report. ► Abandoning the four large Waste Holding Tanks'in-place' means that: (1)sludge accumulations in the tanks were removed as hazardous wastes and transported to a commercial incinerator in Kansas City, Missouri for disposal; (2) the insides of the tanks were cleaned; (3) they were filled with concrete (or LiI possibly sand to near their tops and then concrete); and (4) new backfill and concrete surfacing were I placed over them. The concrete surfacing and most of the soil down to the tank tops at about 8-1/2 feet below the original surface grade had been removed and transported to a local landfill. The four Waste Holding Tanks are still there along with the contaminated soils adjacent to them from approximately 8-1/2 to 19-foot depths. The highest concentrations of chemical pollutant at that time were determined by soil testing to be from 20 to 25 feet down or just below the tank bottoms. The tanks were in an area of about 30 by 45 feet. Chlorinated chemicals (solvents) present included trichloroethylene, 1,1,1-trichloroethane, 1,1-dichloroethane, and chloroform. A number of other chemicals including metals, oils, and greases were also present. There is no reason to believe that a substantial part of contaminants has been removed by remediation operations at the site. 2. Other Pollutant Source Areas. Site investigations to date do not appear to have covered all source ^ areas. Some of these are: a. Plant waste sumps and areas both inside and outside of the building below piping (channels) that carried wastes to the underground Waste Holding Tanks. Wastes are often found below sumps and piping. b. A large Chromic Acid Tank located in the northwest corner of the building. Dimensions for this tank have been estimated as 14 feet by 18 feet by 10-foot deep. The plant reported cyanide jwastes so they may have been part of operations in this area. c. Painting performed by the plant must have been extensive. No cleanup has been indicated for painting areas inside the plant, a paint storage building located away from the building, and. areas of spillage or dumping. d. Most of the whole area west of the building extending out away from the building about 200 feet should be considered as source area for the groundwater treatment and soil vapor extraction operations being done at the site. Reasons include: (1) surfacing concrete has been cracked and broken throughout much of the area; (2) chromium has been detected in a groundwater monitoring well (MW-3)next to the building approximately 170 feet from the north end; and (3) the trichloroethylene (TCE) groundwater contamination plume runs essentially north along the building from the Waste Collection Tanks area for a distance. B. Human Health and Environmental Factors The adjoining plant residential neighbors to the west-northwest are the primary concern of this section. Any disturbance of a contamination source area on the Eaton property could cause polluted groundwater to leave the site to the west. These areas are covered by an Environmental Protection Agency (EPA) Consent Order controlling the remediation operations and restricting activities in the source areas. The source areas cannot be disturbed in any way that could cause more contamination to reach the groundwater. Site grading in source areas would cause this. Site remediation must continue as it is. An additional soil vapor extraction point has been considered a possibility in site documentation and should be installed if it would be beneficial. Federal regulations require that the current remediation steps are to be performed for a total of 30 years. The start of this period was 1993 so activities are to be controlled at the site until 2023. The only alternative is full EPA- directed cleanup and closure of the site as prescribed in federal regulations (40 CFR Part 265 and other applicable parts). Residential neighbors have already been through a cancer risk investigation based on vapors coming• from groundwater under their homes. The risks were determined to be low (acceptable—not a problem) but they certainly should not have to go through this type of investigation again. Current remediation efforts have essentially stopped contaminates of concern from leaving the Eaton site in groundwater. The residential neighbors must be vigilant in their watch over site activities. The stakes are high—their health and environment. } C. Eaton Site Cost Factors Costs related to contamination on the Eaton Corporation site are beyond the scope of this assignment. But some comments and opinion can be provided based on experience. Cleaning the site in a complete EPA cleanup and closure could be extremely expensive. This could give a site with no further contamination threat and without deed restrictions or limitations on future uses of the site. For perspective, assume that total cleanup and closure costs would be $25,000,000. It could be less. It might be a lot higher. The City of Omaha and taxpayers should not have to pay any part of this. The City and taxpayers should not be drawn into the situation through a tax-increment financing (TIF) scheme. The City has apparently not made estimates of the true costs involved. If the site is to be cleaned and closed, the property owner, Eaton Corporation, is financially responsible for doing it just as they are currently responsible for current remediation programs at the site. Sincerely, /4-e��" • Michael C. Houston, P.E. Nebraska Registration No. E-4839 Attachments: A Site Layout(from earlier document) B Hazardous Waste Generated by and Chemicals Used by Eaton Corporation C Abandonment of Liquid Waste Collection Tanks—3 Sheets(copies) D Site Redevelopment'Do Not Disturb'Areas E Code of Federal Register—Selected Sections on Hazardous Waste Identification Criteria, RCRA Closure and Post-Closure _jj F Houston Engineering Qualifications :J 1 , • • • • . , ATTACHMENTS . 1 • , • • • 77„) • • • f...---Nct aD Parking c Io I r ..... : 1 (tf , Redick No Scale C Ave. 1 { \. . Holding Tank Manufacturing (Tank No. 6) Plant Waste 0 1 Collection i • Tanks 1 (Tank Nos. 1 through 5) s r � On ) N Parking p / I 4 J Parking Parking . I I J \ c•—.1- — -. - i 1 Crown Point Ave. '-- ATTACHMENT A ,_ Hila,11141i Facility Site Plan Technologies Inc.Nino , Revised from HDR Waste Tank Closure Plan - Vickers Incorporated • 06602-005-107 Figure 2 1 ATTACHMENT B Hazardous Wastes Generated by Former Eaton Corporation Manufacturing Plant, Omaha, Nebraska D001 §261.21 Characteristic of ignitability. (a)A solid waste exhibits the characteristic of ignitability if a representative sample of the waste has any { of the following properties: (1) It is a liquid, other than an aqueous solution containing less than 24 percent alcohol by volume and has flash point less than 60°C (140 °F), as determined by a Pensky-Martens Closed Cup Tester, using the test method specified in ASTM Standard D-93-79 or D-93-80(incorporated by reference, see §260.11), or a Setaflash Closed Cup Tester, using the test method specified in ASTM Standard D-3278- 78 (incorporated by reference, see§260.11), or as determined by an equivalent test method approved by } the Administrator under procedures set forth in §§260.20 and 260.21. (2) It is not a liquid and is capable, under standard temperature and pressure, of causing fire through • friction, absorption of moisture or spontaneous chemical changes and,when ignited, bums so vigorously and persistently that it creates a hazard. (3) It is an ignitable compressed gas as defined in 49 CFR 173.300 and as determined by the test methods described in that regulation or equivalent test methods approved by the Administrator under §§260.20 and 260.21. (4) It is an oxidizer as defined in 49 CFR 173.151. (b)A solid waste that exhibits the characteristic of ignitability has the EPA Hazardous Waste Number of D001. [45 FR 33119, May 19, 1980, as amended at 46 FR 35247, July 7, 1981; 55 FR 22684, June 1, 1990] • } D002 • • §261.22 Characteristic of corrosivity. (a)A solid waste exhibits the characteristic of corrosivity if a representative sample of the waste has either of the following properties: (1) It is aqueous and has a pH less than or equal to 2 or greater than or equal to 12.5, as determined by a pH meter using Method 9040 in"Test Methods for Evaluating Solid Waste, Physical/Chemical Methods," EPA Publication SW-846, as incorporated by reference in§260.11 of this chapter. (2) It is a liquid and corrodes steel (SAE 1020)at a rate greater than 6.35 mm(0.250 inch)per year at a test temperature of 55°C(130°F) as determined by the test method specified in NACE (National Association of Corrosion Engineers)Standard TM-01-69 as standardized in"Test Methods for Evaluating Solid Waste, Physical/Chemical Methods," EPA Publication SW-846,as incorporated by reference in§260.11 of this chapter. (b)A solid waste that exhibits the characteristic of corrosivity has the EPA Hazardous Waste Number of D002. 1 [45 FR 33119, May 19, 1980, as amended at 46 FR 35247, July 7, 1981; 55 FR 22684, June 1, 1990; 58 FR 46049,Aug. 31, 1993] ! §261.31 Hazardous wastes from non-specific sources. (a)The following solid wastes are listed hazardous wastes from non-specific sources unless they are excluded under§§260.20 and 260.22 and listed in appendix IX. J ' 1 F001. The following spent halogenated solvents used in degreasing: Tetrachloroethylene, trichloroethylene, methylene chloride, 1,1,1-trichloroethane, carbon tetrachloride, and chlorinated fluorocarbons; all spent solvent mixtures/blends used in degreasing containing, before use, a total of ten percent or more(by volume)of one or more of the above halogenated solvents or those solvents listed in F002, F004, and F005; and still bottoms from the recovery of these spent solvents and spent solvent mixtures. F002 The following spent halogenated solvents:Tetrachloroethylene, methylene chloride, trichloroethylene, 1,1,1-trichloroethane, chlorobenzene, 1,1,2-trichloro-1,2,2-trifluoroethane, ortho-dichlorobenzene, trichlorofluoromethane, and 1,1,2-trichloroethane; all spent solvent mixtures/blends containing, before use, a total of ten percent or more(by volume) of one or more of the above halogenated solvents or those listed in F001, F004, or F005; and still bottoms from the recovery of these spent solvents and spent solvent mixtures. F010 Quenching bath residues from oil baths from metal heat treating operations where cyanides are used in the process. §261.33 Discarded commercial chemical products, off-specification species, container residues, and spill residues thereof. -. The following materials or items are hazardous wastes if and when they are discarded or intended to be discarded as described in§261.2(a)(2)(i), when they are mixed with waste oil or used oil or other material and applied to the land for dust suppression or road treatment, when they are otherwise applied to the land in lieu of their original intended use or when they are contained in products that are applied to the land in lieu of their original intended use, or when, in lieu of their original intended use, they are produced for use as(or as a component of)a fuel, distributed for use as a fuel, or burned as a fuel. (a)Any commercial chemical product, or manufacturing chemical intermediate having the generic name listed in paragraph (e)or(f) of this section. (b)Any off-specification commercial chemical product or manufacturing chemical intermediate which, if it met specifications, would have the generic name listed in paragraph(e)or(f)of this section. 1 (c)Any residue remaining in a container or in an inner liner removed from a container that has held any commercial chemical product or manufacturing chemical intermediate having the generic name listed in paragraphs(e) or(f)of this section, unless the container is empty as defined in§261.7(b)of this chapter. [Comment:Unless the residue is being beneficially used or reused, or legitimately recycled or reclaimed; or being accumulated, stored,transported or treated prior to such use, re-use, recycling or reclamation, EPA considers the residue to be intended for discard, and thus, a hazardous waste. An example of a legitimate re-use of the residue would be where the residue remains in the container and the container is used to hold the same commercial chemical product or manufacturing chemical intermediate it previously held. An example of the discard of the residue would be where the drum is sent to a drum reconditioner who reconditions the drum but discards the residue.] (d)Any residue or contaminated soil, water or other debris resulting from the cleanup of a spill into or on any land or water of any commercial chemical product or manufacturing chemical intermediate having the generic name listed in paragraph (e)or(f)of this section, or any residue or contaminated soil,water or other debris resulting from the cleanup of a spill, into or on any land or water, of any off-specification chemical product and manufacturing chemical intermediate which, if it met specifications, would have the generic name listed in paragraph(e)or(f)of this section. [Comment:The phrase"commercial chemical product or manufacturing chemical intermediate having the generic name listed in . . ." refers to a chemical substance which is manufactured or formulated for commercial or manufacturing use which consists of the commercially pure grade of the chemical, any technical grades of the chemical that are produced or marketed, and all formulations in which the chemical is the sole active ingredient. It does not refer to a material, such as a manufacturing process waste, that contains any of the substances listed in paragraph(e)or(f). Where a manufacturing process waste is deemed to be a hazardous waste because it contains a substance listed in paragraph(e)or(f), such waste will be listed in either§261.31 or§261.32 or will be identified as a hazardous waste by the characteristics set forth in subpart C of this part.] it I (e)The commercial chemical products, manufacturing chemical intermediates or off-specification commercial chemical products or manufacturing chemical intermediates referred to in paragraphs(a) through(d)of this section, are identified as acute hazardous wastes(H)and are subject to be the small quantity exclusion defined in §261.5(e). [Comment: For the convenience of the regulated community the primary hazardous properties of these materials have been indicated by the letters T(Toxicity), and R(Reactivity).Absence of a letter indicates that the compound only is listed for acute toxicity.] These wastes and their corresponding EPA Hazardous Waste Numbers are: P002 591-08-2 Acetamide, N-(aminothioxomethyl)- P030 Cyanides (soluble cyanide salts), not otherwise specified. (f)The commercial chemical products, manfacturing chemical intermediates, or off-specification commercial chemical products referred to in paragraphs(a)through(d)of this section, are identified as toxic wastes(T), unless otherwise designated and are subject to the small quantity generator exclusion defined in§261.5(a)and (g). [Comment: For the convenience of the regulated community, the primary hazardous properties of these materials have been indicated by the letters T(Toxicity), R(Reactivity), I (Ignitability)and C (Corrosivity). Absence of a letter indicates that the compound is only listed for toxicity.] These wastes and their corresponding EPA Hazardous Waste Numbers are: U043 Ethene, chloro- U044 Chloroform U044 Methane, trichloro- U154 Methanol U159 2-Butanone U220 Toluene __i U226 Methyl chloroform .J J • No Scale Chip Pad Bulk Liquid Tank No. 1 Storage • Building Tank No. 2 AlSrr Junction Chamber Waste raki (Tank No. 5) Tanks ' Tank No. 3 Polymer • System Tank No. 4 Building Chip Pad • ATTACHMENT C j Hifirsow Waste Collection Tanks Plan TedmologleS Inc. Waste Tank Closure Plan - Vickers Incorporated Revised from HDR 06802-005-107 Figure 3 I\ W —N I L� CD 1 , LI.. ....'� ' II nt O_ ......L„„,,,,, -,. .....„-_,.__ -- N . .i . a q • to CU 5 N II • C.) m le „m _ V c N ggo _ U CUY j j� ccg N E so U Z M v Hs,c„n rOig C Zuza- I --- t a II - I\ ...-. 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Redevelopment • DO NOT DISTURB AREAS to maintain residents' protection level for human health and environment N HOMES Groundwater VICKER'S PLANT Plume Building Outside Areas Building Floor and Property Line Below Floor Areas Scale: NOT TO SCALE HOUSTON ENGINEERING Sherrets&Boecker LLC Omaha, Nebraska Proposed Redevelopment Contamination DO NOT DISTURB AREAS M. Houston 12130/04 Att. D t ATTACHMENT E • Selected sections 0f Code of Federal Regulations follow s downloaded from `efcr.gpoaccess.gov'. Current as of December 21, 2004. Title 40: Protection of Environment PART 261—IDENTIFICATION AND LISTING OF HAZARDOUS WASTE Subpart D—Lists of Hazardous Wastes Browse Previous Browse Next § 261.21 Characteristic of ignitability. (a)A solid waste exhibits the characteristic of ignitability if a representative sample of the waste has any of the following properties: (1) It is a liquid, other than an aqueous solution containing less than 24 percent alcohol by volume and has flash point less than 60°C (140°F), as determined by a Pensky-Martens Closed Cup Tester, using the test method specified in ASTM Standard D-93-79 or D-93-80(incorporated by reference, see§260.11), or a Setaflash Closed Cup Tester, using the test method specified in ASTM Standard D-3278-78(incorporated by reference, see§260.11), or as determined by an equivalent test method approved by the Administrator under procedures set forth in §§260.20 and 260.21. (2) It is not a liquid and is capable, under standard temperature and pressure, of causing fire through friction, absorption of moisture or spontaneous chemical changes and, when ignited, bums so vigorously and persistently that it creates a hazard. (3) It is an ignitable compressed gas as defined in 49 CFR 173.300 and as determined by the test methods described in that regulation or equivalent test methods approved by the Administrator under§§260.20 and 260.21. (4) It is an oxidizer as defined in 49 CFR 173.151. l.� (b)A solid waste that exhibits the characteristic of ignitability has the EPA Hazardous Waste Number of D001. [45 FR 33119, May 19, 1980, as amended at 46 FR 35247, July 7, 1981; 55 FR 22684, June 1, 1990] § 261.22 Characteristic of corrosivity. ,_� (a)A solid waste exhibits the characteristic of corrosivity if a representative sample of the waste -1 has either of the following properties: (1) It is aqueous and has a pH less than or equal to 2 or greater than or equal to 12.5, as determined by a pH meter using Method 9040 in"Test Methods for Evaluating Solid Waste, Physical/Chemical Methods," EPA Publication SW-846, as incorporated by reference in§260.11 of this chapter. (2) It is a liquid and corrodes steel (SAE 1020)at a rate greater than 6.35 mm (0.250 inch) per year at a test temperature of 55°C(130°F)as determined by the test method specified in NACE (National Association of Corrosion Engineers) Standard TM-01-69 as standardized in "Test Methods for Evaluating Solid Waste, Physical/Chemical Methods," EPA Publication SW-846, as • ; incorporated by reference in§260.11 of this chapter.i (b) A solid waste that exhibits the characteristic of corrosivity has the EPA Hazardous Waste Number of D002. [45 FR 33119, May 19, 1980, as amended at 46 FR 35247, July 7, 1981; 55 FR 22684, June 1, 1990; 58 FR 46049,Aug. 31, 1993] • 1 § 261.23 Characteristic of reactivity. (a)A solid waste exhibits the characteristic of reactivity if a representative sample of the waste has any of the following properties: (1) It is normally unstable and readily undergoes violent change without detonating. (2) It reacts violently with water. (3) It forms potentially explosive mixtures with water. (4)When mixed with water, it generates toxic gases, vapors or fumes in a quantity sufficient to present a danger to human health or the environment. (5) It is a cyanide or sulfide bearing waste which, when exposed to pH conditions between 2 and 12.5, can generate toxic gases, vapors or fumes in a quantity sufficient to present a danger to human health or the environment. (6) It is capable of detonation or explosive reaction if it is subjected to a strong initiating source or ' I if heated under confinement. (7) It is readily capable of detonation or explosive decomposition or reaction at standard temperature and pressure. (8) It is a forbidden explosive as defined in 49 CFR 173.51, or a Class A explosive as defined in 49 CFR 173.53 or a Class B explosive as defined in 49 CFR 173.88. (b)A solid waste that exhibits the characteristic of reactivity has the EPA Hazardous Waste Number of D003. [45 FR 33119, May 19, 1980, as amended at 55 FR 22684, June 1, 1990] §261.33 Discarded commercial chemical products, off-specification species,container residues, and spill residues thereof. • The following materials or items are hazardous wastes if and when they are discarded or intended to be discarded as described in §261.2(a)(2)(i), when they are mixed with waste oil or used oil or other material and applied to the land for dust suppression or road treatment, when they are otherwise applied to the land in lieu of their original intended use or when they are contained in products that are applied to the land in lieu of their original intended use, or when, in j lieu of their original intended use, they are produced for use as (or as a component of) a fuel, distributed for use as a fuel, or burned as a fuel. (a)Any commercial chemical product, or manufacturing chemical intermediate having the generic name listed in paragraph (e)or(f)of this section. (b)Any off-specification commercial chemical product or manufacturing chemical intermediate which, if it met specifications, would have the generic name listed in paragraph(e) or(f)of this section. J . (c)Any residue remaining in a container or in an inner liner removed from a container that has held any commercial chemical product or manufacturing chemical intermediate having the generic name listed in paragraphs(e)or(f)of this section, unless the container is empty as defined in§261.7(b)of this chapter. [Comment:Unless the residue is being beneficially used or reused, or legitimately recycled or reclaimed; or being accumulated, stored, transported or treated prior to such use, re-use, recycling or reclamation, EPA considers the residue to be intended for discard, and thus, a hazardous waste. An example of a legitimate re-use of the residue would be where the residue remains in the container and the container is used to hold the same commercial chemical product or manufacturing chemical intermediate it previously held.An example of the discard of the • residue would be where the drum is sent to a drum reconditioner who reconditions the drum but discards the residue.] (d)Any residue or contaminated soil, water or other debris resulting from the cleanup of a spill into or on any land or water of any commercial chemical product or manufacturing chemical intermediate having the generic name listed in paragraph(e)or(f)of this section, or any residue or contaminated soil, water or other debris resulting from the cleanup of a spill, into or on any land or water, of any off-specification chemical product and manufacturing chemical intermediate which, if it met specifications, would have the generic name listed in paragraph(e) or(f)of this section. [Comment:The phrase"commercial chemical product or manufacturing chemical intermediate having the generic name listed in . . ." refers to a chemical substance which is manufactured or formulated for commercial or manufacturing use which consists of the commercially pure grade of the chemical, any technical grades of the chemical that are produced or marketed, and all formulations in which the chemical is the sole active ingredient. It does not refer to a material, such as a manufacturing process waste, that contains any of the substances listed in paragraph (e) or(f). Where a manufacturing process waste is deemed to be a hazardous waste because it contains a substance listed in paragraph (e) or(f), such waste will be listed in either§261.31 or §261.32 or will be identified as a hazardous waste by the characteristics set forth in subpart C of this part.] (e)The commercial chemical products, manufacturing chemical intermediates or off-specification commercial chemical products or manufacturing chemical intermediates referred to in paragraphs (a)through (d)of this section, are identified as acute hazardous wastes(H)and are subject to be the small quantity exclusion defined in§261.5(e). [Comment:For the convenience of the regulated community the primary hazardous properties of these materials have been indicated by the letters T(Toxicity), and R(Reactivity). Absence of a letter indicates that the compound only is listed for acute toxicity.] Title 40: Protection of Environment PART 265—INTERIM STATUS STANDARDS FOR OWNERS AND OPERATORS OF HAZARDOUS WASTE TREATMENT, STORAGE, AND DISPOSAL FACILITIES Subpart G—Closure and Post-Closure Browse Next §265.110 Applicability. Except as§265.1 provides otherwise: J (a) Sections 265.111 through 265.115(which concern closure)apply to the owners and operators of all hazardous waste management facilities; and (b) Sections 265.116 through 265.120(which concern post-closure care)apply to the owners and operators of: (1)All hazardous waste disposal facilities; (2)Waste piles and surface impoundments for which the owner or operator intends to remove the wastes at closure to the extent that these sections are made applicable to such facilities in j §265.228 or§265.258; (3)Tank systems that are required under§265.197 to meet requirements for landfills; and (4) Containment building that are required under§265.1102 to meet the requirement for landfills. (c) Section 265.121 applies to owners and operators of units that are subject to the requirements J of 40 CFR 270.1(c)(7)and are regulated under an enforceable document(as defined in 40 CFR 270.1(c)(7)). (d)The Regional Administrator may replace all or part of the requirements of this subpart(and the unit-specific standards in§265.111(c))applying to a regulated unit(as defined in 40 CFR 264.90), with alternative requirements for closure set out in an approved closure or post-closure plan, or in an enforceable document(as defined in 40 CFR 270.1(c)(7)), where the Regional Administrator determines that: (1)A regulated unit is situated among solid waste management units(or areas of concern), a release has occurred, and both the regulated unit and one or more solid waste management unit(s)(or areas of concern)are likely to have contributed to the release, and (2) It is not necessary to apply the closure requirements of this subpart(and/or those referenced herein)because the alternative requirements will protect human health and the environment, and will satisfy the closure performance standard of§265.111 (a)and(b). [51 FR 16451, May 2, 1986, as amended at 51 FR 25479, July 14, 1986; 53 FR 34086, Sept. 2, I 1988; 57 FR 37267, Aug. 18, 1992;63 FR 56734, Oct. 22, 1998] § 265.111 Closure performance standard. The owner or operator must close the facility in a manner that: (a)Minimizes the need for further maintenance, and (b) Controls, minimizes or eliminates, to the extent necessary to protect human health and the environment, post-closure escape of hazardous waste, hazardous constituents, leachate, contaminated run-off, or hazardous waste decomposition products to the ground or surface waters or to the atmosphere, and (c) Complies with the closure requirements of this subpart, including, but not limited to, the requirements of§§265.197,265.228, 265.258, 265.280, 265.310, 265.351, 265.381,265.404, and 264.1102. [51 FR 16451, May 2, 1986, as amended at 57 FR 37267, Aug. 18, 1992] §265.112 Closure plan; amendment of plan. (a) Written plan. By May 19, 1981, or by six months after the effective date of the rule that first subjects a facility to provisions of this section, the owner or operator of a hazardous waste management facility must have a written closure plan. Until final closure is completed and certified in accordance with§265.115, a copy of the most current plan must be furnished to the Regional Administrator upon request, including request by mail. In addition,for facilities without approved plans, it must also be provided during site inspections, on the day of inspection, to any I officer, employee, or representative of the Agency who is duly designated by the Administrator. .t (b) Content of plan.The plan must identify steps necessary to perform partial and/or final closure of the facility at any point during its active life. The closure plan must include, at least: (1)A description of how each hazardous waste management unit at the facility will be closed in accordance with §265.111; and (2)A description of how final closure of the facility will be conducted in accordance with §265.111. The description must identify the maximum extent of the operation which will be unclosed during the active life of the facility; and (3)An estimate of the maximum inventory of hazardous wastes ever on-site over the active life of • the facility and a detailed description of the methods to be used during partial and final closure, including, but not limited to methods for removing, transporting, treating, storing or disposing of all hazardous waste, identification of and the type(s)of off-site hazardous waste management unit(s) to be used, if applicable; and (4)A detailed description of the steps needed to remove or decontaminate all hazardous waste residues and contaminated containment system components, equipment, structures, and soils during partial and final closure including, but not limited to, procedures for cleaning equipment and removing contaminated soils, methods for sampling and testing surrounding soils, and criteria for determining the extent of decontamination necessary to satisfy the closure performance standard; and (5)A detailed description of other activities necessary during the partial and final closure period to ensure that all partial closures and final closure satisfy the closure performance standards, including, but not limited to, ground-water monitoring, leachate collection, and run-on and run-off j control; and (6)A schedule for closure of each hazardous waste management unit and for final closure of the facility. The schedule must include, at a minimum, the total time required to close each hazardous waste management unit and the time required for intervening closure activities which will allow tracking of the progress of partial and final closure. (For example, in the case of a landfill unit, estimates of the time required to treat or dispose of all hazardous waste inventory and of the time • required to place a final cover must be included.); and (7)An estimate of the expected year of final closure for facilities that use trust funds to demonstrate financial assurance under§265.143 or§265.145 and whose remaining operating life is less than twenty years, and for facilities without approved closure plans. (8) For facilities where the Regional Administrator has applied alternative requirements at a regulated unit under§§265.90(f), 265.110(d), and/or 265.140(d), either the alternative requirements applying to the regulated unit, or a reference to the enforceable document containing those alternative requirements. (c)Amendment of plan. The owner or operator may amend the closure plan at any time prior to the notification of partial or final closure of the facility. An owner or operator with an approved closure plan must submit a written request to the Regional Administrator to authorize a change to the approved closure plan. The written request must include a copy of the amended closure plan for approval by the Regional Administrator. (1)The owner or operator must amend the closure plan whenever: 4 (i) Changes in operating plans or facility design affect the closure plan, or (ii)There is a change in the expected year of closure, if applicable, or (iii) In conducting partial or final closure activities, unexpected events require a modification of the closure plan. (iv)The owner or operator requests the Regional Administrator to apply alternative requirements to a regulated unit under§§265.90(f),265.110(d), and/or 265.140(d). (2)The owner or operator must amend the closure plan at least 60 days prior to the proposed change in facility design or operation, or no later than 60 days after an unexpected event has occurred which has affected the closure plan. If an unexpected event occurs during the partial or final closure period, the owner or operator must amend the closure plan no later than 30 days after the unexpected event.These provisions also apply to owners or operators of surface 1 impoundments and waste piles who intended to remove all hazardous wastes at closure, but are required to close as landfills in accordance with §265.310. ,l (3)An owner or operator with an approved closure plan must submit the modified plan to the Regional Administrator at least 60 days prior to the proposed change in facility design or operation, or no more than 60 days after an unexpected event has occurred which has affected the closure plan. If an unexpected event has occurred during the partial or final closure period, the owner or operator must submit the modified plan no more than 30 days after the unexpected event. These provisions also apply to owners or operators of surface impoundments and waste piles who intended to remove all hazardous wastes at closure but are required to close as landfills in accordance with§265.310. If the amendment to the plan is a Class 2 or 3 modification according to the criteria in§270.42, the modification to the plan will be approved according to the procedures in§265.112(d)(4). (4)The Regional Administrator may request modifications to the plan under the conditions described in paragraph (c)(1)of this section. An owner or operator with an approved closure plan must submit the modified plan within 60 days of the request from the Regional Administrator, or within 30 days if the unexpected event occurs during partial or final closure. If the amendment is considered a Class 2 or 3 modification according to the criteria in §270.42,the modification to the 1 plan will be approved in accordance with the procedures in§265.112(d)(4). (d) Notification of partial closure and final closure. (1)The owner or operator must submit the closure plan to the Regional Administrator at least 180 days prior to the date on which he expects • '� to begin closure of the first surface impoundment, waste pile, land treatment, or landfill unit, or final closure if it involves such a unit, whichever is earlier. The owner or operator must submit the closure plan to the Regional Administrator at least 45 days prior to the date on which he expects • 3 to begin partial or final closure of a boiler or industrial furnace.The owner or operator must submit the closure plan to the Regional Administrator at least 45 days prior to the date on which he expects to begin final closure of a facility with only tanks, container storage, or incinerator units. Owners or operators with approved closure plans must notify the Regional Administrator in writing at least 60 days prior to the date on which he expects to begin closure of a surface impoundment, waste pile, landfill, or land treatment unit, or final closure of a facility involving such a unit. Owners or operators with approved closure plans must notify the Regional Administrator in writing at least 45 days prior to the date on which he expects to begin partial or final closure of a boiler or industrial furnace. Owners or operators with approved closure plans must notify the Regional Administrator in writing at least 45 days prior to the date on which he expects to begin final closure of a facility with only tanks, container storage, or incinerator units. (2)The date when he'expects to begin closure" must be either: (i)Within 30 days after the date on which any hazardous waste management unit receives the • known final volume of hazardous wastes, or, if there is a reasonable possibility that the hazardous waste management unit will receive additional hazardous wastes, no later than one year after the date on which the unit received the most recent volume of hazardous waste. If the J ' • owner or operator of a hazardous waste management unit can demonstrate to the Regional Administrator that the hazardous waste management unit or facility has the capacity to receive additional hazardous wastes and he has taken, and will continue to take, all steps to prevent threats to human health and the environment, including compliance with all interim status requirements, the Regional Administrator may approve an extension to this one-year limit; or (ii) For units meeting the requirements of§265.113(d), no later than 30 days after the date on which the hazardous waste management unit receives the known final volume of nonhazardous wastes, or if there is a reasonable possibility that the hazardous waste management unit will receive additional nonhazardous wastes, no later than one year after the date on which the unit received the most recent volume of nonhazardous wastes. If the owner or operator can demonstrate to the Regional Administrator that the hazardous waste management unit has the capacity to receive additional nonhazardous wastes and he has taken, and will continue to take, all steps to prevent threats to human health and the environment, including compliance with all applicable interim status requirements, the Regional Administrator may approve an extension to this one-year limit. (3)The owner or operator must submit his closure plan to the Regional Administrator no later than 15 days after: (i)Termination of interim status except when a permit is issued simultaneously with termination of interim status; or (ii) Issuance of a judicial decree or final order under section 3008 of RCRA to cease receiving hazardous wastes or close. (4)The Regional Administrator will provide the owner or operator and the public, through a newspaper notice,the opportunity to submit written comments on the plan and request modifications to the plan no later than 30 days from the date of the notice. He will also, in response to a request or at his own discretion, hold a public hearing whenever such a hearing might clarify one or more issues concerning a closure plan. The Regional Administrator will give public notice of the hearing at least 30 days before it occurs. (Public notice of the hearing may be given at the same time as notice of the opportunity for the public to submit written comments, and the two notices may be combined.)The Regional Administrator will approve, modify, or disapprove the plan within 90 days of its receipt. If the Regional Administrator does not approve ( the plan he shall provide the owner or operator with a detailed written statement of reasons for i the refusal and the owner or operator must modify the plan or submit a new plan for approval within 30 days after receiving such written statement.The Regional Administrator will approve or • I modify this plan in writing within 60 days. If the Regional Administrator modifies the plan, this modified plan becomes the approved closure plan. The Regional Administrator must assure that the approved plan is consistent with§§with 265.111 through 265.115 and the applicable requirements of subpart F of this part, §§265.197, 265.228, 265.258, 265.280, 265.310, 265.351, 265.381, 265.404, and 264.1102. A copy of the modified plan with a detailed statement of reasons for the modifications must be mailed to the owner or operator. (e) Removal of wastes and decontamination or dismantling of equipment. Nothing in this section shall preclude the owner or operator from removing hazardous wastes and decontaminating or dismantling equipment in accordance with the approved partial or final closure plan at any time before or after notification of partial or final closure. [51 FR 16451, May 2, 1986, as amended at 54 FR 37935, Sept. 28, 1988; 56 FR 7207, Feb. 21, 1991; 56 FR 42512, Aug.27, 1991; 57 FR 37267,Aug. 18, 1992; 63 FR 56734, Oct. 22, 1998] §265.113 Closure;time allowed for closure. (a)Within 90 days after receiving the final volume of hazardous wastes, or the final volume of nonhazardous wastes if the owner or operator complies with all applicable requirements in paragraphs(d)and(e)of this section, at a hazardous waste management unit or facility, or within 90 days after approval of the closure plan, whichever is later, the owner or operator must treat, remove from the unit or facility, or dispose of on-site, all hazardous wastes in accordance with the approved closure plan.The Regional Administrator may approve a longer period if the owner or . operator demonstrates that: (1)(i)The activities required to comply with this paragraph will, of necessity,take longer than 90 days to complete; or - (ii)(A)The hazardous waste management unit or facility has the capacity to receive additional hazardous wastes, or has the capacity to receive non-hazardous wastes if the facility owner or operator complies with paragraphs (d) and (e) of this section; and (B)There is a reasonable likelihood that he or another person will recommence operation of the hazardous waste management unit or the facility within one year; and (C) Closure of the hazardous waste management unit or facility would be incompatible with continued operation of the site; and (2)He has taken and will continue to take all steps to prevent threats to human health and the • environment, including compliance with all applicable interim status requirements. (b)The owner or operator must complete partial and final closure activities in accordance with the _j approved closure plan and within 180 days after receiving the final volume of hazardous wastes, or the final volume of nonhazardous wastes if the owner or operator complies with all applicable requirements in paragraphs(d)and(e)of this section, at the hazardous waste management unit or facility, or 180 days after approval of the closure plan, if that is later.The Regional Administrator may approve an extenstion to the closure period if the owner or operator demonstrates that: (1)(i)The partial or final closure activities will, of necessity, take longer than 180 days to s complete; or (ii)(A)The hazardous waste management unit or facility has the capacity to receive additional hazardous wastes, or has the capacity to receive non-hazardous wastes if the facility owner or { operator complies with paragraphs (d)and (e) of this section; and (B)There is reasonable likelihood that he or another person will recommence operation of the hazardous waste management unit or the facility within one year; and (C)Closure of the hazardous waste management unit or facility would be incompatible with continued operation of the site; and (2) He has taken and will continue to take all steps to prevent threats to human health and the environment from the unclosed but not operating hazardous waste management unit or facility, including compliance with all applicable interim status requirements. (c)The demonstrations referred to in paragraphs(a)(1)and(b)(1) of this section must be made as follows: (1)The demonstrations in paragraph (a)(1)of this section must be made at least 30 days prior to the expiration of the 90-day period in paragraph (a) of this section; and (2)The demonstration in paragraph(b)(1)of this section must be made at least 30 days prior to the expiration of the 180-day period in paragraph (b)of this section, unless the owner or operator is otherwise subject to the deadlines in paragraph(d)of this section. (d)The Regional Administrator may allow an owner or operator to receive non-hazardous wastes in a landfill, land treatment, or surface impoundment unit after the final receipt of hazardous wastes at that unit if: (1)The owner or operator submits an amended part B application, or a part B application, if not previously required, and demonstrates that: • (i)The unit has the existing design capacity as indicated on the part A application to receive non- hazardous wastes; and (ii)There is a reasonable likelihood that the owner or operator or another person will receive non- hazardous wastes in the unit within one year after the final receipt of hazardous wastes; and (iii)The non-hazardous wastes will not be incompatible with any remaining wastes in the unit or with the facility design and operating requirements of the unit or facility under this part; and (iv) Closure of the hazardous waste management unit would be incompatible with continued operation of the unit or facility; and (v)The owner or operator is operating and will continue to operate in compliance with all applicable interim status requirements; and (2)The part B application includes an amended waste analysis plan, ground-water monitoring and response program, human exposure assessment required under RCRA section 3019, and closure and post-closure plans, and updated cost estimates and demonstrations of financial • assurance for closure and post-closure care as necessary and appropriate to reflect any changes due to the presence of hazardous constituents in the non-hazardous wastes, and changes in I. I • • closure activities, including the expected year of closure if applicable under§265.112(b)(7), as a result of the receipt of non-hazardous wastes following the final receipt of hazardous wastes; and (3)The part B application is amended, as necessary and appropriate, to account for the receipt of non-hazardous wastes following receipt of the final volume of hazardous wastes; and (4)The part B application and the demonstrations referred to in paragraphs(d)(1)and (d)(2) of this section are submitted to the Regional Administrator no later than 180 days prior to the date on which the owner or operator of the facility receives the known final volume of hazardous wastes, or no later than 90 days after the effective date of this rule in the state in which the unit is located, whichever is later. (e) In addition to the requirements in paragraph (d) of this section, an owner or operator of a hazardous waste surface impoundment that is not in compliance with the liner and leachate collection system requirements in 42 U.S.C. 3004(o)(1) and 3005(j)(1) or 42 U.S.C. 3004(0)(2)or { (3) or 3005(j) (2), (3), (4)or(13)must: (1) Submit with the part B application: (i)A contingent corrective measures plan; and (ii)A plan for removing hazardous wastes in compliance with paragraph (e)(2) of this section; and (2) Remove all hazardous wastes from the unit by removing all hazardous liquids and removing all hazardous sludges to the extent practicable without impairing the integrity of the liner(s), if any. (3) Removal of hazardous wastes must be completed no later than 90 days after the final receipt of hazardous wastes. The Regional Administrator may approve an extension to this deadline if I the owner or operator demonstrates that the removal of hazardous wastes will, of necessity, take longer than the allotted period to complete and that an extension will not pose a threat to human health and the environment. (4) If a release that is a statistically significant increase(or decrease in the case of pH)in hazardous oonstituents over background levels is detected in accordance with the requirements in subpart F of this part, the owner or operator of the unit: (i)Must implement corrective measures in accordance with the approved contingent corrective measures plan required by paragraph (e)(1)of this section no later than one year after detection of the release, or approval of the contingent corrective measures plan, whichever is later; (ii) May receive wastes at the unit following detection of the release only if the approved corrective measures plan includes a demonstration that continued receipt of wastes will not impede corrective action; and (iii)May be required by the Regional Administrator to implement corrective measures in less than 1 one year or to cease receipt of wastes until corrective measures have been implemented if necessary to prdtect human health and the environment. (5) During the period of corrective action, the owner or operator shall provide semi-annual reports to the Regional Administrator that describe the progress of the corrective action program, compile all ground-water monitoring data, and evaluate the effect of the continued receipt of non- hazardous wastes on the effectiveness of the corrective action. (6)The Regional Administrator may require the owner or operator to commence closure of the - unit if the owner or operator fails to implement corrective action measures in accordance with the approved contingent corrective measures plan within one year as required in paragraph(e)(4)of this section, or fails to make substantial progress in implementing corrective action and achieving the facility's background levels. (7) If the owner or operator fails to implement corrective measures as required in paragraph (e)(4) of this section, or if the Regional Administrator determines that substantial progress has not been made pursuant to paragraph (e)(6)of this section he shall: (i) Notify the owner or operator in writing that the owner or operator must begin closure in accordance with the deadline in paragraphs(a) and(b)of this section and provide a detailed statement of reasons for this determination, and (ii) Provide the owner or operator and the public, through a newspaper notice, the opportunity to submit written comments on the decision no later than 20 days after the date of the notice. (iii) If the Regional Administrator receives no written comments, the decision will become final five days after the close of the comment period. The Regional Administrator will notify the owner or operator that the decision is final, and that a revised closure plan, if necessary, must be submitted � 1 within 15 days of the final notice and that closure must begin in accordance with the deadlines in paragraphs(a)and(b)of this section. (iv) If the Regional Administrator receives written comments on the decision, he shall make a final decision within 30 days after the end of the comment period, and provide the owner or operator in writing and the public through a newspaper notice, a detailed statement of reasons for the final decision. If the Regional Administrator determines that substantial progress has not been made, closure must be initiated in accordance with the deadlines in paragraphs (a) and(b) of this section. (v)The final determinations made by the Regional Administrator under paragraphs (e)(7) (iii)and (iv)of this section are not subject to administrative appeal. [51 FR 16451, May 2, 1986, as amended at 54 FR 33396, Aug. 14, 1989; 56 FR 42512, Aug. 27, 1991] § 265.114 Disposal or decontamination of equipment, structures and soils. • During the partial and final closure periods, all contaminated equipment, structures and soil must be properly disposed of, or decontaminated unless specified otherwise in §§265.197, 265.228, 265.258,265.280, or 265.310. By removing all hazardous wastes or hazardous constituents during partial and final closure, the owner or operator may become a generator of hazardous waste and must handle that hazardous waste in accordance with all applicable requirements of part 262 of this chapter. [51 FR 16451, May 2, 1986, as amended at 53 FR 34086, Sept. 2, 1988] §265.115 Certification of closure. Within 60 days of completion of closure of each hazardous waste surface impoundment, waste pile, land treatment, and landfill unit, and within 60 days of completion of final closure, the owner or operator must submit to the Regional Administrator, by registered mail, a certification that the hazardous waste management unit or facility, as applicable, has been closed in accordance with the specifications in the approved closure plan. The certification must be signed by the owner or operator and by an independent registered professional engineer. Documentation supporting the independent registered professional engineer's certification must be furnished to the Regional Administrator upon request until he releases the owner or operator from the financial assurance requirements for closure under§265.143(h). §265.116 Survey plat. 1 No later than the submission of the certification of closure of each hazardous waste disposal unit, an owner or operator must submit to the local zoning authority, or the authority with jurisdiction over local land use, and to the Regional Administrator, a survey plat indicating the location and • dimensions of landfill cells or other hazardous waste disposal units with respect to permanently surveyed benchmarks. This plat must be prepared and certified by a professional land surveyor. The plat filed with the local zoning authority, or the authority with jurisdiction over local land use must contain a note, prominently displayed,which states the owner's or operator's obligation to restrict disturbance of the hazardous waste disposal unit in accordance with the applicable subpart G regulations. §265.117 Post-closure care and use of property. (a)(1) Post-closure care for each hazardous waste management unit subject to the requirements of§§265.117 through 265.120 must begin after completion of closure of the unit and continue for 30 years after that date. It must consist of at least the following: (i)Monitoring and reporting in accordance with the requirements of subparts F, K, L, M, and N of this part; and (ii)Maintenance and monitoring of waste containment systems in accordance with the requirements of subparts F, K, L, M, and N of this part. (2)Any time preceding closure of a hazardous waste management unit subject to post-closure care requirements or final closure, or any time during the post-closure period for a particular hazardous waste disposal unit, the Regional Administrator may: (i)Shorten the post-closure care period applicable to the hazardous waste management unit, or facility, if all disposal units have been closed, if he finds that the reduced period is sufficient to protect human health and the environment(e.g., leachate or ground-water monitoring results, characteristics of the hazardous waste, application of advanced technology, or alternative disposal, treatment, or re-use techniques indicate that the hazardous waste management unit or facility is secure); or (ii) Extend the post-closure care period applicable to the hazardous waste management unit or facility, if he finds that the extended period is necessary to protect human health and the environment(e.g., leachate or ground-water monitoring results indicate a potential for migration of hazardous wastes at levels which may be harmful to human health and the environment). (b)The Regional Administator may require, at partial and final closure, continuation of any of the security requirements of§265.14 during part or all of the post-closure period when: • i (1) Hazardous wastes may remain exposed after completion of partial or final closure; or (2)Access by the public or domestic livestock may pose a hazard to human health. • (c) Post-closure use of property on or in which hazardous wastes remain after partial or final closure must never be allowed to disturb the integrity of the final cover, liner(s), or any other components of the containment system, or the function of the facility's monitoring systems, unless the Regional Administrator finds that the disturbance: (1) Is necessary to the proposed use of the property, and will not increase the potential hazard to human health or the environment; or (2) Is necessary to reduce a threat to human health or the environment. (d)All post-closure care activities must be in accordance with the provisions of the approved post-closure plan as specified in §265.118. §265.118 Post-closure plan; amendment of plan. . (a) Written plan. By May 19, 1981, the owner or operator of a hazardous waste disposal unit must have a written post-closure plan. An owner or operator of a surface impoundment or waste pile that intends to remove all hazardous wastes at closure must prepare a post-closure plan and submit it to the Regional Administrator within 90 days of the date that the owner or operator or Regional Administrator determines that the hazardous waste management unit or facility must be closed as a landfill, subject to the requirements of§§265.117 through 265.120. (b) Until final closure of the facility, a copy of the most current post-closure plan must be furnished to the Regional Administrator upon request, including request by mail. In addition, for facilities without approved post-closure plans, it must also be provided during site inspections, on the day of inspection, to any officer, employee or representative of the Agency who is duly designated by the Administrator. After final closure has been certified, the person or office specified in §265.118(c)(3) must keep the approved post-closure plan during the post-closure period. (c) For each hazardous waste management unit subject to the requirements of this section, the post-closure plan must identify the activities that will be carried on after closure of each disposal • unit and the frequency of these activities, and include at least: (1)A description of the planned monitoring activities and frequencies at which they will be • performed to comply with subparts F, K, L, M, and N of this part during the post-closure care period; and (2)A description of the planned maintenance activities, and frequencies at which they will be performed, to ensure: —� (i)The integrity of the cap and final cover or other containment systems in accordance with the requirements of subparts K, L, M, and N of this part; and (ii)The function of the monitoring equipment in accordance with the requirements of subparts F, K, L, M, and N of this part; and (3)The name, address, and phone number of the person or office to contact about the hazardous waste disposal unit or facility during the post-closure care period. (4) For facilities subject to§265.121, provisions that satisfy the requirements of§265.121(a)(1) and (3). . (5) For facilities where the Regional Administrator has applied alternative requirements at a regulated unit under§§265.90(f), 265.110(d), and/or 265.140(d), either the alternative 1-1 ,�j • requirements that apply to the regulated unit, or a reference to the enforceable document containing those requirements. (d)Amendment of plan. The owner or operator may amend the post-closure plan any time during the active life of the facility or during the post-closure care period. An owner or operator with an approved post-closure plan must submit a written request to the Regional Administrator to authorize a change to the approved plan. The written request must include a copy of the amended post-closure plan for approval by the Regional Administrator. (1)The owner or operator must amend the post-closure plan whenever: (i) Changes in operating plans or facility design affect the post-closure plan, or (ii) Events which occur during the active life of the facility, including partial and final closures, affect the post-closure plan. (iii)The owner or operator requests the Regional Administrator to apply alternative requirements to a regulated unit under§§265.90(f), 265.110(d), and/or 265.140(d). (2)The owner or operator must amend the post-closure plan at least 60 days prior to the proposed change in facility design or operation, or no later than 60 days after an unexpected event has occurred which has affected the post-closure plan. (3)An owner or operator with an approved post-closure plan must submit the modified plan to the Regional Administrator at least 60 days prior to the proposed change in facility design or operation, or no more than 60 days after an unexpected event has occurred which has affected the post-closure plan. If an owner or operator of a surface impoundment or a waste pile who intended to remove all hazardous wastes at closure in accordance with§265.228(b) or §265.258(a) is required to close as a landfill in accordance with §265.310,the owner or operator must submit a post-closure plan within 90 days of the determination by the owner or operator or Regional Administrator that the unit must be closed as a landfill. If the amendment to the post- closure plan is a Class 2 or 3 modification according to the criteria in§270.42,the modification to the plan will be approved according to the procedures in§265.118(f). (4)The Regional Administrator may request modifications to the plan under the conditions described in paragraph(d)(1)of this section. An owner or operator with an approved post-closure plan must submit the modified plan no later than 60 days of the request from the Regional Administrator. If the amendment to the plan is considered a Class 2 or 3 modification according to the criteria in §270.42,the modifications to the post-closure plan will be approved in accordance with the procedures in§265.118(f). If the Regional Administrator determines that an owner or operator of a surface impoundment or waste pile who intended to remove all hazardous wastes at closure must close the facility as a landfill, the owner or operator must submit a post-closure plan for approval to the Regional Administrator within 90 days of the determination. (e)The owner or operator of a facility with hazardous waste management units subject to these requirements must submit his post-closure plan to the Regional Administrator at least 180 days before the date he expects to begin partial or final closure of the first hazardous waste disposal j _ __unit. The date he"expects to begin closure"of the first hazardous waste disposal unit must be _,—_. _ _ either within 30 days after the date on which the hazardous waste management unit receives the known final volume of hazardous waste or, if there is a reasonable possibility that the hazardous waste management unit will receive additional hazardous wastes, no later than one year after the - date on which the unit received the most recent volume of hazardous wastes. The owner or operator must submit the post-closure plan to the Regional Administrator no later than 15 days after: _J (1)Termination of interim status(except when a permit is issued to the facility simultaneously with termination of interim status); or (2) Issuance of a judicial decree or final orders under section 3008 of RCRA to cease receiving wastes or close. (f)The Regional Administrator will provide the owner or operator and the public, through a newspaper notice, the opportunity to submit written comments on the post-closure plan and request modifications to the plan no later than 30 days from the date of the notice, He will also, in response to a request or at his own discretion, hold a public hearing whenever such a hearing might clarify one or more issues concerning a post-closure plan. The Regional Administrator will i give public notice of the hearing at least 30 days before it occurs. (Public notice of the hearing J may be given at the same time as notice of the opportunity for the public to submit written ' ' comments, and the two notices may be combined.)The Regional Administrator will approve, modify, or disapprove the plan within 90 days of its receipt. If the Regional Administrator does not approve the plan he shall provide the owner or operator with a detailed written statement of reasons for the refusal and the owner or operator must modify the plan or submit a new plan for approval within 30 days after receiving such written statement. The Regional Administrator will approve or modify this plan in writing within 60 days. If the Regional Administrator modifies the plan, this modified plan becomes the approved post-closure plan. The Regional Administrator must ensure that the approved post-closure plan is consistent with§§265.117 through 265.120. A copy of the modified plan with a detailed statement of reasons for the modifications must be mailed to the owner or operator. (g)The post-closure plan and length of the post-closure care period may be modified any time prior to the end of the post-closure care period in either of the following two ways: (1)The owner or operator or any member of the public may petition the Regional Administrator to extend or reduce the post-closure care period applicable to a hazardous waste management unit or facility based on cause, or alter the requirements of the post-closure care period based on cause. (i)The petition must include evidence demonstrating that: (A)The secure nature of the hazardous waste management unit or facility makes the post-closure care requirement(s)unnecessary or supports reduction of the post-closure care period specified in the current post-closure plan (e.g., leachate or ground-water monitoring results, characteristics of the wastes, application of advanced technology, or alternative disposal,treatment, or re-use techniques indicate that the facility is secure), or (B)The requested extension in the post-closure care period or alteration of post-closure care requirements is necessary to prevent threats to human health and the environment(e.g., leachate or ground-water monitoring results indicate a potential for migration of hazardous wastes at levels which may be harmful to human health and the environment). (ii)These petitions will be considered by the Regional Administrator only when they present new and relevant information not previously considered by the Regional Administrator.Whenever the Regional Administrator is considering a petition, he will provide the owner or operator and the public, through a newspaper notice, the opportunity to submit written comments within 30 days of the date of the notice. He will also, in response to a request or at his own discretion, hold a public hearing whenever a hearing might clarify one or more issues concerning the post-closure plan. The Regional Administrator will give the public notice of the hearing at least 30 days before it occurs. (Public notice of the hearing may be given at the same time as notice of the opportunity for written public comments, and the two notices may be combined.)After considering the comments, he will issue a final determination, based upon the criteria set forth in paragraph (g)(1) of this section. (iii) If the Regional Administrator denies the petition, he will send the petitioner a brief written ! _ response giving a reason for the denial. _ _ __—._. __ (2)The Regional Administrator may tentatively decide to modify the post-closure plan if he deems it necessary to prevent threats to human health and the environment. He may propose to extend or reduce the post-closure care period applicable to a hazardous waste management unit or facility based on cause or alter the requirements of the post-closure care period based on cause. (i)The Regional Administrator will provide the owner or operator and the affected public, through a newspaper notice, the opportunity to submit written comments within 30 days of the date of the notice and the opportunity for a public hearing as in paragraph(g)(1)(ii)of this section. After considering the comments, he will issue a final determination. • (ii)The Regional Administrator will base his final determination upon the same criteria as required for petitions under paragraph (g)(1)(i)of this section. A modification of the post-closure plan may include,where appropriate, the temporary suspension rather than permanent deletion of one or more post-closure care requirements. At the end of the specified period of suspension, the Regional Administrator would then determine whether the requirement(s)should be permanently discontinued or reinstated to prevent threats to human health and the environment. • • [51 FR 16451, May 2, 1986, as amended at 53 FR 37935, Sept. 28, 1988; 63 FR 56734, Oct. 22, 1 1998] • §265.118 Post-closure plan; amendment of plan. • (a) Written plan. By May 19, 1981, the owner or operator of a hazardous waste disposal unit must have a written post-closure plan. An owner or operator of a surface impoundment or waste pile that intends to remove all hazardous wastes at closure must prepare a post-closure plan and submit it to the Regional Administrator within 90 days of the date that the owner or operator or Regional Administrator determines that the hazardous waste management unit or facility must be closed as a landfill, subject to the requirements of§§265.117 through 265.120. (b) Until final closure of the facility, a copy of the most current post-closure plan must be furnished to the Regional Administrator upon request, including request by mail. In addition, for facilities without approved post-closure plans, it must also be provided during site inspections, on the day of inspection, to any officer, employee or representative of the Agency who is duly designated by the Administrator. After final closure has been certified, the person or office specified in §265.118(c)(3) must keep the approved post-closure plan during the post-closure period. (c) For each hazardous waste management unit subject to the requirements of this section, the post-closure plan must identify the activities that will be carried on after closure of each disposal unit and the frequency of these activities, and include at least: (1)A description of the planned monitoring activities and frequencies at which they will be ' performed to comply with subparts F, K, L, M, and N of this part during the post-closure care period; and (2)A description of the planned maintenance activities, and frequencies at which they will be .performed, to ensure: (i)The integrity of the cap and final cover or other containment systems in accordance with the requirements of subparts K, L, M, and N of this part; and ', (ii)The function of the monitoring equipment in accordance with the requirements of subparts F, K, L, M, and N of this part; and (3)The name, address, and phone number of the person or office to contact about the hazardous waste disposal unit or facility during the post-closure care period. (4) For facilities subject to§265.121, provisions that satisfy the requirements of§265.121(a)(1) and (3). (5) For facilities where the Regional Administrator has applied alternative requirements at a regulated unit under§§265.90(f), 265.110(d), and/or 265.140(d), either the alternative requirements that apply to the regulated unit, or a reference to the enforceable document containing those requirements. (d)Amendment of plan. The owner or operator may amend the post-closure plan any time during the active life of the facility or during the post-closure care period. An owner or operator with an approved post-closure plan must submit a written request to the Regional Administrator to authorize a change to the approved plan.The written request must include a copy of the —� amended post-closure plan for approval by the Regional Administrator. (1)The owner or operator must amend the post-closure plan whenever: (i) Changes in operating plans or facility design affect the post-closure plan,or (ii) Events which occur during the active life of the facility, including partial and final closures, J affect the post-closure plan. (iii)The owner or operator requests the Regional Administrator to apply alternative requirements to a regulated unit under§§265.90(f), 265.110(d), and/or 265.140(d). (2)The owner or operator must amend the post-closure plan at least 60 days prior to the proposed change in facility design or operation, or no later than 60 days after an unexpected event has occurred which has affected the post-closure plan. (3)An owner or operator with an approved post-closure plan must submit the modified plan to the `j Regional Administrator at least 60 days prior to the proposed change in facility design or operation, or no more than 60 days after an unexpected event has occurred which has affected ; the post-closure plan. If an owner or operator of a surface impoundment or a waste pile who intended to remove all hazardous wastes at closure in accordance with§265.228(b)or -' §265.258(a) is required to close as a landfill in accordance with§265.310,the owner or operator must submit a post-closure plan within 90 days of the determination by the owner or operator or Regional Administrator that the unit must be closed as a landfill. If the amendment to the post- . closure plan is a Class 2 or 3 modification according to the criteria in §270.42, the modification to the plan will be approved according to the procedures in§265.118(f). (4)The Regional Administrator may request modifications to the plan under the conditions described in paragraph (d)(1)of this section. An owner or operator with an approved post-closure plan must submit the modified plan no later than 60 days of the request from the Regional Administrator. If the amendment to the plan is considered a Class 2 or 3 modification according to the criteria in §270.42, the modifications to the post-closure plan will be approved in accordance with the procedures in§265.118(f). If the Regional Administrator determines that an owner or operator of a surface impoundment or waste pile who intended to remove all hazardous wastes at closure must close the facility as a landfill, the owner or operator must submit a post-closure plan for approval to the Regional Administrator within 90 days of the determination. (e)The owner or operator of a facility with hazardous waste management units subject to these requirements must submit his post-closure plan to the Regional Administrator at least 180 days 1 before the date he expects to begin partial or final closure of the first hazardous waste disposal unit. The date he"expects to begin closure"of the first hazardous waste disposal unit must be either within 30 days after the date on which the hazardous waste management unit receives the 1 known final volume of hazardous waste or, if there is a reasonable possibility that the hazardous waste management unit will receive additional hazardous wastes, no later than one year after the date on which the unit received the most recent volume of hazardous wastes. The owner or 1 operator must submit the post-closure plan to the Regional Administrator no later than 15 days J after: (1)Termination of interim status(except when a permit is issued to the facility simultaneously with termination of interim status); or j (2) Issuance of a judicial decree or final orders under section 3008 of RCRA to cease receiving wastes or close. (f)The Regional Administrator will provide the owner or operator and the public, through a newspaper notice, the opportunity to submit written comments on the post-closure plan and �� request modifications to the plan no later than 30 days from the date of the notice. He will also, in response to a request or at his own discretion, hold a public hearing whenever such a hearing might clarify one or more issues concerning a post-closure plan.The Regional Administrator will give public notice of the hearing at least 30 days before it occurs. (Public notice of the hearing may be given at the same time as notice of the opportunity for the public to submit written comments, and the two notices may be combined.)The Regional Administrator will approve, modify, or disapprove the plan within 90 days of its receipt. If the Regional Administrator does not approve the plan he shall provide the owner or operator with a detailed written statement of reasons for the refusal and the owner or operator must modify the plan or submit a new plan for approval within 30 days after receiving such written statement. The Regional Administrator will approve or modify this plan in writing within 60 days. If the Regional Administrator modifies the plan, this modified plan becomes the approved post-closure plan. The Regional Administrator must ensure that the approved post-closure plan is consistent with§§265.117 through 265.120. A • copy of the modified plan with a detailed statement of reasons for the modifications must be mailed to the owner or operator. (g)The post-closure plan and length of the post-closure care period may be modified any time prior to the end of the post-closure care period in either of the following two ways: ' I (1)The owner or operator or any member of the public may petition the Regional Administrator to ...J extend or reduce the post-closure care period applicable to a hazardous waste management unit or facility based on cause, or alter the requirements of the post-closure care period based on cause. J (i)The petition must include evidence demonstrating that: (A)The secure nature of the hazardous waste management unit or facility makes the post-closure care requirement(s) unnecessary or supports reduction of the post-closure care period specified in the current post-closure plan (e.g., leachate or ground-water monitoring results, characteristics of the wastes, application of advanced technology, or alternative disposal,treatment, or re-use techniques indicate that the facility is secure), or (B)The requested extension in the post-closure care period or alteration of post-closure care requirements is necessary to prevent threats to human health and the environment(e.g., leachate • 1 or ground-water monitoring results indicate a potential for migration of hazardous wastes at levels which may be harmful to human health and the environment). (ii)These petitions will be considered by the Regional Administrator only when they present new and relevant information not previously considered by the Regional Administrator. Whenever the Regional Administrator is considering a petition, he will provide the owner or operator and the public,through a newspaper notice, the opportunity to submit written comments within 30 days of the date of the notice. He will also, in response to a request or at his own discretion, hold a public hearing whenever a hearing might clarify one or more issues concerning the post-closure plan. The Regional Administrator will give the public notice of the hearing at least 30 days before it occurs. (Public notice of the hearing may be given at the same time as notice of the opportunity for written public comments, and the two notices may be combined.)After considering the comments, he will issue a final determination, based upon the criteria set forth in paragraph (g)(1) of this section. (iii) If the Regional Administrator denies the petition, he will send the petitioner a brief written response giving a reason for the denial. (2)The Regional Administrator may tentatively decide to modify the post-closure plan if he deems it necessary to prevent threats to human health and the environment. He may propose to extend or reduce the post-closure care period applicable to a hazardous waste management unit or facility based on cause or alter the requirements of the post-closure care period based on cause. 1 (i)The Regional Administrator will provide the owner or operator and the affected public, through J a newspaper notice, the opportunity to submit written comments within 30 days of the date of the notice and the opportunity for a public hearing as in paragraph(g)(1)(ii)of this section. After considering the comments, he will issue a final determination. (ii)The Regional Administrator will base his final determination upon the same criteria as required J for petitions under paragraph(g)(1)(i)of this section. A modification of the post-closure plan may include, where appropriate, the temporary suspension rather than permanent deletion of one or more post-closure care requirements. At the end of the specified period of suspension, the Regional Administrator would then determine whether the requirement(s) should be permanently discontinued or reinstated to prevent threats to human health and the environment. [51 FR 16451, May 2, 1986, as amended at 53 FR 37935, Sept. 28, 1988;63 FR 56734, Oct. 22, 1998] §265.119 Post-closure notices. I (a) No later than 60 days after certification of closure of each hazardous waste disposal unit, the owner or operator must submit to the local zoning authority, or the authority with jurisdiction over —' local land use, and to the Regional Administrator, a record of the type, location, and quantity of hazardous wastes disposed of within each cell or other disposal unit of the facility. For hazardous r. wastes disposed of before January 12, 1981, the owner or operator must identify the type, location and quantity of the hazardous wastes to the best of his knowledge and in accordance with any records he has kept. (b)Within 60 days of certification of closure of the first hazardous waste disposal unit and within 60 days of certification of closure of the last hazardous waste disposal unit, the owner or operator J must: (1) Record, in accordance with State law, a notation on the deed to the facility property—or on some other instrument which is normally examined during title search—that will in perpetuity notify any potential purchaser of the property that: (i)The land has been used to manage hazardous wastes; and (ii) Its use is restricted under 40 CFR subpart G regulations; and (iii)The survey plat and record of the type, location, and quantity of hazardous wastes disposed of within each cell or other hazardous waste disposal unit of the facility required by§§265.116 and 265.119(a)have been filed with the local zoning authority or the authority with jurisdiction over local land use and with the Regional Administrator; and (2) Submit a certification signed by the owner or operator that he has recorded the notation specified in paragraph(b)(1)of this section and a copy of the document in which the notation has been placed, to the Regional Administrator. 1.7r� 1 (c) If the owner or operator or any subsequent owner of the land upon which a hazardous waste disposal unit was located wishes to remove hazardous wastes and hazardous waste residues, the liner, if any, and all contaminated structures, equipment, and soils, he must request a modification to the approved post-closure plan in accordance with the requirements of §265.118(g).The owner or operator must demonstrate that the removal of hazardous wastes will satisfy the criteria of§265.117(c). By removing hazardous waste, the owner or operator may become a generator of hazardous waste and must manage it in accordance with all applicable requirements of this chapter. If the owner or operator is granted approval to conduct the removal activities, the owner or operator may request that the Regional Administrator approve either: (1)The removal of the notation on the deed to the facility property or other instrument normally examined during title search, or (2)The addition of a notation to the deed or instrument indicating the removal of the hazardous waste. §265.120 Certification of completion of post-closure care. No later than 60 days after the completion of the established post-closure care period for each hazardous waste disposal unit, the owner or operator must submit to the Regional Administrator, by registered mail, a certification that the post-closure care period for the hazardous waste disposal unit was performed in accordance with the specifications in the approved post-closure plan. The certification must be signed by the owner or operator and an independent registered professional engineer. Documentation supporting the independent registered professional engineer's certification must be furnished to the Regional Administrator upon request until he . releases the owner or operator from the financial assurance requirements for post-closure care under§265.145(h). §265.121 Post-closure requirements for facilities that obtain enforceable documents in lieu of post-closure permits. } (a) Owners and operators who are subject to the requirement to obtain a post-closure permit under 40 CFR 270.1(c), but who obtain enforceable documents in lieu of post-closure permits, as provided under 40 CFR 270.1(c)(7), must comply with the following requirements: (1)The requirements to submit information about the facility in 40 CFR 270.28; (2)The requirements for facility-wide corrective action in§264.101 of this chapter, (3)The requirements of 40 CFR 264.91 through 264.100. (b)(1)The Regional Administrator, in issuing enforceable documents under§265.121 in lieu of permits, will assure a meaningful opportunity for public involvement which, at a minimum, includes public notice and opportunity for public comment: (i)When the Agency becomes involved in a remediation at the facility as a regulatory or enforcement matter; J (ii) On the proposed preferred remedy and the assumptions upon which the remedy is based, in particular those related to land use and site characterization; and (iii)At the time of a proposed decision that remedial action is complete at the facility. These requirements must be met before the Regional Administrator may consider that the facility has met the requirements of 40 CFR 270.1(c)(7), unless the facility qualifies for a modification to these public involvement procedures under paragraph (b)(2)or(3)of this section. (2) If the Regional Administrator determines that even a short delay in the implementation of a remedy would adversely affect human health or the environment, the Regional Administrator may delay compliance with the requirements of paragraph(b)(1)of this section and implement the remedy immediately. However, the Regional Administrator must assure involvement of the public at the earliest opportunity, and, in all cases, upon making the decision that additional remedial action is not needed at the facility. (3)The Regional Administrator may allow a remediation initiated prior to October 22, 1998 to substitute for corrective action required under a post-closure permit even if the public involvement requirements of paragraph (b)(1) of this section have not been met so long as the Regional . Administrator assures that notice and comment on the decision that no further remediation is necessary to protect human health and the environment takes place at the earliest reasonable opportunity after October 22, 1998. 1 [63 FR 56734, Oct. 22, 1998] • • • �� • • • • • • i i a . I L_ y i • j . .— i =,N r .a;•rrf-....e.r..n..ti..aw.rwrrw...r n, rw. ,,.........0 f _ Tr. ++.oil., ,.. ._,^ unw..�..u......ew ...�..m r.�. ..�..r�...... ,-...e�w. ,w ....ie{...nr-o-..'^......1...Y+a+ri.w.M..^T . . +rww.."...a. I . • ATTACHMENT F i. . . . L. .. �..�.� _ , I ,.....i • J MICHAEL C. HOUSTON, P. E. 609 Willow Avenue, #3W Council Bluffs, Iowa 51501 712-323-3498 E-mail: Mchoustonpe@aol.com INTRODUCTION: An experienced chemical engineer whose strong technical background and extensive experience have enabled completion of extremely difficult projects and the solving of complex problems. Experienced trouble- shooter. Excellent oral and written communication skills. - PROFESSIONAL EXPERIENCE HIGHLIGHTS: Houston Engineering, Council Bluffs, Iowa, 8/91 to present Owner and operator consulting engineering business - Determined process source of excessive particulate emissions from manufacturing stacks. - Performed air quality Risk Management Program and compliance audit work for facilities with ammonia and propane. - Trained crew of 5 and managed week-long air emissions testing of 6 Offutt Air Force Base incinerator stacks. - Helped Nucor Steel foundry prepare expansion air permit application. - Reviewed Water Reuse Project design for Minnesota Corn Processors, Columbus, NE. - Supervised installation of ozone drinking water systems for Lincoln, NE and Portland, ME. - Wrote operating procedures for ozone systems and trained personnel. - Designed equipment and supervised fabrication of system for obtaining gold, platinum and other metals from U.S. desert sediments. Wilson &Company, Salina, Kansas, 3/90 to 8/91 { Process Group Supervisor Li - Predicted off-site groundwater contamination for Learjet production facilities. - Designed biological wastewater treatment system for farm equipment manufacturer. - Provided groundwater contamination and hazardous waste recommendations for former Mobil Oil refinery. - Assessed environmental liabilities of Georgia wood pole treating plant. HWS Consulting Group, Inc., Lincoln, Nebraska, 3/89 to 2/90 Project Manager - Inspected 15 Union Pacific Railroad refueling locations and prepared spill control plans. - Handled US West UST removal projects. - Prepared Adams, Nebraska drinking water nitrate removal system preliminary design. MCH Engineering, Inc., Omaha, Nebraska, 7/83 to 3/89 Owner and operator consulting engineering business - Wastewater treatment study and design for large Motorola electronics facility. - Prepared successful RCRA Part B application including preliminary design for new hazardous waste treatment facility. (continued) Michael C. Houston, P.E. - Page 2 MCH Engineering, Inc. (cant.) - Designed innovative wastewater treatment system modification for Behlen Mfg. - Prepared industrial wastewater pretreatment program and identified sources of problem discharges for City of Sioux City, Iowa. - Identified source of odor emissions for downtown area Omaha chemicals manufacturer. HDR Engineering, Inc., Omaha, Nebraska, 9/81 to 7/83 j Senior Chemical Engineer . I - Identified hazardous chemical contamination source within Chicago area chemicals plant. Planned and managed the cleanup. - Performed planning and site supervision for RCRA closure of large Digital Equipment Corporation electroplating operation in Phoenix. - Helped prepare water and wastewater management study for new Motorola semiconductor • manufacturing facility with ultrapure water requirements. Control Data Corporation, Omaha, Nebraska, 7/77 to 9/81 Senior Chemical Engineer - Developed flexible disk production capability. - Coordinated procurement and transfer of hard disk manufacturing equipment to Wales, U.K plant. Stanley Consultants, Inc., Muscatine, Iowa, 4/74 to 7/77 Senior Chemical Engineer - Designed facilities for Monsanto textiles plant to use No. 6 fuel oil for large process heaters which included new burners, piping design, construction support and startup. - Designed ion exchange systems for power plant boiler feed water and condensate polishing. 3M Company, St. Paul, Minnesota, 6/62 to 3R4 Senior Chemical Engineer - Production process engineer for copying paper, printing and other chemicals. - Troubleshooter and trainer for chemical reactor temperature control systems. - Technical writer of operating procedures for chemicals production including safety and specifications. - Handled startup of new product line and plant. EDUCATION: Chemical Engineering, Bachelor of Science, 1962 Iowa State University,Ames, Iowa tI MICHAEL C. HOUSTON, P. E. ENGINEERING EXPERIENCE GENERAL - Union Pacific Railroad Company, Omaha, Nebraska: Prepared Spill Prevention Control and Countermeasure (SPCC) plans for yards from Nebraska and Iowa to Louisiana and Texas; all fueling, lubrication, and maintenance operations were covered including underground storage tanks. - US West, Inc., Des Moines, Iowa: Managed underground storage tank(UST) removal and replacement program in Nebraska; several locations within populated city areas presented unusual circumstances. - Professional Services Group, Inc., Sioux City, Iowa: Sources of discharges causing serious municipal sewage treatment plant foaming and odor problems determined. - Mid-Continent Insurance Company, Great Bend, Kansas: Investigated serious oil field personal injury accident likely caused by fume inhalation. - Harcross Chemicals, Inc., Omaha, Nebraska: Designed secondary containment and run-off treatment for several chemicals loading, unloading, and storage areas. - Fruehauf Trailer Corporation, Omaha, Nebraska: Participated in the site investigation and helped prepare the Phase I environmental site assessment (ESA) report for a 70-acre facility. - Amoco Gas Station, Herington, Kansas: Performed Phase I ESA on a site with underground storage tanks. - Lite Industrial Storage Park, Ltd., Omaha, Nebraska: Performed Phase I ESA for some businesses at the location and for vacant lots for sale. - Pinellas County, Florida: Assisted on design of landfill gas collection and transfer system for two former landfill sites. I HAZARDOUS WASTE MANAGEMENT - A. L. Laboratories, Inc., Chicago, Illinois: Identified unknown wastewater contamination source and extent of contamination; managed soil remedial cleanup of site. Phase II and III ESA procedures used. - Digital Equipment Corporation, Phoenix, Arizona: RCRA closure of a large plating facility; prepared sampling plan and supervised on-site activities. Phase II and III ESA work. - Microterra, Inc., Hilton Head, South Carolina: Performed environmental assessment on former southern Georgia pole treating plant which had used pentachlorophenol and other high toxicity preservatives. Phase I, II and III environmental site assessment activities involved. f1 - ESG Watts, Inc., Rock Island, Illinois: Prepared RCRA Part B application for new hazardous waste treatment facility. - Chrome Locomotive, Inc., Silvis, Illinois: Handled all aspects of RCRA closure including planning, i sampling, remediation, and certification. Phase II and III ESA work. _ - Mobil Oil Corporation, Beaumont, Texas: Provided engineering services pertaining to environmental compliance and remedial activities at their former Augusta, Kansas, refinery. - Century Manufacturing, Inc., Aurora, Nebraska: Handled disposal of contaminated soil and other hazardous wastes. Phase II and III ESA work. - Michael Battery Company, Inc., Davenport, Iowa: Performed remedial investigation, preparation of remedial plan and related work at a former automobile battery rebuilding operation. Phase II and III ESA work. - Industrial Kiln&Dryer, Inc., Council Bluffs, Iowa: Prepared feasibility study including market assessment and budgetary cost estimate for proposed hazardous waste incineration facility. i - Pearson Industries, Inc., Galva, Illinois: RCRA closure of an outdoor paint wastes storage area. Phase II and III ESA work. • AIR QUALITY - Offutt Air Force Base, Bellevue, Nebraska: Managed stack air emissions sampling and testing project for six incinerators. - Nucor Corporation, Norfolk, Nebraska: Prepared air construction permit application for new molten I� steel degasifier. (cont.) i MICHAEL C. HOUSTON, P. E.— Page 2 AIR QUALITY(cont.) - QO Chemicals, Inc., Omaha, Nebraska: Provided specific recommendations for reducing odor emissions for large, downtown chemical production plant. - Motorola, Inc. Kuala Lumpur, Malaysia: Process air scrubbers designed to remove contaminants `-' from high volume production exhaust flows. - Malnove, Inc, Omaha, Nebraska: Assisted with estimate and report on air emissions for printing acility. - Rail Car Nebraska, Inc., Omaha, Nebraska: Provided dust control recommendations. WATER TREATMENT - Emery-Trailigaz Ozone Company, Cincinnati, Ohio: Served as construction and startup engineer for ! drinking water ozone treatment plants for Lincoln, Nebraska and Portland, Maine. - City of Lincoln, Ashland, Nebraska: Prepared operating procedures and provided training for drinking water ozone treatment system. - Motorola, Inc., Price Road Facility, Tempe, Arizona: Water and wastewater management study- recommendations prepared for a new semiconductor production operation using reuse and recycle schemes to reduce water usage and sewer discharges by two-thirds. - Sino-Cad Circuits, Inc. Zhuhai, China: Designed high-purity water and wastewater treatment systems for new printed board manufacturing facility; ion exchange and electro-dialysis reversal (EDR)were used on the water system. 1 - Village of Adams, Nebraska: Completed preliminary design of an ion exchange system for removal of nitrate from drinking water; a successful Community Development Block Grant(CDBG)application was also prepared. - Dairyland Power Cooperative, Alma, Wisconsin: Project engineer for design of power plant demineralizer and condensate polishing systems. WASTEWATER AND GROUNDWATER TREATMENT - Hay& Forage Industries, Hesston, Kansas: Wastewater characterization and treatment system design for farm machinery production facility. - Applied Power Associates, Inc., Omaha, Nebraska: Reviewed wastewater reuse design for Columbus, Nebraska corn processing plant. - Behlen Manufacturing Company, Columbus, Nebraska: Flow characterization, bench-scale treatability and design of innovative, high volume wastewater treatment plant for removal of chrome, zinc, and iron. - Learjet Corporation, Wichita, Kansas: Developed engineering design concepts and construction cost estimates for several proposed environmental projects. Phase II and III environmental assessment work. - Farmland Industires, Inc., Dodge City, Kansas: Preliminary design concepts and construction cost estimate for remedial groundwater and water treatment systems. - Motorola, Inc., Government Electronics Group, Scottsdale,Arizona: Wastewater treatment facility upgrade to improve system capacity and performance. - Motorola, Inc., Kuala Lumpur, Malaysia: Wastewater characterization and treatment facility design for semiconductor manufacturing. - City of McPherson, McPherson, Kansas: Investigated failure of new wastewater sludge storage aeration system and identified problem. - Sino-Cad Circuits, Inc., Zhuhai, China: Design of wastewater collection and treatment facilities for a new printed circuit board plant. - Mobil Oil Corporation, Beaumont, Texas: Provided recommendations on recovered groundwater and hydrocarbon at the former Augusta, Kansas, refinery. - Lockheed Aeronautical Systems Company, Marietta, Georgia: Wastewater study on effects of new NPDES discharge limits. - Professional Services Group, Inc., Sioux City, Iowa: Prepared industrial wastewater pretreatment program for Sioux City covering five municipal jurisdictions. - City of Council Bluffs, Iowa: Prepared city pretreatment program. H j 1. i �' i I - !....-1F 1 4 1 l J ..., - i. 1 1..-i I LÀ , 1"1 i ,Li k= 1 ! I .i . .h " LIMITED PARTNERSHIP AGREEMENT OF KDI OMAHA,L.P. A THIS LIMITED PARTNERSHIP AGREEMENT ( s "Agreement") of ILDI Omaha, L.P. is made and entered into as of fit�`�°�''���2 003 (the "Agreement Date") by and among KD OMAHA 1103, INC., a Nebraska corporation having an address at do Kimco Realty Corporation, 3333 New Hyde Park Road, New Hyde Park, New York 11042, as the "General Partner,"KIMCO DEVELOPERS,INC., a Maryland corporation having an address at 3333 New Hyde Park Road, New Hyde Park, New York 11042 as the "Class A Limited Partner," and WOLTEMATH-OTIS DEVELOPMENT, West C., a ebraska c Omoahaon having an Nebraska b8114�rassthe at Financial Plaza Building, Suite 242, 9 Dodge ge Road, "Class B Limited Partner." The Class A Limited Partner and the Class B Limited Partner are sometimes hereinafter collectively referred to as the "Limited Partners" and individually as a "Limited Partner;" and the General Partner and the Limited Partners are sometimes hereinafter collectively referred to as the"Partners"and individually as a"Partner." WITNESSETH• WHEREAS: 1. The Class B Limited Partner has entered into that certain Real Estate Purchase Agreement dated April 16, 2003 between Eaton Hydraulics, cs, Inc. as" Sell which r n the Class pid for the B Limited Partner, as Purchaser (hereinafter referred to as thepurchase by the Class B Limited Partner of approximately 79.48 acres of land in Omaha, Nebraska(the"Shopping Center Parcel"). ") 2. The Class B Limited Partner as Seller and Target Corporation " arget")r sa Buthr entered into a letter of intent dated July 14, 2003 (the "Target LOI") providing f potential purchase by Target of approximately 12.34 acres of the Shopping Center Parcel (the "Target Land"). The remainder of the Shopping Center Parcel (i.e., excluding the Target Land) is hereinafter referred to as the"Land." 3. It is anticipated that the Partnership may simultaneously close on the acquisition of the Land, and consummate the closing of the Target Land pursuant to a contract with Target to be hereafter negotiated by the Partnership (the "Target Contract"), at the time and in accordance with the provisions of the Contract and the Target LOI. 4. The Contract reveals the presence of contamination on (and emanating from) the Land by certain hazardous substances (the "Environmental Condition"). hts to 5. The parties hereto desire to form a limited partnership to e of developing ueithe esaig Land acquire the Shopping Center Parcel under the Contract for the pure P g (in cooperation with Target) as an integrated project which will be primarily a shopping center with potentially other compatible uses for portions thereof; which development may include EX#/ //q 7 Date: Ltd JoAnn Klemm CCR#5002< Lat construction of buildings and offsite and common area improvements, and lease of buildings and/or parcels of land. Such development of the Land is hereinafter referred e to as the " ofby ct e." It is also anticipated that the Target Contract, and agreements to Partnership in connection therewith (the "Development Agreements"), will provide for the construction by the Partnership of certain improvements s ontheTarget Land and the Land, and f costs thereof ("Target the reimbursement by Target to the Partnership for portion Reimbursements"). NOW,THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable a5consideration,o the receipt and adequacy of which are hereby acknowledged,the parties hereto agree ARTICLE 1. DEFINED TERMS In addition to the defined terms above set forth, the following terms shall have the definitions hereinafter indicated whenever used in this Agreement with initial capital letters: Section 1.1. "Act" means the Nebraska Uniform Limited Partnership Act, as previously or hereafter amended. Section 1.2. "Additional General Partner" means any Person that has been admitted to the Partnership as a General Partner pursuant to Section 9.3 by virtue of such Person receiving its Partnership Interest from the Partnership and not from another Partner. Section 1.3. "Adjusted Capital Account" means, with respect to any Partner, the balance in such Partner's Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments: (a) add any amounts which such Partner is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or the penultimate. sentence of each of Treasury Regulation Sections 1.704-2(i)(5) and 1.704-2(g)(1); and (b) subtract the items described in Treasury Regulation Section 1.704- 1(b)(2)(ii)(d)(4), (5) and (6). Section 1.4. "Adjusted Capital Account Deficit" means, with respect to any Partner,the deficit balance,if any, in such Partner's Adjusted Capital Account. The foregoing definitions of Adjusted Capital Account and Adjusted Capital Account Deficit are intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. Section 1.5. "Affiliate" means a Person that directly or indirectly, through one or more intermediaries, has voting control of or has its voting controlled by, or is under common voting control with,the Person specified. cADDLINE-ir wu.oc l s-D7—,ALDah-,.Doc 2 Section 1.6. "Base Rent"means, with respect to any Project Lease, the base or i minimum or fixed rent payable thereunder, exclusive of any (i) percentage rent, (ii) tax, CAM, insurance or other reimbursement or escalation o costs, and/or (iii)are "cost i osteff of living" or similar adjustment (except for any such that have been ) , Section 1.7. "Capital Account" is defined in Section 3.7. Section 1.8. "Capital Contribution" means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Partnership by such Partner. Section 1.9. "Capital Proceeds" means the net proceeds derived by the Partnership as a result of a Capital Transactionof sushtborrined as owing ororefinancing less all costs and borrowing or refinancing, the gross amountr expenses incurred by the Partnership in connectiond n he casthe e of a saleoorlother disposition of any third party loans repaid with such proceeds, (ii) any asset, the gross amount of such sale proceeds less any costs or expenses incurred by the f Partnership, or payable specifically out of as the result of such sale), (iiis of such sale) the case of anying any insurance any indebtedness required to berepaidcosts and expenses or condemnation recovery, the gross amount of any such proceeds, less any incurred by the Partnership in conjunction with the recovery thereof, and less any amounts paid or set aside by the General Partner in reserve for payment of e any restoration ye previously o oft cede from t relating to the event giving rise to such recovery, and (iv) any Capital Proceeds by the General Partner which are deemed available for distribution by the Partner. Section 1.10. "Capital Transaction"means a transaction pursuant to which (i) the of the Partnership finances or refinances the Project or any portion thereof; (ii) all or any portion ed or otherwise disposed of, (iii) insurance proceeds or other Project is sold, condemned, exchanged damages in respect of the Project are recovered by the Partnership, or (iv) any other transaction which, in accordance with generally accepted accounting o he tra traction iles, is n the Target Contract nsidered capital in nature. Notwithstanding the foregoing: (x) closing received by the Partnership shall not be considered a Capital Transaction; and (y) proceeds and shall attributable to the closing of the Target Contract t be deemed forth in Section.Capital rathersame shall not be distributed to the Partners (except as expressly set be used (if not distributed as set forth in Section 5.6) to pay Land Acquisition Costs and/or Site Development Costs. Section 1.11. "Code"means the Internal Revenue Code of 1986, as previously or hereafter amended. Section 1.12. "Conflicting Activity"is defined in Section 4.4. _-� \DONI.2-1.0ani-OCA S-MMPUMiTE-1.DOC 3 • Section 1.13. "Contract Closing" means the closing of the transaction set forth in the Contract, i.e., the acquisition by the Partnership of fee title to all of the Land pursuant to the Agreement; and the simultaneous acquisition by Target of title to the Target Land. Section 1.14. "Contract Closing Date" means the date upon which the Contract Closing occurs. Section 1.15. "Depreciation" means, for each fiscal year or other period, an amount equal to the federal income tax depreciation, amortization ortr other period,ther cost recovery except that if the deduction allowable with respect to an asset for such year Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value suchas the federal income her perioatax bdars depreciation, amortization or other cost recovery deduction foryear or o such beginning adjusted tax basis; provided, however, that if the federal income depreciation all be amortization or other cost recovery deduction for such year is zero, Depreciation determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner. Section 1.16. "Development Fees" mean the development fees described in Section 4.8. Section 1.17. "Dissolution Event"means any event specified in Section 10.2 that ( results in the dissolution and winding up of the Partnership. Section 1.18. "Effective Date" is defined in Section 13.5. Section 1.19. "Encumbrance" means a pledge, alienation, mortgage, hypothecation, encumbrance or similar collateral assignment by any other means, whether for or involuntary (including, without limitation, by value or no value and whether voluntary bankruptcy or other legal or operation of law or by judgment, levy, attachment, garnishment, equitable proceedings). Section 1.20. "Entity" means any general partnership, limited partnership, limited liability partnership, corporation, limited liability company,joint venture, trust, business trust,cooperative or association. Section 1.21. "Event of Bankruptcy" means,with respect to any Person: (a) The entry of a decree or order for relief by a court having jurisdiction in respect of such Person in an involuntary case under the Federal bankruptcy lv laws, as now or hereafter constituted, or any other applicable Federal or State bankruptcy, trusteency , similar law, or the appointment of a.receiver, liquidator, assignee, custodian, sequestrator (or other similar official) for such Person or for any substantial part of its property, or the entry of any order for the winding- for a or liquidation eriod of sixty(60) consecutive days; re of any such decree or order unstayed and in effectperiod 4 (b) The commencement by such Person of a voluntary case under the Federal bankruptcy laws, as now constituted or hereafter amended, or any other applicable Federal or State bankruptcy, insolvency or similar law, or the consent by such Person to the custodian, appointment of or the taking of possession by Person or foreceiver, uany sidatornbstaignee n a] part ofets property, sequestrator (or other similar official) for such or the making by such Person of any assignment for the benefit of creditors, or the taking of action by such Person in furtherance of any of the foregoing; or (c) The commencement eBh asagainst Person an voluntary case under the Federal Bankruptcy Co chnot been vacated, discharged orbonded within sixty (60) consecutive days; or (d) The admission in writing by such Person of its inability to pay its debts as they.become due. Section 1.22. "G.P. Loan" is defined in Section 3.3. Section 1.23. "Gross Asset Value" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (a) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, ass deteror to ii ed byj the General Partner(it being agreed that no value shall be ascribed to the Contracts ). (b) The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the General Partner, immediately prior to the following times: (i) the acquisition of an additional interest in the Partnership by a new or existing Partner, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership; (ii) the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property as consideration for an interest in the Partnership, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership; (iii) the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and (iv) at such other times as the General Partner shall reasonably determine necessary or advisable in order to comply with Regulations Sections 1.704-1(b) and 1.704-2. , (c) The Gross Asset Vae of an the day te of distribution ership asset lstributed to a as determined Partner shall be the gross fair market value of such asset on by the General Partner. (d) The Gross Asset Values of Partnership assets shall be increased (or h ets decreased) to reflect any adjustments to the dJusted basis of to the extent thatcsuclhsadjupursuant stms pantaoe Code Section 734(b) or Code Section 743(b), butonly into account in determining Capital Accounts pursuant shall not belations Section 1.704-1 adjusted pursuant to this (b)(2)(rv)(m);provided, however, that Gross Asset Values Section 1.23(d) to the extent that the General with a transaction determines ctton thatould otherwise adjustment pursuant to Section 1.23(b) is necessary or appropriate in connection result in an adjustment pursuant to this Section 1.23(d). Section 1.24. "Guaranty Fee" is defined in Section 4.12. Section 1.25. "Invested Capital" means with respect to any ton Capitaler,Contributionssadate of reference, the total amount of such Partner's initial and anye with regard to the Class B under Article 3 hereof, reduced (but not below zero) by (x) solely g Limited Partner, the amount of the Class B Limited distributions ReimbursemCa t P ocAmount, if to as when paid, (y) the aggregate amount of any prior Partner pursuant to Section 5.3(ii), and (z) any prior distributions to such Partner pursuant to Section 5.6. Section 1.26. "Land Acquisition Costs" means all costs paid or incurred by the Partnership at the Contract Closing in connection and construction, formatioion of the n of anyn (ii) amounts paid by the Partnership Contract in connection with the acquisition of the Land, any hereof,) (iii) anyamountst to reimburse the Class B Limited Partner pursuant o the Target Contrtion act(other than amounts under required to be paid by the Partnership pursuant the Development Agreements, which shall be deemed Site Improvement Costs), (iv) all costsy fees title insurance, recording fees, surveys, �'oi]�filiat sts slor lawyerd fees of lawyers tthe Class BLimi excluding Partner to in-house lawyers of the General Partnership for negotiating this Agreement, la llch shall costs of pot be a ermits and ppro als,{includingpense), cwilthout limitation and other professionals, and (v) P any so-called "concurrency" costs or fees which th Lce not reimbursed to the Partnership by purchasers, from the Partnership, of portions of • Section 1.27. "Majority in Interest of the LimiteddO/Partnofere"P means a Irate te d Partner or Limited Partners owning, in the aggregate, more than of all Limited Partners. Section 1.28. "Management Fees" means the fees payable to the General Partner or any Affiliate pursuant to Section 4.9 hereof. c:,DOCUME-1 i 10Cus-„Two *Ei. 6 Section 1.29. "Net Cash Flow" means, with respect to any fiscal year or other accounting period designated by the General Partner, all cash revenues derived from operations of the Partnership (excluding Capital Contributions and Capital Proceeds, and tenant security deposits unless and until such security deposits are applied against a tenant default), and reasonable amounts previously set aside as reserves that the General Partner determines are no longer necessary for such purpose, less the following payments and expenditures to the extent the same are made from such cash revenues received by the Partnership: (i) all principal and interest payments on mortgages and other indebtedness of the Partnership and all other sums paid to lenders; (ii) expenditures, other than from funds previously reserved by the Partners for contingencies, to acquire, improve, replace or repair capital assets; (iii) all cash expenditures incurred incident to the operation of the Partnership's business (including, without limitation, real estate taxes, common area expenses,utility costs,building repair and maintenance costs, and payment of Development Fees, Management Fees, Guaranty Fee, Leasing Commissions and other fees to Partners or their Affiliates); (iv) additions to any replacement reserves; and (v) reasonable reserves for contingencies as shalls noteshed by the be deemed part ral ofl�etn r.Cash Flow Notwithstanding dC Pita] the foregoing, Target Reimbursements Proceeds),but shall instead be distributed pursuant to Section 5.6. Section 1.30. "Nonrecourse Deductions" means deductions as described in Treasury Regulation Section 1.704-2(c). Section 1.31. "Offsite Improvement Costs" means all direct and indirect costs (including, without limitation, costs of materials, labor, permits, fees and surveyors, engineers,. and other professionals)incurred by the Partnership to provide Offsite Improvements. Section 1.32. "Offsite Improvements" means any new, relocated or enhanced drainage or other utility lines or facilities, roads, landscaping, traffic signals or other work or improvements to public or private property outside the Land or the Target Land required as a condition of or in connection with development of the Land or the Target Land, by any municipality having jurisdiction, by any third party pursuant to the Contracts or Development Agreements or by a recorded instrument affecting the Land or the Target Land. Section 1.33. "Partner Minimum Gain" means minimum gain attributable to a Partner Nonrecourse Debt determined in accordance with Treasury Regulation Section 1.704-2(i). Section 1.34. "Partner Nonrecourse Debt" has the meaning set forth in Treasury Regulation Section 1.704-2(b)(4). Section 1.35. "Partner Nonrecourse Deductions" has the meaning set forth in Treasury Regulation Section 1.704-2(i)(2). Section 1.36. "Partners"means, collectively, the General Partner and the Limited to time suant to the Partners and any Person greem nt. Reference to a `Partneritted as a "shall from refertime any one orrmore of the provisions of this Agree Partners, as the context may require. (�_ C:IDOCUME-IbnuUACA16-Wren WA9TE-I.000 Section 1.37. "Partnership" means the limited partnership formed pursuant to this Agreement. Section 1.38. "Partnership Interest" means the interest, as a Partner, of any Person in the Partnership. Section 1.39. "Partnership Minimum Gain" has the meaning set forth in Treasury Regulation Section 1.704-2(d). Section 1.40. "Partnership Purchase Price"is defined in Section 11.2(b). Section 1.41. "Percentage Interest" means, with respect to any Partner, such Partner's particular share, expressed as a percentage, in various rights, benefits, duties and obligations by virtue of being a Partner of the P Partnership sP anders haldil g a Partnership Interest in the Partnership. The initial Percentage Interests of General Partner 1% Class A Limited Partner 49% Class B Limited Partner 50% Section 1.42. "Person"means and includes any individual or Entity. ly Section 1.43. "Pre-Closing Costs" means all amountsexpenses of deemed th Peasonabiy necessary by the General Partner to fund all activities anandlrnor�to the Contract Closing Date, following July 14, 2003 (the date of the Target LOI) P including without limitation costs of all surveys, reports, inspections, engineering plans, professional fees and expenses, permits, approvals, applications, additional deposits (if any) under the Contract, etc. Section 1.44. "Profits" and "Losses" means for each fiscal year or other period ect to the relevant an amount equal to the Partnership's taxabl income03 a or(for oss with thispurpose, all items of income,period, determined in accordance with Code Section ( ) shall be loss or deduction required to be stated the separately following pursuant to Code Section 703(a)(1) included in taxable income or loss),with nts: (a) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits and Losses pursuant to this Section 1.44 shall be added to such taxable income or loss; (b) Any expenditures of the Partnership described in Code Section c2 or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section e Sectt ionon 1.70.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this Section 1.44, shall be subtracted from such taxable income or loss; o�DG1-S-1�T®pWMtTEr1.DOC C:�NIdE-1'p� 8 J ,I I ( (c) If the Gross Asset Value of any Partnership asset is adjusted pursuant to Section 1.23(b) or Section 1.23(c),the amount of such adjustment shall be taken into gain or loss from the disposition of such asset for account in the taxable year of adjustment as purposes of computing Profits or Losses; (d) Gain or loss resulting from any disposition of Partnership property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value o thes propGroserty A dissetposed Vlu of, notwithstanding that the adjusted tax basis of such property differs from (e) In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable inc ome or loss,ted i there edancee ll we toke Sn into tion account Depreciation for such fiscal year or other pen P 1.15; and (0 Notwithstanding any other provision of this Section 1.44 any items of income, gain, loss or deduction which are specially allocated pursuant to Article 6 shall not t be ss taken into account in computing Profits l]ocatedeSursuant to Article 6 shall be determie amount of items of income, ned using and deduction available to be specially P rules analogous to those set forth in this Section 1.44. Section 1.45. "Project Completion Date" means, maximum st date ggregate which amounl of of the following shall have occurred: (i) not less than 95/0 of oss leaseable area of building space intended to be constructed by the Partnership (or by � ou arcels - � Project Tenants under ground leases) on �e n anding without oc opted by Projecto Tenants hose owned by the Partnership) shall have beencompletedg buildin s to be constructed on full rent obligations shall have commenced (for such purpose, any than 30 days delinquent in payment of any any p0 of the Land that has been sold to third parties shall not be included in such 95% and (ii)no Project Tenant shall be more item of Base Rent or additional rent. Section 1.46. "Project Lease" means a lease between the Partnership building landlord ord (directly or by assignment) and any Person as tenant covering any land Project. Section 1.47. "Project Rights" means any and all contracts (other than the Target LOI), development plans, environment, soil and engineering reports, zoning Contract and letters of intent for Project Leases (if any), studies, surveys, title reports, Project Leases (if any), documentation and municipal and other governmental approvals and permits, and other rights, assets related to the Project. Section 1.48. "Project Tenant"means a tenant under a Project Lease. Section 1.49. "Regulatory Allocations"is defined in Section 6.4. CADOCUMErDMmNACA1S-111 crap U.IM TE-1.DOC 9 1 to remove, reconfigure and/or Section 1.50. "Remediation Plan" means a plan replace existing environmental remediation equipment or soil vapor extractionevices, d equipmen but not t andall monitoring wells, groundwater extraction equipment, ompatible related apparatus located on the Shopping Center Parcel,o conti manner complyingswam all caPPlicable with the Site Plan, so as to allow the Seller environmental laws,regulations, orders and agreements governing the Environmental Condition. Section 1.51. "Site Development Costs" means, with respect to the Project, the sum of the following: (a) all Offsite Improvement Costs; (b) costs of all Site Improvement Work, including without limitation costs of materials, labor, engineers, architects and other professionals, and permit fees; less any Target Reimbursements as and when received by the Partnership; and (c) all costs of the Partnership associated with the bm d ti lan, i any, and costs of demolishing existingaconstructing any g and other structures on the Land, including, without structuresation costs of materials, labor, engineers,fees. architects and other professionals, and permit f e Section 1.52. "Site Plan" means thePrunderstood thased t such plan iment plan s tentative oJect and and the Target Land set forth on Exhibit "B" (it being that the General Partner [subject to compliance with laws, the Target Contract, the Development Agreements, and all applicable recorded instruments], may make such changes which would reduce the gross leasable deems appropriate to the Site Plan, including, without limitation, adding, reducing or changing location of building areas); provided that any changes area of the Project by more than five (5%) percent shall require agrees shall not be unreasonably n approval of the Class B Limited Partner, which approval the Class B Limited withheld or delayed. Section 1.53. "Site Improvement Work" means any work required to construct itation utilities, drainage, grading, paving, all parking and other common areas of the Prro jnct, and of the Target Land pursuant to the Development Agreements, including without roadwork, parking areas, curbing, signs, access points, retention, detention, lighting and landscaping. Section 1.54. "Subsequent Funding Conditions" means all of the following: (a) all permits, approvals and entitlements required to develop rezoning, the Project substantially in accordance with Exhibit ]work, utility approing hout vals]wetland penrmits and/or DOT approvals, approvals of any requiredea]able form (provided that the final site plan approval shall have been obtained in final, unappealable acquisition of actual building permits for impr matter of right subjecS only ents shall not be a toecompliance Condition, as long as all of same areobofappe licable as a fees); with applicable building codes and payment C:IDOGUM�-1`P��- "717enDV164TE-.DOC• 10 r ' (b) the Target Contract and the Development Agreements shall have been entered into in form acceptable to the General Partner; (c) all title and other conditions to Closing under the Contract and the Target Contract shall have been satisfied, and the Contract Closing shall have occurred; (d) the Partnership shall have entered into (or had assigned to it as part of the Project Rights) fully executed leasesagreements riting by Target) of tenant an 200,000 square feet (or such lesser amount as may be approved in space in the Project (exclusive of Target and exclusiveo ofr c any gep neSeof any tenant or purchaser ls), all in form reasonably satisfactory to the General Partner, and all conditions in any such lease or purchase agreement shall have been e xr fulfilled or to as the waived "Lease Condition r , the eedate on which this condition is satisfied being hereinafter (e) there shall not exist any material uncured breach of any representation or warranty of the Class B Limited Partner under this Agreement; e ion (fl the terms, duration, cost an partner and s d fding of theuh approvedt Plan shall have been reasonably approved in writing by the General Remediation Plan shall have been approved in final form by the Federal Environmental Protection Agency; (g) a Tax Increment Financing Agreement, providing for the reimbursement to the Partnership of not less than S3,000,000, nd hhvebeen exerwise in ec cut by all reasonably acceptable to the General Partner (a "TIF Agreement"), shall appropriate municipalities and/or agencies; and (h) the General Partner shall have completed all due diligence it deems to undertake and be reasonably satisfied of the viability and profitability of the Project. ent, Section 1.55. "Transfer" and `ansanwhether for erred" means value sale, no valuetransfer, and whether they gift, bequest or disposition by any other means, voluntary or involuntary (including, without limitation, by realization upon any En cumbrance ot b i gal or or by operation of law or by judgment, levy, attachment, garnishment,bankruptcy equitable proceedings). Section 1.56. "Unpaid Preference" means, with respect to the General Partner and Class A Limited Partner only, from and after the Contract Closing Date through the date of reference, (i) the cumulative amount of interest that would if such Invested Capital instead to such date on the weighted average balance of such Partner's Invested Capitalhad per been outstanding amounts of indebtedness, at an interest rate equal to ten (10%) percent of per the aggregate annum compounded quarterly, reduced (but not below zero)by (ii) any prior distributions of Net Cash Flow and Capital Proceeds the specific made to the eet provisions ri n rod ction of such Unpaid Preference of the Partner pursuantP C:IDOCVA¢1`Pr" r.t i C-1\TaoPlJ TE-1.DDC 11 / 5.2(a)(i) and 5.3(i). In amplificationof he Contac foregoing,C no oing Date. Preference shall accrue on the Invested Capital of any Partner prior ARTICLE 2. FORMATION Section 2.1. Intent. The Partners hereby form the Partnership, pursuant to the ement terms and conditions set forth in this AgreementAct. mandatory,hen the ter mof this eof this are inconsistent with any of the terms of the Act which are not Agreement shall control. The name of the Partnership shall be KDI Omaha,L.P. Section 2.2. Certificate of Limited Pait er rtp. The o General eraLimited P Partner e s phas iled, on or prior to the date of this Agreement,the Partnership's ffice Section 2.3. Princi al Place of Business Re is c/o CTStered CorporOation System, 301 Souhe th Partnership's registered office in the State of Nebraska 13th Street, Suite 500, Lincoln, Nebraska at s08, and the uch address shall 11 be CT Corporationstered agent for )System.process on the Partnership in the State of Nebraska Park Road, New Hyde Park, New principal office of the Partnership shall be 3333 New Hyde e. York 11042-0020, or such other place as the other General place Partner places within or outside the Sta�tetof The Partnership may maintain offices at such Nebraska as the General Partner deems advisable. Section 2.4. PL ose of Parmersli�. The purpose of the Partnership is to engage in the following business and financial activities in accordance with the terms ofthis Agreement: to acquire, own,hold,maintain,manage, operate, improve, develop, finance,pledge, encumber, mortgage, assign, sell, exchange, lease, dispose of and otherwise deal with the d to, erwise Project, together with such other activities as eay e. ThelPartnership,y or ewithoutrthehwritten necessary or advisable in connection with the for foregoing. consent of all Partners, shall not engage in Proy b'ect orss unreled otlierwise intfurthetherancecof the purposes own any assets other than those related to th of the Partnership (it being understood that the Class B Limited Partners shall not be required to make any Capital Contributions or loans except as expressly set forth in Section 3.1). It is the General Partner's intention to cause the P oject to c to be built as a a quality e retail center (with possible non-retail components), pursuant conditions and standards, and the General PartnrPae�ers, hall be prov ded by either nrds that s Project, capital addition to the Initial Capital Contribution of thethe contributions or loans of the General Partner, capital ortions o other tChi d pAartyLloaned Partner,payments under the TIF Agreement, or the Construction s. ARTICLE 3. CAPITAL Section 3.1. Initial Ca ital Contributions. (a) The Class B Limited Partner shall make the following Capital Contributions to the.Partnership: c:\nocvME-iw.sflu.ows-nTamo�*flTE-i.00c 12 I _ ( (i) Simultaneously with the execution of this Agreement, the Class B Limited Partner shall, and shall cause any Affiliate to, assign, convey and transfer to the Partnership, through an assignment and assumption agreement in form reasonably acceptable to the Partners (including without limitation, the indemnity of the Partnership by the Class B Limited Partner, subject to any relevant provisions of this Agreement, as to any liability or obligation accruing or arising prior to the date of assignment, and the indemnity of the Class B Limited Partner by the partnership, subject to any relevant provisions of this Agreement, as to any liability or obligation occurring or arising from and after the date of ht, title and ignmenh, all its Ol a d the Projectheir entire t Rights. The Partners agr e,erest in and to the s since Contract,the Target L (as hereinafter set forth) the Class B Limited Partner is expected to be reimbursed for all of its expenses by the Contract Closing Date, that from and after the Contract Closing Date: (x) no value shall be ascribed to the contribution of the Contract, Target LOI and Project Rights and (y) accordingly, upon the payment of the Class B Limited Partner Reimbursement Amount, the Capital Account of the Class B Limited Partner shall be zero; provided, however, it is understood and agreed that until such time as the Class B Limited Partner Reimbursement Amount has been paid in full, the Class B Limited Partner shall be deemed to have made a Capital Contribution equal to the unreimbursed portion of the f Class B Limited Partner Reimbursement Amount from time to time. ii On request of any Partner, the Partners shall execute, nts as may be deliver and/or procure to cl�fiut?�ee documents nor effectuateethe foregoing reasonably necessary contributions. (iii) From time to time following the date hereof and prior to the Contract Closing Date, whenever in the opinion of the General Partner the Partnership requires funds to pay Pre-Closing Costs, it shall so notify each Partner in writing (a "Preliminary Capital Call"), which Preliminary Capital Call shall set forth the aggregate amount required, the general purposes such funds shall be used for, and the amount thereof required to be contributed by each Partner, based upon their respective Percentage Interests; provided, however, that from and after the earlier of (y) the Lease Condition Date or (z) the date that Target, in writing, either waives paragraph 19 (regarding Cotenancy) of the Target LOI, or agrees that the condition provided in said paragraph has been satisfied, the General Partner and the Class A Limited Partner shall be responsible for payment of all Pre-Closing Costs (including without limitation any additional deposits required under the Contract) and the Class B Limited Partner shall not be required to make further contributions toward such costs. Subject to the foregoing,within five (5) days of receipt of any Preliminary I -_ CADOCUME-1`pwnUACAl3-1NT®pVJACTE-1.DOC 13 { Capital Call, the Class B Limited Partner shall make a Capital Contribution to the Partnership in the amount required of it in and by such Preliminary Capital Call. (b) Simultaneously with the execution of this Agreement,f.or 50% of all third party expenses set Partnership shall reimburse the Class B Limited Partner forth on Exhibit "C-1" incurred by the Class PTheer or ClasstB Lfimit d Partnereshall be date of the Target LOI but before the date of this Agreement. deemed to have made a Capital Contribution equal to the remaining one-half of such expenses set forth on Exhibit C-1. If, prior to the Contract Closing, Target either waives paragraph 19 (regarding Cotenancy) of the Target LOl, or agrees that the condition in said paragraph has been satisfied, the remaining one-half of the expenses set forth on Exhibit "C-1" shall be paid to the Class B Limited Partner by the Partnership within seven(7) days of the General Partner's receipt of Target's written waiver or satisfaction. (c) Simultaneously with the Contract Closing, if same has not been previously reimbursed pursuant to the third sentence of Section 3.1(b), the Partnership shall reimburse the Class B Limited Partner for(x) 50% of the expll enses eed on party ehibit Cpenssahe portion that was not reimbursed on the date hereof), other amounts paid, including earnest deposit, set forth in Exhibit "C-2" incurred and paidZb) yet or its Affiliates with respect to the Ptheretofore ect madr to e by the Class thee date of B Limited POartner pursuant aggregate of all Capital Contributions to Section 3.1(a)(iii) ((x), (y) and (z) being hereinafter collectively referred to as the "Class B Limited Partner Reimbursement Amount"). Notwithstanding the foregoing provisions or anything to the contrary contained in this Agreement, if either (A) the General Partner exercises its right to dissolve the Partnership pursuant to Section 3.1(d) due to failure of a Subsequent Funding Condition (hereinafter"Partnership Cancellation"); or (B) the Contract Closing does not occur for any reason (including without limitationartneTslvp,e to close a seller default, a ue to titlelation defect� or f he Contract during the Inspection Period by he Partnership failure of a closing condition), other than hs A default Bement whicheoccurs inhhe absence of thereunder failre accruing and occurring after the date of $�' or refusal by Target to close its acquisition to the Class B Lim ted Partner t e the ent P�earnrest deposit immediately following receipt, distnb paid by the Class B Limited Partner when the Contract was exencuutedd (which distribute ay ts shall reduce the Invested Capital of the Class B Limited Partner), a any other heir amounts received under the Contract to the ershhall not be equireddance with the to make the reimbursementst ratios of respective Invested Capital; (ii)the Partnership of the Class B Limited Partner set forth alrers set forth in Article 4, and the Partners shall nt the nrd sentence of tion 3.1(b) or in this not,be on 3.1(c) or payment of any other fees to required to make any further Capital Contributions; and (iii) the General Partner, without requirement of any consent from any Limited Partner, may dissolve and liquidate the Partnership; provided that in such event on written requestt ofC rhe Css a tlaf sB 1 Liin ited Partner the the Partnership shall reassign (without recourse or warranty) thI e all deposits and other funds that may P�ebecoo;d°dlthatng tirntsuch event the ClasseB LOirni�teld d Project Rights to the Class B Limited , (P Partner shall contribute to the Partnership an amount equal to the aggregate Capital • kDocvME-iy,Nuv_CAts-R7enpU E-i.noc 14 eneral rtner Contributions theretofore made by the W ,atributaon shall the upon be d' t,s ributed to the nd Class A Limited Partner pursuant to Sections 3.1 a ,,, , c and/or (d), hich coheir General Partner and Class A Limited Partnerdoes not occuron due o to a defaul tpby the Partnership ective Percentage Interests). In the event the Contract Closing which accrues and occurs after the date of this Agreement which (1) occurs in the absence of a Land, (2) has not been preceded failure or refusal by Target to close its acquisition of the Target is not caused by or related to a material breach by theClss by Partnership Cancellation and (3) eement, then (x)the provisions of B Limited Partner of any representation or warranty notwithstanding the foregoing, (i) and (ii) in the preceding sentence shall be applicable, and however, the General Partner and the Class A Limited Partner eed 1 qu dat d damages andas the severally liable to pay to the Class B Limited Partner, any other sole right and remedy of the Class B Limitedrevio slyartner unrei bunst thesed lassiB Limited Partner Partner, a sum equal to the aggregate of th p reason Reimbursement Amount (as defined bOo close on the acquet asition of the refuses Target Land prior to whatsoever, including a default by Target) then the General Farmer, on behalf of the or simultaneously with the Contract Closing, or not such refusal would partnership, may refuse to consummate the Contract Closing (whetherthe Partnership shall, immediately constitute a default under the Contract) and in such event: (i) rid by following receipt, distribute to the Class B Limited Partnere tede and entire toearnest Partners deposit paidby the in Class B Limited Partner when the Contract wasuntil all . such_ accordance with the ratios of their respective Investednce be in expenses/contributions have been fully recovered, y amounts recovered distributedby the accordance with the Partners' respective Percentage eemenwith the Partnership or any Partner); (ii) the f Partnership from Target (pursuant to any Ito the Class B Limited Partner the Class B Limited General Partner shall not be required to oth r fees in Article 4; (iii) the provisions of(iii) of the Partner Reimbursement Amount or any second sentence of this Section 3.1(c) (including the Class B Limited Partner shall have no further ent to the Class B Limited Partner) shall be applicable; and (iv) rights or remedies against the Partnership or any other Partner. (d) (i) On the date hereof, the General Partner and Class A Limited Partner shall make initial cash Capital Contributions, pro rata in accordance with their d Partner respective Percentage Interests, of the amount required If Target waives or agrees that thee condition ', pursuant to the first sentence of Section 3 (b) stated in Paragraph 19 of the Target LOI has been satisfied prior Closing Date, the General Partner and Class A Limited Partner shall, make additional cash Capital Contributions, pro rata in accordance with their respective Percentage Interests, of the amount required to reimburse the Class B Limited Partner p hss anen (7t to �days of the date the General e third sentence of Section , 3.1(b). Said additional contributions shall be made v iPartner receives Target's written waiver or satisfaction. ! (ii) From and after the date hereof and prior to the Contract from Closing Date, the General Partner and Claccord ce s A with thted eir Percentner age Interests with e to dme, ue contribute to the Partnership (pro rata in reimbursement and reference to the provisions in Sections 3.1(a)(iii) and 3.1(b) regarding m -1b,uau.ocu-s-,v7®,A, -Lmc 15 requiredby PreliminaryCapital Call payment of Pre-Closing Costs) such amounts as are any p (within five(5) days of receipt of any such Preliminary Capital Call). (iii) Notwithstanding the foregoing provisions of Section 3.1(d)(ii), if at any time the General Partner in its reasonable discretion believes that any Subsequent Funding Condition will not be met for any reason (including without limitation by reason of any of the following: the denial of a required permit, approval or entitlement, the failure to execute a Target Contract or the cancellation by Target of the Target Contract, the failure to enter into a satisfactory TIF Agreement or Remediation Plan, or the failure of a Closing Condition under the Contract), it shall so notify each Limited Partner, and the giving of such notice by the General Partner shall be and be deemed an election to dissolve the Partnership. Upon the giving of such notice, the relevant provisions of Section 3.1(c) shall be applicable. (e) Subject to the provisions of Section 3.1(d),the General Partner and the Class A Limited Partner shall make initial cash Capital Contributions, on the Contract Closing Date, pro rata in accordance with their respective.Percentage Interests, of the amount required (net of any Target Reimbursements) to reimburse the Class B Limited Partner pursuant to Section 3.1(c) and to acquire the Land. ly. Except as otherwise Section 3.2. Addison 3.3,no Partner ributions shall halhbe required orpermitted to make any required by law or pursuant to Sec additional Capital Contributions to the Partnership. Section 3.3. Additional Capital Contributions. (a) At any time and from time to time following the making of the Initial Capital Contributions set forth in Section 3.1, the General Partner, in its sole and absolute discretion, may determine that the Partnership requires additional cash Capital Contributions (other than proceeds of a Construction Loan or Target Reimbursements) and the amount, terms and conditions thereof in connection with the development ftherooect(includiing, or following without limitation, for Offsite Improvement Costs, construction of buildings, as and such site improvements, or payment of operating expenses of the Partnership), g development, to meet the ordinary operating expenses of the Partnership,financingtshall have ch t the e igrty ht, at the General Partner's sole option, to either (i) seek third party financing may, at the General Partner's sole option, be secured by liens on the Project); or (ii) request additional Capital Contributions (but not fromeClass iBtsh Limited s notify the Class A General Partner elects to request additional Capital Contributions, Limited Partner. The General Partner shall be required to make an additional Capital Contribution equal to 1/50 of any such requested amount, and the Class.A Limited Partner shall have the right, but not the obligation, to make an additional Capital Contribution equal to 49/50 of any such requested amount. If the Class A Limited Partner shall refuse or fail to make all or any portion of any such additional Capital Contribution (it being agreed that the Class A Limited Partner shall have no liability to any other Partner or any other Person for such failure or refusal), the General Partner shall be required to make a loan to the Partnership in the amount of any such shortfall (a "G.P. Loan"). G.P. Loans shall bear interest at the rate of ten (10%) percent per annum. Notwithstanding anything to the contrary in Article 5 or any other provision of this } CIDOCUME-IVsepLLACAI.S-M=PUKTE-I.DOC 16 Agreement, if the General Partner should make any G.P. Loans from time to time, then (i) distributions of Net Cash Flow shall first be applied to payment of accrued interest under all outstanding G.P. Loans; and iall oub tanding G.P.distriutions of Loan ital randeds nextholl palrst be yment of principal to payment of accrued interest under thereunder until all G.P. Loans are paid in full. (b) Notwithstanding the provisions of Section 3.3(a), the Partners agree that they will make reasonable efforts to procure construction financing for the Project from a lender, in amounts (provided the General Partner will apply for a loan of at least 80% of the total amount it believes will be needed to construct the Project), and on terms reasonably acceptable to the General Partner and Class A Limited Partner (a "Construction Loan"). The General Partner agrees to consult with the Limited Partners regarding the progress of obtaining and negotiating such Construction LopartrProvided t tot it has personally guarantee proved the erepayment of the , amount and terms thereof, the Class A Limited agrees Construction Loan. (c) The General Partner agrees to use good faith, reasonable efforts to develop the Project as a quality retail center (with possible non-retail components) pursuant to commercially reasonable conditions and standards; and further agrees to make or cause to be made such Capital Contributions and/or third party loans or G.P. Loans as may be reasonably required to accomplish the foregoing. (d) In amplification of the foregoing, except as expressly above set forth, no Limited Partner shall be required to make any additional Capital Contribution without the consent of such Limited Partner,which consent may be withheld at its sole discretion. Section 3.4. Return of Capital; No Interethe r turn Capital. or all of its Capital provided in this Agreement, no Partner shall be entitled to Contribution. Neither a Partner's Capital Account nor its Capital Contribution shall earn interest (but the foregoing shall not be deemed to impair Partners' rights to receive Unpaid Preference). Section 3.5. No Third-Party Beneficiary.No creditor or other third party having dealings with the Partnership shall have the right to enforce the right or obligation of any Partner to make Capital Contributions or G.P. Loans or to pursue any other right or remedy hereunder or at law or in equity, it being understood and agreed that the provisions of this Agreement shall be solely for the benefit of, and may be enforced solely by, the parties hereto and their respective successors and assigns. None of the rights or obligations of the Partners herein set forth to make Capital Contributions or G.P. Loans to the Partnership shall be deemed an asset of the Partnership for any purpose by any creditor or other third party, nor may such rights or obligations be sold, transferred or assigned by the Partnership or pledged or encumbered by the Partnership to secure any debt or other obligation of the Partnership or of any of the Partners. Section 3.6. Limited Liability of the Limited Partners. Notwithstanding anything to the contrary contained in this Agreement and except as otherwise required by law, the liability of a Limited Partner for any losses of the Partnership in no event shall exceed, in the aggregate,the amount of its Capital Contribution invested in the Partnership. .. C:1D0(UME-IpanVnrkt -11TenpW1ATE-I.00C 17 11 ' Section 3.7. Capital Accounts. (a) There shall be established for each Partner on the books of the Partnership, as of the date hereof, a"Capital Account"which shall be increased and decreased in the manner set forth herein. (b) "Capital Account" means, with respect to each Partner, an account maintained for such Partner on the Partnership's books and records in accordance with the following provisions: (i) To each Partner's Capital Account there shall be added (a) such Partner's Capital Contributions, (b) such Partner's share of(i) Profits and (ii) any items in the nature of income or gain which are Pnershiy specially allocated pursuant to Article 6 and (c) the amount of any liabilities assumed by such Partner or which are secured by any partnership property distributed to such Partner. (ii) From each Partner's Capital Account there shall be subtracted (a) the amount of(i) cash and (ii) the Gross Asset Value ofany partnership property distributed to such Partner pursuant to any provision of this Agreement (other than amounts the paid Partnership), (b) such Panne nt�s principal on any loan by a Partner loss share of(i) Losses and (ii) any items in the nature of exp the oram nt es which are specially allocated pursuant to Article 6 and (c) of any liabilities of such Partner assumed b h thePar pa oer eip paor is are secured by any property contributed by ni In determining the amount of any liability for purposes of (iii)Sections 3.7(b)(i) and (ii), there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and the Regulations. (iv) A Partner who has morethan hat one refles interest all the su ha Partnership shall have a single Capital Accountr regardless of the class of interests owned by w such Par ed.and regardless of the time or manner in which such (v) The General Partner, in its discretion, may increase or reflect a decrease the Capital Accounts ofth Partners ooksoand records, butaonly n tion of Partnership property on the Partnership's accordance with the terms set forth in Section 1.23. (c) Additional adjustments shall be mad to.704e2 or, permitted bue Partners' tpnot Accounts as required by Regulations Sections 1.704-1(b) and 1uired b such Regulations, in the discretion of the General Partner. Adjustments to Capital req Y C\DOCUME-1`pnttLOCALCA\Tama A9TE-1.DOC 18 • Accounts in respect to Partnership income, gain,loss, deduction and non-deductible expenditures d, in (or item thereof) shall be made with reference to the�treatmen of the corresponding taxral tax treatment of such items atems) the case of book items, with reference to the federal at the Partnership level,without regard to any requisite or elective tax treatment of such items at the Partner level. (d) The provisions of this Section 3.7 and the other provisions of this tended to comply Agreement relating to the maintenance of Capital halAlbe�unts nterpreted are nand applied in a manner with Regulations Sections 1.704-1(b) and 1.704 2 and sr consistent with such Regulations. In the event that the Gener additions shall or subtract determine that it is to prudent to modify the manner in which Capital Accounts, or any (including, without limitation, adjustments relating to liabilitiesshi th the at arePa secured rs), are Icon b d id n or distributed property or that are assumed by the Partn p order to comply with such Regulations, the General Partner shall be entitled to make such modification, provided that it is not likely to have a material effect on the amounts distribPartner utable to any Partner pursuant to Section 10.3 upon dissolutione nec ary toe appropriate to maintain Partnership. The General equality shall also make (a) any adjustments that arcapital reflected on between the Capital Accounts of the Partners and the amount of Pain tao orhipce with Regulations the Partnership's balance sheet, as computed for bookpurposes, Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate modifications in the event that unanticipated events might otherwise cause this Agreement not to comply with Regulations Sections 1.1704-i(o) and 1.704-2. (e) No adjustments shall b lb ade to the rsuant to Article 4 oof l Account of any Partner by reason of payment or receipt of any fe y it orany Aff ate pu this Agreement. ARTICLE 4. MANAGEMENT OF THE PARTNERSHIP Section 4.1. Authorit of the General Partner. (a) Except as expressly provided to the contrary in this Agreement and in addition to the powers given to the General Partner requirement ylaw,w, the f any General con Partner aa approval, acting from and in its sole and absolute discretion, without any of the any Limited Partner, shall have the exclusive and completthe Proe charge of erty which tare consistent with the Partnership (including as to all matters concerning p without limitation, the purpose of the Partnership set forth in Section 2.4 hereof) including, following: (i) To extend the Inspection Period or Closing Date under the Contract (but notwithstandingtaree fnoegoing the General materially adverse con equener �ces or it will, if requested, [and if there additional consideration required therefore], agree to an extension of the to Inspection Period under the Contract of up to ninety (90) days), terminate or refuse to close under the Contract (in which case the relevant provisions of Section 3.1(c) shall be applicable), to acquire the Land, to manage, insure against loss, protect and subdivide the Project, interests therein or parts thereof; to improve, develop or redevelophe Project to enter nto and the Target Land pursuant to the Development Agreements;n ate en the the TIT Agreement and/or Remediation Plan; to p p ownership and development of the Project; to sell, convey, to ilea mortgage the pledge or otherwise encumber the Project, or any pal, t eerems and for any Project or any part thereof from time to time, uponany period of time (provided that the General Partner covenants and agrees that any leases it enters into will be bona fidea ando negotiated ego iw are in good Project and ones commercially c reasonable e or modify s),the terms and provisions of any Leases, to amend, g y Project Leases and to grant options hlease 1and options interest in or about leases; oro transfer, convey or assign Y g thereof, to construct and easement appurtenant to the Project or any part reconstruct, remodel, alter, repair, add to or take from buildings on any real property in which the Partnership owns an interest; 1i To employ, engage or contract with or dismiss from employment or engagement Persons to the extent deemed necessary by the General Partner for the operation and management of the Partnership business, including but not limited to, contractors, subcontractors, surveyors, mechanics, consultants, accountants, engineers, architects, yo attorneys, investment bankers, underwriters, insurance brokers,ire l e tate e brokers and others (including, without limitation, any AffilGeneral Partner or any Limited Partner or employees of such Partner or compensation paid to any such Affiliates or . Affiliates; provided that any P market rates for similar employees may not exceed reasonable thirdangerent party mar such Affiliates or services and provided further any od faith); with employees shall be entered into in go (iii) To enter into, make, amend, perform and carry out or out cancel and rescind, contracts and other and obligations, indemnity agreements for limitation, the Contract, and guarantees purpose pertaining to the business of the Partnership; (iv) To borrow money, procure loans and advances from m any any Person for Partnership purposes, and to apply for and secure, Person, credit or accommo everyns kind and nature with or without; to conact abilities and igations, security; direct or contingent and of ry and to repay, discharge, settle, adjust, compromise, or liquidate any such loan, advance, credit, obligation or liability; (v) To pledge, hypothecate, mortgage, assign, deposit, deliver or otherwise give as security or as additional or substitute security, or reo r assignment, sale or other disposition the Project or any ortionportions thereof and to make substitutions thereof, and to receive any p CADOCIME-IY�nVACALS-MempNllFllTE-1D0C 20 upon the release or surrender thereof; to sign, execute and deliver any and all assignments, deeds and other contracts and instruments in writing;ato authorize, give, make, procure, accept and receive moneys, payments, property, notices, demands, vouchers, receipts, eat s s, comprom nd authorize and ises and adjustments; to waive notices, demands, protest execute waivers of every kind and nature; to enter into, make, execute, deliver and receive written agreements, do undertakingsa and anda other acts instruments and every kind and nature; and generallydealingsa things incidental to any of the foregoing or with reference for any or advisable or transactions that the Partners may deem necessary, proper the abdvisable to effect or accomplish any of the foregoing or to carry ess and purposes of the Partnership; (vi) To acquire and enter into any contract of insurance that the General Partner deems necessary or appropriate for the protection of the Partnership, for the beneficial the Partners phip's assets or for any purpose convenient or (vii) To conduct any and all banking transactions on behalf of the Partnership; to adjust and settle checking, savings, and other accounts with such institutions as the General P nershall d deliver,eere appropriate;e and pay draw, sign, execute, accept, endorse, guarantee, any checks, drafts, bills of exchange, acceptances, notes, obligations, undertakings and other instruments for or relating to the payment of . money in, into, or from any account in the Partnership's name;-to execute, procure, consent to and authorize extensions and renewals of any of the foregoing; to make deposits into and withdrawals from the Partnership's bank accounts; (viii) To demand, sue for, receive, arndeots rwise s dividake steps to collect or recover all debts, rents, proceeds, ichattels, income from property, damages and all other property, to which the Partnership may be entitled or that are or may become due the defend, from any Person; to commence, prosecute, enforce, answer, oppose, contest and abandon all legal proceedings in which the Partnership is or may hereafter be interested; and to settle, compromise or submit to arbitration any accounts, debts, claims, disputes and matters that may arise between the Partnership and any other Person and to grant an extension of time for the payment or satisfaction thereof on any terms, with or without security; (ix) To make arrangements for financing, including the taking of all action deemed necessary or appropriate by the General Partner to cause any approved loans to be closed; • Imo, -�J C:NDOCUM1E-I tl110CAL5-I1TwpU.iMITE-I.DOC 21 To take all reasonable measures necessary to ensure compliance by the Partnership with applicable agreements, and other contractual obligations and arrangements, entered into by the Partnership from time to time in accordance with the provisions of this Agreement, including periodic reports as required to be submitted to lenders; (xi) To maintain the Partnership's books and records; (xii) To prepare and deliver, or cause to be prepared and delivered, all financial and other reports with tues respect to r the operations of the Partnership and all federal and state tax (xiii) To pay or reimburse any and all fees, costs and expenses incurred in the formation and organization of the Partnership; (xiv) To do all acts that are necessary, customary or appropriate for the protection and preservation of the Partnership's assets, including the establishment of reasonable reserves; (xv) To establish and maintain any and all reserves, working capital accounts and other cash or similar balances in such amounts as it reasonably deems necessary; and (xvi) In general, to exercise all of the general rights, privileges and powers permitted to be exercised by the provisions of the Act. (b) No Limited Partner shall participate in the management uenty of the act Partnership or have any ersh pl ov n 1p business or have any right or the foregoing, if requested in writing by the for or to bind the Partnership. Notwithstanding General Partner, each Limited Partner shall executein order to carrj' Soue athe Provisions of this ocuments reasonably deemed necessary or desirable by the General Partner Agreement. The exercise of any of the rights or powers of the Limited Partner pursuant to the terms of this Agreement shall not be deemed to be taking part in the affairs of the Partnership or the exercise of control over the affairs of the Partnership. e Section 4.2. Restriction of General Partn 'other than in Sectiont4.1) exp�ssly foregoing provisions of Section 4.1, except as otherwise e' permitted by this Agreement,the General Partner agrees that it will not take any hhe following prior actions, which may be given or withheld in the sole discretion of each party written consent of the Class A Limited Partner and the Class B Limited Partner: (a) Admit any new Partner to the partnership (other than as provided in Sections 8.3 and 9.3). (b) Cause the Partnership to merge with or into any other entity; or convert into another entity. is C:NOCCUME-lpr°nVDCALS-11TemAJ ATE-f.DOC 22 (c) Engage in any business unrelated to the Project, or own any assets other than those related to the Project or otherwise in furtherance of the purposes of the Partnership. (d) Amend the Partnership Agreement, except as otherwise provided in Article 13. (e) Sell the Project or any portion thereof without complying with the relevant provisions of Article 11. (f) Enter into any contract or agreement with, or pay any compensation to, an Affiliate of the General Partner or teartneinvaon of the provisions of Section 4.1(a)(ii) (excepah Class Limited permPartner by t Agreement). (g) Dissolve or liquidate th e Hof the assets o the Partnership), p (except as otherwise provided in Section 3.1(b), or following the sale of all or substantially all unless required by law. (h) Take any act in contravention of an express provision of this Agreement. f the Section 4.3. Additional Restrictiono PartnerwWithout limitationa action to enter into ing provisions restricting the authority of the Partners, anyleases or carry on any activities that would cause the rents received yo the artnSr d) of the in accordance with provisions to qualify as "rent from real property Code; or take any action that would adversely affect fethc Code.qualification of Kimco Realty Corporation as a"Real Estate Investment Trust" Section 4.4. General PartnesasTimer asonably requireds. The t fulfill thelGene a1 er shall devote whatever time, effort and skill Partner's obligations under this Agreement. The General Partner and any Limited Partner or any Affiliate of the General Partner or a Limited Partner may engage in any business or activity, including those which may conflict or compete with the Partnership or any partnership formed byGeneral Partner or an Affiliate of the General Partner, or any Partner ("Conflicting the and such Partner shall not be required to offer any opportunity in any business or Activity"), activity to such Persons or otherwise provide compensation to such Persons there or. eneral Section 4.5. General Partner's Lbbehalf�shall nottion. The be liable,Gesponsiblen or er, and all agents acting on its or the Partnership's accountable, in damages or otherwise, to t e Limite Partners ore the Pan es iP for doing to the act or failing to do any act, the effect of may partnership or the Limited Partners save and except or material and willful breach hat which arises from the General ch of its covenants ner's fraud,willful misconduct,breach of fiduciary duty and hold the and obligations under this Agreement. The Partnership shall indemnify, protect -..-- C:00CUME-1NavtlLLOCA15-lIIanD\LIATb-1.000 23 reasonable General Partner and any such agent harmless against whatsoever abysreason of any lace performed or attorneys' fees), losses, penalties and ]ability omitted to be performed by it in connection witl�t� business of the defense of hany Partnership, ct on bpased on including ny reasonable attorneys' fees incurred in connection be paid as incurred) to the fullest extent such act or omission (which attorneys' fees may the permissible under the Act. For purposes of Article faith 1 of the withrespect,to apcl claim if gtrhee 1 amhs General Partner shall not have acted in goo willful misconduct,breach of fiduciary attributable to or caused by such General Partner's fraud, duty or material and willful breach of its covenants and noblliigaited tiions u thender lu this Agreement. the The ip's General Partner's right of indemnification shall assets. Section 4.6. Powers and Duties of the Limited Partners. Subject to Section 9.3, the Limited Partners only shall have a right to vote upon the following: (a) the admission of an Additional General Partner; and (b) the admission of a general partner pursuant to Section 10.2. Section 4.7. Certificates and Instruments. (a) Each Limited Partner covenants and agrees that it will, within ten (10) days following request by the General Partner: (i) execute, swear to, acknowledge and/or deliver (A) allcertificates and other instruments and all amendments Agreement nt which the General Partner reasonably deems appropriate or necessary to form, qualify, or continue the qualification of, the Partni have limited p as a limited partnership (or a partnership in which limitedpartners liability)in all jurisdictions in which the Partnership may conduct business or own property in accordance with this Agreement; (B) all instruments which the General Partner reasonably deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement properly made in accordance with Sections 12.2 and 12.3 (whether or not such specific Limited Partner voted in favor thereof); (C) all conveyances and other instruments r orcuments which necessary totreflect,eral in Partner reasonably deemsappropriate accordance with this Agreement, the acquisition or disposition of all or any portion of the Project, the admission or withdrawal of any Partner and and liquidation of the Partnership; and (D) all instruments dissolutionin the t to and anyPartner pursuant relating to the admission or withdrawal of accordance with this Agreement; and (ii) swear to, represent or acknowledge, confirm, or ratify (if correct)that any vote, consent, approval, agreement or other action, which is made or given properly by the Partners hereunder or is consistent with cAnocvn¢-,wmuvocwu-M®rvnare-1.noc 24 s een or given (whether or the terms of this Agreement tedinfavor thereof or consented thereto).not such specific Limited Partner (b) Each Partner shall execute and deliver to the General Partner at the principal office of the Partnership, within fifteen (15) days after receipt d other the General P as artneis request therefor, such further designations, powers of attorney General Partner reasonably deems necessary to effectuate this Agreement and the purposes of the Partnership. Section 4.8. Development Fees. (a) In consideration of the performance of services set forth on Exhibit "D-1"hereto,in a first class,professional manner,the Partnership will pay to the General Partner a Development Fee in the amount of $500,000 payable in twenty-four (24) equal monthly installments beginning on the first day of the th on the first day succeeding firs f ea oh Gfnth l�e nextn h twenty- on-site construction activities commence on the Project andof three (23) months (provided that if the Project Cninallmentspletion nof suchate lDeve opment occur prior tFee shal be such twenty-four (24) month period, all unpaid due and payable within ten (10) days following the Project Completion Date. The fees above set forth to the General Partner are intended to be inclusive of all office overhead, in-office salaries, tel reproduction add addition the said fees the Gene pt al as otherwise expressly set forth in this Agreement); Partner may receive reimbursement for reasonable third party its sexpersonnel in connection with development of the Project, and for any non-affiliated s. (b) In consideration of the performance of services set forth on Exhibit "D-2" hereto, in a first class, professional manner, the Partnership will pay to the Class B Limited Partner Development Fees in the amount ot of f the monthOsucceeding the monthayable in in r whi h on4) - site monthlyinstallments beginning on the first day construction activities commencethat the Project and on the first day of each of the next ifthe Project Completion (23) months (provided Date shall occur prior to the all ai installments of such end of such twenty-four (24) month period, pthe Project Completion Date. Fee shall be due and payable within ten(1 ) daysfollowing The fees above set forth to the Class B Limited Partner are intended to be inclusive of all office overhead, in-office salaries, telephone, reproduction etro addition to d other similar costs (except as otherwise expressly sete°rth in this ve reimbursement for reasonable travel the said fees the Class B Limited Partner may and expenses of its personnel in connection either set forth in development Development of the r Budgetf approved by non- affiliated third party expenses the General Partner or are otherwise approved by the General Partner. Section 4.9. Management Fees. The General Partner (or any Affiliate the ent General Partner designates to manage the Project) eceive a from allmProjectl Tenants fee, p(whbch le monthly, equal to 4% of Base Rents actually collected C:\DOCITME-IyrvnVACA-5-IITanDWMITE-I.DOC 25 bookkee g services on behalf of management fee shall include in-house accounting and prnaranteed payments pursuant Partnership). The Partners agree that such fees shall be treated as to Section 707(c) of the Code. In addition, all iate n connect on with the businesnses and third s of th party expenses incurred by the General Partner o y Affil Partnership shall be reimbursed by the Partnership on demand. Section 4.10. Legal and Other Fees. Furthermore, in amplification and not in limitation of the provisions of Section 4.1 (a)(ii), the General Partner shall have the right to tion with reimburse K,imco Realty Corporation for services of its chars-house lawyers ed to other jointiventur sc(but there leasing or other Project-related work at scheduled ratesg shall be no reimbursement for services in connection with the drafting and negotiation of this Agreement). Section 4.11. Leasing Commissions. y (a) Except as expressly set forth in connection with execution of any Proect Affiliate of a Partner) shall receive any commission Leases, whether or not such Partner or any Affiliate thereof is the procuring cause of such Project Lease. (b) Notwithstanding the provisions of Section 4.11(a)however,with regard to any Project Leases,the Partnership shall pay a leasing commission(the "Leasing Bonus") to any employee or Affiliate (or employee thereof) off the Class i BELimi t d Partner designated by it as instrumental in procuring such Project Lease, H. (c) Further notwithstanding the provisions of Section 4.11(a), however, the General Partner (or any Affiliate it may designate) shall be entitled to a fee for any Project Lease in (or for any parcel of the Project, other than the Target Project Lease (orh$ 50 fis dor each rather than square foot of the amount of $.50 per square foot for each building area intended to be constructed on any sold parcel). (d) Any Leasing Bonus or commission to the an Part or ner off a lete ee andh regard to a Project Lease shall be payable (i) fifty (50%) percent upon (50%)fifty (ii) satisfaction or removal of all contingencies accepted possession of it epremises and commenced percent when the tenant has unqualifiedly p regular rent payments, and opened for business. the losing to the such Gens eral Partner or Affiliate for a sale under Section 4.11(c) shall be payable ed (e) If an outside broker is entitled to a under Exhibit H, then the Class and forward evidence of Partner shall pay same from the fee payable to itpayay such outside payment to the Partnership; or at the of such Partnership's tllfrom the amount dueethe Class B Limited Partner broker and deduct the amountpayment under Exhibit H. (f) Notwithstanding the foregoing,with outside Cl part$ass B s there Partner may not execute any Project Lease or brokerage agreement __ C:wo�n�-�auuVACA15"1\T®PWA9h-�.DDC - 26 arant Fee. if the Class A Limited Partner has personal liability Section 4.12. Gu___Y--- guaranteeing the Construction Loan, the under the Construction Loan, then in consideration eeforin the amount of one-half of one percent Class A Limited Partner shall receive a Guaranty r payable u on the Closing of (.50%) of the maximum principal amount of the Construction Loan, P Yble P the Construction Loan. purchase of Section 4.13. Sale Fee. Upon closing of a sle of the Project (or tartner shall receive Partnership Interest(s) in lieu thereof as set forth in Article 11), he General P a fee of$25,000 for its services in assembling marketing material and overseeing Closing. ARTICLE 5. DISTRIBUTIONS Section 5.1. Distributions Generally Subject m accotdancerwith thisovisions oArticle S and f Section 3.3, distributions of Partnership assets only shall be made Article 10. Section 5.2. Distributions of Net Cash Flow. (a) Except as otherwise expressly provided in Section 3.3, Net Cash shall be computed and distributed to the Partners,not less frequently than quarterly, Flow, if an y, in the following order of priority: (i) First, to the General � r andf vested Capital,s A dunt Partner,the ,.._ in proportion to their respective Unpaid Preference on their Invested Capital is reduced to zero; (ii) Second, to the Partners in proportion to their respective Percentage Interests. (b) The General Partner shall solely determine using di str reasonable a on ble (which judgment whether, and to what extent, Net Cash Flow shall be distributed ons shall be not less frequently than quarterlyas aforesaid) or shall be set aside and retained in a e or reserves for reasonable working capital reserve or reasonablecapital a shipandebtednesse, At such time as funds to be used for the payment or reduction ofY t the Partnership's Net Cash Flow is finally determined wi e tVrespe undistributed a pa tnshershipf fiscalany, year, the the partnership shall distribute to the Partners their re p Partnership's actual Net Cash Flow for such fiscal year, teal Net CashFlow distributions such fiscal year, er P Partnership exceed such Partner's distributable share of such 11 determined, such Partner shall immediately re Pa bte deducted from the next distributions t of sch finally by aPartnerm y excess, and any amounts not so repaid of Net Cash Flow or Capital Proceeds distributable to such Partner. rovided Section 5.3. Distributions of Ca ital Pha receipt of Capital Proceeds,s. Except as otherwise the same for in Sections 3.3, and 10.3, within thirty (30) days of er of P riority: shall be distributed in accordance with the following ord c�oan�-�vN�uouLs,T�d�� -i.noc 27 ll (i) First, to the General Partner and Class A Limited Partner, in proportion to their respective Invested Capital, until the Unpaid Preference on their Invested Capital is reduced to zero. (ii) Second, to the General Partner and Class A Limited Partner, in proportion to their respective Invested Capital, until their Invested Capital is reduced to zero. (iii) Third, to the Partners in proportion to their respective Percentage Interests. a final ui n f Section 5.4. Distributions Upon Final Liquidation. °Upongq distributedthe Partnership in accordance with Article 10, all of the Partnership's assets shall be as set forth in Section 10.3. Section 5.5. The Ri ht to Withhold. The Partnership shall withhold ing froz't on. any distribution such amounts as are required to amounwittsedisiributed laws the respe ctive tive Partners on Such withheld amounts shall be treated whose account the withholding was imposed. an Section 5.6. Distributions of 1 aIan Target rsim ents.sements andt anyhst di g er anything to the contrary set forth in this Article 5, y g monies paid by Target to the Partnership pursuant to the Target Contact or any otherbug e 11 be t with Target shall not be deemed or distributed en as Net e al Partnerhand Class A Limited Partner (subject to Flow or Capital Proceeds,distributed (as and when received) to the relevant provisions of Section 3.1(b)), in proportion to that at their the option of the General Partner Capital, in reduction of such Invested Capital; provided payment of Land all or a portion of same may, in lieu of being so distributed, be applied to Acquisition Costs and/or Site Development Costs. ARTICLE 6. ALLOCATIONS Section 6.1. In General. Profits and Losses of the Partnership shall be determined and allocated with respect to each fiscal year o of �edspuprsuant to Section 1.23 the end of such year and at such times as the Gross Asset Value ofany Subject to the other provisions of this Article 6,�e allocation of each iPtemnof income, gainer of a share ofPloss tand Losses shall be treated as an allocation of the s deduction that is taken into account in computing Profits or Losses. Section 6.2. Allocations of Profits and Losses. l ons (a) Allocation of Profits. Afihaler �be allocated to the Pving effect to the artners inl the provided in Section 6.4, Profits for any fiscal year following order of priority: c:�ocv¢- nuncNs ra vvr urF-i.00c 28 (i) First, to the Partners in the amounts that Losses were to on previously allocated to such Pofiats allocated toners pursuant sucheP iartne6rs O( ) until pursuant to the cumulative amount of Pr this Section 6.2(a)(i) is equal to the aggregate amount of Losses allocated pursuant to Section 6.2(b)(ii)for all prior fiscal years. (ii) Second, to the Partners, pro rata in accordance with the relative amounts to be allocated to each Partner pursuant ursuant to this Section 6.2(a)(ii), until the cumulative amount allocated to each Partner pursuant to this Section 6.2(a)(ii) for the current and all prior fiscal years is equal to the cumulative amount distributed to such Partner pursuant to Sections 5.2(a)(i) and 5.3 (i) for the current and all prior fiscal years plus the amount of any Losses previously allocated to such Partner pursuant to Section 6.2(b)(i) that were attributable to amounts previously allocated pursuant to this Section 6.2(a)(ii). (iii) Third, to the Partners pro rata in accordance with their respective Percentage Interests. ons (b) Allocation of Losses. After Abe allot t d to the Partners ing efct to the special l the set forth in Section 6.4, Losses for any fiscal year shall following order of priority': (i) First, to the Partners in the amount and reverse order of priority that Profits were allocated pursuant to Sections 6.2(a)(ii) and (iii) until the cumulative amount of Losses allocated pursuant tothisSecction 6.2(b)(i) is equal to the amount of Profit allocatedpursuant 6.2(a)(ii) and(iii) for all prior fiscal years. (ii) Second, to the Partners pro rata in accordance with their • respective Adjusted Capital Accounts. (c) Allocation of Profits and Losses in year of isu idatiOjectto or t Salee of Substantially All Assets. Notwithstanding Sections 6.2(a) and (b), but provisions of this Article 6, allocations of Pinfiwhi hdths Partnership sells or otherwisses (or if necessary, items se disposes f income, gain, loss and deduction) arising in the year t to of substantially all of its assets, and in ehpartriers in a mannear in which the r e�'�'�pto liquidates the extent possible, Article 10, shall be allocated among th ve cause each Partner to have a Capital Account balance ni que�dat on of the Partrierual to what such sl�up if liquidating been entitled to receive pursuant to Section 5.3p distributions were made pursuant to Section,5.3 rather than Section 10.3. ocated o Section 6.3. Limitation on All thte maximum amount of Lossesllthat cant b anyo Partner pursuant to Section 6.2 shall not exceed allocated without causing such Partner to have an Adjusted Capital Account Deficit at the end of c1DOCUME-IspwuLLOCA15—MernP\LIKTE—I.DOC 29 • -any fiscal year. All Losses in excess of the limitation set forth in this Section 6.3 shall be allocated to the other Partners,pro rata to the allocation of other Losses to such Partners. th e Section 6.4. Additional Allocation b Provisions.this Section 6.41 sh 1 beomaden� provisions of this Article 6, the special allocationsrequired ) the following order of priority: (a) Re�+�latory Allocations. (i) If there is a net decrease in Partnership Minimum Gain or Partner Minimum Gain during any fiscal year, the Partners shall be allocated items of Partnership income and gain for such year (and, if necessary, for subsequent years) in accordance with Treasury Regulation Section 1.704-2(f) or Section 1 .704-2(i)(4), as applicable. It is intended that this Section 6.4(a)(i) qualify and be construed as a "minimum gain chargeback" and a "chargeback of partner nonrecourse debt minim-um gain" within the meaning of such Regulations, which shall be controlling in the event of a conflict between such Regulations and this Section 6.4(a)(i). (ii) Any Partner Nonrecourse Deductions for any fiscal year shall be specially allocated to the Partner(s)who bear the economic risk of loss with respect to the Partner non-recourse debt to which such deductions are attributable. (iii) If any Partner unexpectedly receives an adjustment, allocation or distribution described in Treasury dome and gain shall bons Section e allocated, (5) or (6), items of PartnershipRegulation Section 1.704- allocated, in accordance with Treasury S 1(b)(2)(ii)(d), to the Partner in an amount and manner sufficient to eliminate, to the extent required by such Regulation, the Adjut is s Adjusted Capital p tal Account Deficit of the Partner as quickly possible. n income t this Section 6.4(a)(iii) qualify and be construed as a "qualified offset" within the meaning of Treasury Regulation 1.704-1(b)(2)(ii)(d), which shall be controlling in the event of a conflict between such Regulation and this Section 6.4(a)(iii). (b) Except as otherwise required by Section 6.3 and Section 6.4(a)(i) the General through (iii), but notwithstanding the other foregoing Po l05°deduction or credi this Article t shall equal at Partner's interest in each item of Partnership income, gain, least one percent(1%) of each of those items at all times during the existence of the Partnership. OC) , (ii) (c) The allocations set forth in Section 6.3, Sections 6.4(a)(i),iand (iii) and Section 6.4(b) (the "Regulatory Allocations") are intended to comply with certain Regulation Sections 1.704-1(b) regulatory requirements, including the requirements of Treasury gu and 1.704-2. Notwithstanding the provisions of Section 6.1 and 6.2, the Regulatory Allocations 30 shall be taken into account in allocating other items of income, gain, loss and deduction among the Partners so that, to the extent possible, the net amount of such allocations of other items and the Regulatory Allocations to each Partner shall beo equal to the net ions had not occurred.ntthat would have been allocated to each such Partner if the Regulatory • (d) In the event that the Code or any Treasury Regulations promulgated thereunder require allocations of items of income, gain, loss, deduction or credit s counsel or different from those set forth in this Agreement, upon to makece of the new allocations mpeliance upon accountants, the General Partner is hereby authorized nts, the Code, the Treasury Regulations deemed to be such amade purce of suante to thelp's fidu nary obligation ounsel or f the such new allocations shall be de General Partner to the Partnership and the Limited Partners, and no such new allocation shall give rise to any claim or cause of action by any Limited Partner. (e) Notwithstanding the foregoing provisions of this Article 6,income, gain, loss and deduction with respect to property contributed lat onstpromulea edsnunder Code Section ip by a Partner shall be allocated among the Partners, pursuant to gu 704(c), so as to take account of the variation,sset if any,between Value (computed hn ae ccordancejusted swith Section property to the Partnership and its initial Gross In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to Section 1.23(b), subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of the variation, if any, due ethe`Same msted annebasls of such under Codesset for federal Sect on 704(c) income tax purposes and its Gross Asset Value and the applicable Regulations, consistent with relat ng t requirements o the allocations of Section Opursu)ant)to this )(g) of the Regulations. Any elections or other decisions Section 6.4(e) shall be made by the General Partner e d in n ent on of thisy manner, in tAgreezne t� Allocations artner's sole discretion, that reasonably reflects the pure pursuant to this Section 6.4(e) are solely for purposes of federal, state d locals Carnal Account ore taxes and shall not affect,r orft in, any way ottheratax itemsen into ccount in orr distributions ting, any pursuant to any provision of this or share of Profits, Losses, Agreement. ARTICLE 7. BOOKS AND RECORDS; ACCOUNTING. TAX ELECTIONS e Section 7.1. Partnership Books. The b°oks basisof the n accordance rship shall with generaly maintained, for financial reporting purposes, on an accrual accepted accounting principles. All decisionsreasonable,accounting j oun ng matters shall be appropriately made by the General Partner in its sole,but Section 7.2. Records. The General Partner shall keep at the Partnership's office the following Partnership documents: (a) a current list of the full name and last known business or residence address of each Partner, together with the Capital Contribution and Percentage Interest of each Partner; 31 (b) copies of all certificates of limited partnership and executed copies of any powers of attorney pursuant to which other filings have been made; (c) copies of the Partnership's federal, state, and local income tax or information returns and reports, if any, for the six most recent tax years; (d) copies of this Agreement and all amendments to this Agreement; (e) financial statements of the Partnership for the six most recent tax years; and (f) the partnership's books and records as they relate to the internal affairs of the Partnership for the current and past three tax years. On reasonable advance notice to the General Partner, any Limited Partner shall have the right to inspect and examine any of the foregoing at the offices of the Partnership. Section 7.3. Partnershi Tax Elections Tax Controversies.providedfor in rsis The ethe Cora Partner shall have the right to make all elections for the Partnership including, but not limited to,the elections provided rtnernpurs ant to the requirements of Section on 754 of the Code. The General Partner is hereby designated as the"Tax Matters 6231(a)(7) of the Code and in such capacity shall represent the Partnership in any disputes, controversies or proceedings with the Service. Section 7.4. Fiscal l Year. The fiscal year of the Partnership shall be the calendar year. Section 7.5. Financial Reports. The General Partner shall prepare or cause to be prepared and shall furnish each Limited Partner as specified below or otherwise as soon as practicable the following(at the expense of the Partnership): (a) On or before March 31 of each calendar year, for the preceding year, the following: All information necessary for the preparation t bySeach deduction Liiteds Pr rtner of its credits and federal income tax return as to the Partnerships income, gains, the allocations thereof to each Partner, including a Schedule K-1 (or any other comparable form subsequently required by the Internal Revenue Service), and a copy of the federal income tax return of the Partnership, and any state or local income tax return required for the Partnership; (b) Within 60 days after the end of each fiscal quarter, quarterly unaudited profit and loss statements, balance sheets and related statements of retained earnings and cash flow (which unaudited statements shall be, to the General Partner's best knowledge, true, correct and complete); and _ C: nu oCA s „wPwMITE 1. 32 (c) Within 90 days after the end of each fiscal year, annual unaudited financial statements, including profit and loss statements, balance sheets, and related statements of retained earnings and cash flow. ARTICLE 8. TRANSFERS AND CBUMRANCES OF PARTNERS Section 8.1. Transfers. Except as may be expressly provided in its Partnership Article 8, no Partner (including the General Partner) may Transfer all or any portion Interest (or any right to receive distributions); except that a Limited Partner may transfer its Partnership Interest with the consent of the General Partner which may be withheld in its sole discretion. Any purported Transfer of any Partnership rshshaipl Interest null and(exceptv d as expressly permitted or consented to by the General Partner as aforesaid) Section 8.2. Permitted Transfers. Notwithstanding the restrictions on Transfers under Section 8.1, any Partner may transfer all or any part of its Partnership Interest to any Affiliate of the transferor Partner or to any other Partner. Upon any permitted transfer of a Partnership Interest pursuant to this Section 8.2, the transferor and transferee shall file with the Partnership an executed or authenticated copy of the written instrument of assignment to it. Any to it transferee under this Section 8.2 shall, asdtion�ooWedge effectiveness writing that the n�glitsno the of the economic benefits of Partnership Interest, Partnership Interest acquired by it are subject to the restrictions on Transfers set forth in this Article 8. Section 8.3. Substitution of Permitted Transferee for Partner. (a) A transferee of a Partnership Interest pursuant to Section 8.2 shall have no right to become a substituted Limited Partner with respect to the transferred Partnership Interest unless the following conditions are (i) the General Partner consents in writing to such admission, whichconsent may be or made subject to such conditions as are Generaldeterminyh Partner, in the General Partner's sole and absolute discretion; and (ii) the General Partner receives written instruments (including, without limitation, such Person's consent to be bound by this Agreement as a substituted Limited Partner) that are in a form satisfactory to the General Partner(as determined in its sole and absolute discretion). (b) Unless substituted for a Partner under this Section 8.3, a transferee or assignee shall have only the rights to receive the distributions of Net Cash Flow and Capital Proceeds and allocations of Profits and Losses (and items thereof) that the transferor or assignor Partner would have received but shall not have any other rights in or to the Partnership,including (without limitation)rights to vote on actions requiring the consent or approval of the Partners, or CADO -,Vnu„ate„TAW 1. 33 to inspect the books and records of the Partnership. All such rights shall remain with the transferor Partner. ARTICLE 9. ADDITIONAL PARTNERS Section 9.1. Admissions and Withdra Sections i;Person 9.3 shalall bed 10 dmi Except d to the as Partnership as a Partner except in accordance titled to withdraw from otherwise specifically set forth in Section 9.2(a), no Partner beshall en given,withheld the Partnership without the consent of neral determined by thener hGeneraltPartner, its sole and or made subject to such conditions of a absolute discretion. Neither the admission of cause thePartnersrhiphetAhney in accordance with this Agreement or not, shalluse the dissolution of purported admission, withdrawal or removal which is not in accordance with this Agreement shall be null and void. Section 9.2. Cessation of o the elarer to occur of one of thefollowing events:artner. The General Paner shall cease be the general partner of the Partnership up (a) the General Partner's withdrawal from the Partnership; (b) the filing of a certificate of dissolution, or its equivalent, for the General Partner(unless withdrawn,revoked or corrected within 15 days); (c) if an individual, the incompetence, insanity or death of the General Partner; or (d) an Event of Bankruptcy of the General Partner. Section 9.3. Admission of Additional General Partners, Excepts as set forth in the next sentence, no Person shall become a general partner of the Partnership a pp without outma the he written approval of(i) all Limited Partners and (ii)the General Partner, given or withheld, or made subject to such discretion. ns as are Inthe event ofanm ocd by the Currence applicable nllevent Partner, in such Partner's sole and absoluteas determined by a direction of a Majority described in Section 9.2 hereof, the Limited Partners er, in Interest of the Limited Partners)��lll be substantiallYiately psirrillar in formoint an Additional oand substance to the which Additional General Partner General Partner and the Partnership shall Partnership; pro�d,ut p�at with the Additional Partners General Partner as the general partner of the shall not be required to capitalize the Additional foregoing,General Partner if rtheth General Partner the value of which exceeds $100.00. Notwithstanding n withdraws or files a certificate of dissolution Ae of the Class A Limited Partner, the Class fifteen (15) days and is not replaced by an Affiliate Limited Partner shall have the sole right to appoint an Additional General Partner. c1DDNME-I'p+,rNACAIS-INT.p\umITE-1.Doc 34 ARTICLE 10. DISSOLUTION AND WINDING UP Section 10.1. Dissolution and Distributions of Proh ty.Ge l Except for Partner(i)herein,les of and all or a portion of the Project pursuant to the authority granted toe (ii) dissolution expressly permitted by this Agreement, no Partner shall have the right to, and each Partner hereby agrees that it shall not, seek to dissolve or cause the dissolution of the Partnership or to seek to cause a partial or whole distribution or sale of the Project, whether by tion or court action or otherwise, it being agreed that any actual or attempted dissolution, sale would cause a substantial hardship to the Partnership and the remaining Partners. Section 10.2. Dissolving Events. This Partnership shall be dissolved upon the earlier to occur of one of the following events: (a) the first occurrence of any event set forth in Section 9.2; provided, however, that upon the written vote of a Majority in Interest of the Limited Partners (subject to the last sentence of Section 9.3) within sixty (60) days after such event, a Majority in Interest of the Limited Partners (A) may elect in their sole and absolute discretion to continue the Partnership and (B) may admit one or more new general partners to continue the Partnership; and provided further that if a Majority in Interest of the Limited Partners fails to elect to continue the Partnership and admit a new general partner within such 60 day period, the Class B Limited Partner shall have a further 10 day period within which it alone may elect to continue the Partnership and admit a new general partner to do so. (b) upon the sale, transfer or disposition of the entire Project and all interests of the Partnership therein; (c) upon December 31, 2050; (d) the happening of any other event causing its dissolution under the Act; or (e) at the option of the General Partner under the circumstances set forth in Section 3.1(c)or 3.1(d). Notwithstanding anything contained herein to the contrary,to the extent permitted by applicable law, the Partnership shall not dissolve or merge with or into any other entity, or convert into another form of business entity, or otherwise terminate, and the Partnership shall continue (and not dissolve) for so long as a single solvent general partner exists. Notwithstanding anything contained herein to the contrary, to the extent permitted by applicable law, a Bankruptcy Event respecting the Partnership shall not cause a dissolution of the Partnership. Section 10.3. Li uidation and Final Distribution Proceeds. (a) Upon the dissolution of the Partnership pursuant to Sections 10.2(a) through (d), the Partnership shall thereafter engage in no further business other than that iDOCUME—Dpmuu.00AIS-DremAUMITE-I.DOC • 35 which is necessary to wind up the business, and the General Partner shall liquidate all or a portion of the Project and any other Partnership assets and distribute the cash proceeds therefrom, and any other assets of the Partnership. The cash proceeds tr he liquidation thf Partnership assets, and any other Partnership assets, shall be applied Partnership in the following order: (i) First, to the creditors of the Partnership (including, inc i g,y law)without limitation, Partners who are creditors to th e t permitted in satisfaction of liabilities of the Partnership other than liabilities for distributions to Partners; and as reasonable reserves therefor. (ii) Second, any balance to the Partners in accordance with the positive balances in their respective Capital Accounts, determined after taking into account all Capital Account adjustments for the Partnership taxable year (including, without limitation, those made pursuant to Article 6, as appropriate) during which such liquidation occurs, such distribution to be made by the end of the taxable year in which such liquidation occurs (or, if later,within ninety(90)days after the date of the liquidation). Notwithstanding the foregoing provisions of Section 10.3(a)(ii), in the event of a dissolution pursuant to Section 3.1(c) or 3.1(d), the relevant distribution provisions of Section 3.1(b) shall be applicable. (b) The General Partner may apply or distribute non-cash assets of the Partnership upon final liquidation and such net of any liabilnon-cash assets ities secured valued by such their property that value, as determined by the General Partner, the distributee is considered to assume, or take subject to. Section 10.4. No Capital Contribution U on Dissolution. (i) Each Partner shall look solely to the assets of the Partnership for all distributions with respect to the Partnership, its Capital Contribution thereto, its Capital Account and its share of Profits or Losses, and shall have no recourse therefor (upon dissolution or otherwise) against the General Partner or any Limited Partner; and (ii) if, upon liquidation of the Partnership or upon liquidation of a Partner's interest in the Partnership, a Partner has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all taxable years, including the year during which the liquidation occurs), such Partner shall not be obligated to make any capital contribution with respect to such deficit. ARTICLE 11. SALE OF THE PROJECT Section 11.1. Marketing of Project. Following the Projecto Completion o 1pmay market(he "Marketing Period"), the. General Partner and the Class B _- \DOCUME-I‘prmALOCALS-11Thop\LIMITE-1.DOC. 36 • Project for sale to third party purchasers; provided that (i) the General Partner shall, in its sole discretion, decide whether or not to use the services of an outside broker, and (ii) the Class B Limited Partner shall have no authority to bind the Partnership in any manner to a brokerage agreement, letter of intent, or contract of sale. Section 11.2. Purchase by Partner or Affiliate. In the event that during the Marketing Period either the General Partner or Class B Limited Partner (for purposes of this Section 11.2 the "Offer Partner") shall receive a bona fide all cash offer from a non-affiliated third party to purchase the Project it is willing to accept, it shall so notify the other Partners (the "Offer Notice") and thereafter either of the Class B Limited Partner or General Partner which is not the Offer Partner (hereinafter referred to as the "Other Partner") shall have the right, at its sole option, to elect either of the following courses of action on notice to the Offer Partner given within twenty (20) days of receipt of the Offer Notice (provided that if the Other Partner does not give such notice of election within such twenty (20) day period, it shall be deemed to have elected option (a)below): (a) it may consent to the sale, in which event the General Partner shall and is hereby authorized to use diligent, good faith efforts to enter into a contract of sale - substantially in accordance with the terms of the Offer Notice and consummate the sale in accordance therewith; or (b) it may elect to purchase (or designate an Affiliate to purchase) the entire right, title and interest of the Offer Partner in and to the Partnership, including without limitation all rights to receive distributions of Cash Flow and Capital Proceeds following the date of consummation of the purchase (the "Partnership Interest") for a price (the "Partnership Purchase Price") equal to the amount the Offer Partner (provided that if the General Partner is the Offer Partner, then for purposes of the remainder of thisand the Class A Section ro the Partner) Partnerr shall be deemed to mean, collectively, the General Partner would have received had the Partnership sold the Project in accordance with the terms of such offer, and then liquidated and distributed net proceeds (i.e., net of what would have been any broker commissions, transfer taxes, title fees and other costs paid by the Partnership as seller under such offer and net of amounts required to pay any Construction Loan in full) in accordance with the terms of this Agreement. The closing of any purchase of Partnership Interest pursuant to this Section 11.2(b) shall occur within thirty (30) days following the:election to purchase by the Other Partner. At such Closing, the Other Partner shall pay the Partnership Purchase Price by wire transfer of federal funds to the Offer Partner, and upon the making of such payment: (i) the Partnership Interest of the Offer Partner(s) shall thereupon be and be deemed assigned, conveyed and transferred to the Other Partner (or its designee in its notice), without the necessity of any further documentation (but all Partners nevertheless agrees to execute any documents reasonably requested by any Partner to evidence or further effectuate such transaction), (ii)the Other Partner (or such designee) shall thereupon be deemed to have purchased the entire right, title and interest of the Offer Partner(s) in and to the Partnership; and (iii) the Offer Partner(s) shall thereupon be deemed to have withdrawn from the Partnership, shall Partner;e no provid der that�notwithstanding the ts therein or claims thereto and shall no longer be or be deemed a -.j C:,DOCUME-Iymm\LOCHS-11Tm,WAifh-1.000 37 foregoing, the Offer Partner(s) shall be entitled to receive all distributions and allocations under such Articles 5 and 6 which have accrued prior to the date of such withdrawal. Notwithstanding the foregoing, however, if the Other Partner is the Class B Limited Partner, at such closing of purchase of the Partnership Interest it strut, as Condition fullusingclosing, and hereby agrees to, under such circumstances (x) pay any Construction its own funds, not Partnership funds, and (y) cause the lender under the Construction Loan to release the Class A Limited Partner from all liability under its Guaranty. If the Class B Limited Partner fails, after having elected to do so, to consummate the purchase of the Partnership Interests of the General Partner and Class A Limited Partner fully in accordance with this Section 11.2(b) (including without limitation payment of the Constl ction Loan ann torelease and not the Class B Limited Partner from the Guaranty thereof as ofer ); o in additio the Class B Limited t in limitation of any other rights and remedies by reason of such default, Partner shall have no further rights under this Section 11.2 and the General Partner shall be free to sell the Project on such terms as it deems appropriate without requirement of any consent from the Class B Limited Partner. ARTICLE 12. REPRESENTATIONS AND WARRANTIES OF PARTNERS Section 12.1. To induce the General Partner and the Class A Limited Partner to enter into this Agreement, the Class B Limited Partner hereby represents,warrants and covenants as follows to the Partnership and each other Partner: (a) With respect to the Contract: (i) Same is in full force and effect and has not been modified oramended, and notices related thereto have een executed, delivered or correspondencevers relating to rights thereunder or material or received; except as otherwise set forth on Exhibit"E;" (ii) Neither the Class BaPartner ved any noticesAffiliate of default assigned or encumbered same or given or rec from any other party thereto; (iii) The Class B Limited Partner and/or any y Affiliaormed te actions same have paid all amounts and fully properly P required to be paid or performed by it thereunder up to the date hereof; (iv) The last day of the Inspection Period is November 30, 2003, and the Closing Date is currently scheduled for no later than July 15, 2004; (v) The Class B Limited Partner has full right, power and authority to assign same to the Partnership without requirement for the consent of any other party thereto or any other Person (or has obtained any such consent prior to execution of this Agreement). _� cmcv -,�� nT�nweure-,.noc 38 (vi) Material correspondence with Seller relating to title and survey, including an objection letter timely made pursuant to Sections 4 and 5 thereof, is annexed as Exhibit G hereto. (b) The Target LOI is in full force and effect and has not been modified or amended. (c) With respect to the Project Rights: (i) to the best of the Class B Limited Partner's knowledge, all of same, together with any amendments, modifications, waivers or material correspondence thereof or relating thereto, are listed in Exhibit c,F,,. (ii) to the best of the Class B Limited Partner's knowledge, each of same is in full force and effect, to its best knowledge, and neither the Class B Limited Partner nor any Affiliate has assigned or encumbered same or given or. received any notices of default from any other party thereto; (iii) to the best of the Class B Limited Partner's knowledge, the Class B Limited Partner (and/or any Affiliate holding any of same) has paid all amounts due as of this date, and fully and properly performed l actions required to be paid or performed by it under each of same up to the date hereof; and (iv) The Class B Limited Partner (and/or any Affiliate holding any of same) has full right, power and authority to assign its interest in each of same to the Partnership without requirement for the consent of any other party thereto or any other Person; (d) To its actual knowledge, there are no other leases, contracts, agreements, commitments, expenses or obligations relating to the Project that would be binding on or obligate the Partnership other than the Contract, the Target LOI,the Project Rights and any other matter of record set forth in title reports for the Land heretofore delivered to the General Partner. (e) To its actual knowledge, all written reports regarding the Project heretofore delivered to representatives of the other Partners are true and correct in all material respects, and do not omit any material facts needed to make same not misleading or incorrect. (f) It has been duly formed and is a validly existing corporation in the is State of Nebraska,in good standing, and with power persons execute andhent imstexd ecuting hs Agreement and perform all its obligations hereunder. Limited Partnership Agreement and all assignments contemplated hereby on its behalf have the TOCUME -1p.nuocas nTmmpwMITE-,.DOC 39 ' power and authority to enter into this Limited Partnership Agree ment. The execution, delivery ates, has been duly and lidly and performance of this Agreement by authorizedit anand such Affiliate.d each of its ffil This Agreement has been duly by all necessary action of it executed and delivered by it and constitutes a legal, valid and binding obligation of the Class B Limited Partner, enforceable against it in accordance with the terms hereof. (g) It has obtained all consents required to enter into and perform this Agreement required under any partnership agreement, shareholder or other a agreement, agreement limited conce liabngility company agreement, covenant, charter, declaration of trust, to or lations or any judgment, to which it is a party or which is binding upon it or by any law or re order or decree of any governmental body, agency or court having jurisdiction over it. (h) Neither it nor any Affiliate has received notice from any n of governmental authority or other Person that any portion of the to disc strenly in vi atinosuch environmentalany zoning, or other land use regulations, and notice has been issued,except any such notice issued in relation to the Environmental Condition. (i) There is no pending litigation brought by or against it or to its actual knowledge affecting in any manner the Land or the Project. (j) It is not aware of any special assessment or change of use or back" taxes or concurrency fees that are now or may hereafter be assessed on any portion of roll , the Land. (k) Neither the execution and delivery of this Agreement nor the or consummation of the transactions herein contemplated dpassing conflict ime, or both)lt in a a default under,reach or constitute (with or without the giving of notice or instrument, license or undertaking to which otherwise adversely affect any contract, agreement, the Class B Limited Partner or any of its Affiliates is a party or by which it or any of them or any of their respective properties or assets is or may be bound or that relates to the Project in any respect. (I) It is neither a"foreign person"within the meaning of Code Section 1445(f)nor a"foreign partner"within the meaning of Code Section 1446(e). • (m) Neither it nor any of its Affiliates have dealt with any broker or finder in connection with the transactions between the parties hereto contemplated by this Agreement. (n) All expenses listed in Exhibits C-1 and C-2 have heretofore been paid in full by the Class B Limited Partner, and the Class B Limited Partner will furnish paid invoices evidencing the foregoing on request. (o) All representations and warranties of the Class B Limited Partner hereunder that are stated to be "to its best knowledge" or words of similar effect shall mean to ' 1 1 the current, conscious and good faith knowledge of Robert Woltemath and James Otis, and does not include any constructive knowledge. ll defend, The Class B Limited Partner hereby agrees to and less from and against loss or damage d hold the Partnership and each other Partner harm representation,agcaused by or accruing from a material breach by the Class B Limited Partner of any warranty or covenant made by it in this Agreement. Any such indemnified loss or damage shall be limited to actual out-of-pocket losses and expenses, and shall not include lost profits; except that in the event of a knowing, deliberate breach, such limitation on loss and damage shall not apply.. Section 12.2. To induce the Class B Limited Partner to enter into this Agreement, the General Partner and Class A Limited Partner each hereby represents, warrants and covenants as follows to the Partnership and each other Partner: • (a) It has obtained all consents required to enter into and perform this Agreement required under any partnership agreement, shareholder agreement, limited liability company agreement, covenant, charter, declaration of trust, or other agreement concerning y it to which it is a party or which is binding upon it or by any law or regulations or an judgment, order or decree of any governmental body, agency or court having jurisdiction over it. (b) There is no pending litigation brought by or against it relating to the Land or the Project. (c) Neither the execution and delivery of this Agreement nor the consummation of the transactions herein contemplated will conflict with,result in a breach of or constitute (with or without the giving of notice or the passing of time, or both) a default under, or otherwise adversely affect any contract, agreement, instrument, Iicense or undertaking to which it or any of its Affiliates is a party or that relates to the Project in any respect f their respective properties or assets is or may be bound (d) It is neither a"foreign person"within the meaning of Code Section 1445(f)nor a"foreign partner" within the meaning of Code Section 1446(e). (e) Neither it nor any of its Affiliates have dealt with any broker or finder in connection with the transactions between the parties hereto contemplated by this Agreement. The General Partner and the Class A Limited Partner each hereby agrees to and shall defend, indemnify, and hold the Partnership and each other Partner harmless from and against any loss or damage caused by or accruing from a material breach by the General Partner or the Class A Limited Partner of any representation, warranty or covenant made by it in this Agreement. Any such indemnified loss or damage shall be limited to actual out-of-pocket losses and expenses, and shall not include dean lost st profits;oe shall cept not that in the event of a knowing, deliberate breach, such limitation C:VIOCUM E-1WwtlUDCALS-MampVJMITE-I.DOC 41 Partner to the other Partners and the Partnership), then as of the third business day after the date e on ce so mailed (also an "Effective Date"); or (iv) if sent byer h P)to the ile bPartnership,ject to gthe Genera] from any Partner to the other Partners and the P�n Partner, or the Class A Limited Partner �esori W�ch the appropriate electronic, or to the Class B nconfirmation of Partner at 402-397-1579, then either (x) as of the date receipt is received by the sending party between 9:00 a.m. and 5:00 p.m. (receiver's time) on any business day or (y) as of the next business day if the er 5 00 p thee of m (ppeiverase electronic time) (both confirmation of receipt is received by the sending party also an "Effective Date"). Copies of any notices to the Class B Limited Partner shall be sent, in the manner set forth above, to, Koley Jessen P.C., L.L.O., 1125 South 103 Street, Suite 800, Omaha,Nebraska 68124,Facsimile: 402-390-9005). Section 13.6. Waivers. No waiver by any Partner of any default with respect to any provision, condition or requirement hereof shall be deemed to be a waiver of any other provision, condition or requirement hereof; mr shall air theaexey ac se of any such rightelay or omission of �c�-�ng Partner oto it exercise any right hereunder in any mannerP hereafter. Section 13.7. Preservation of Intent. If any provision of this Agreement is determined by any+ court having jurisdiction to be illegal or in conflict with any laws of any state e nt ly or jurisdiction, then the Partners agree that such provisiono shall1 c be modified fied t If ang one or legally possible so that the intent of this Agreement may legally circumstances, is held invalid, the provisions contained herein, or the application thereof in an cir the validity, legality and illegal or unenforceable in any respect or for any reason, enforceability of any such provision in everyaffected, it being and other respect intended that all of th of the remaining e shall not be in any way impaired or rights and privileges shall be enforceable to the fullest extent permitted by law. Section 13.8. Entire Acz rent. This Agreement grem nthe is s forth the bject matters entire and only agreement or understanding between the Partnersrelating esentations supersedes and cancels all previous agreements negotiashall be ons bound by any nts conditions�,rdefinitions, in respect thereof among them, and no Partner warranties or representations with respect to the subject matter of this Agreement. les or her Section 13.9. Certain Rules of Con struction.and they shall1 not be deemedicle or Section tpart of this captions in this Agreement are for convenience only, provisionst ofthi Agreement and in no way define, extendlimireuire (i)or aescribe the scope or intent of any term has the meaning assigned to it; (ii) an hereof. Unless the context otherwiseq ce with accounting term not otherwise defined has the or�meaning exclusgilve; (iv)ed to 1 words in the singular - generally accepted accounting principals; (iii) include the plural, and words in the plural include the singular; (v)provisions apply to successive events and transactions; (vi) "herein" "hereof' and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; (vii) all references to "clauses," "Sections" or "Articles" refer to clauses, Sections or Articles of this Agreement; and (viii) and any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms. ,Do(.ZmE-t .,AwcALS-I,Temp m3TE-1.DOC 43 may be executed Section 13.10. Coun�S• This A final buttall of which shallconstit to one and in any number of counterparts, each of which shall be deemed an original, the same instrument. Section 13.11. Governine, Law. This Agr Bement shall be governed by and construed in accordance with the laws of the State of Nebraska. [Signature Page Follows] • c:\Docvn+E-Pp„mu.ocnis-nTeo\LIMITS-1.00c 44 IN WITNESS WHEREOF, the Partners have caused this AgBement to be duly executed by their respective and duly authorized representatives as of the date first above written. GENERAL PARTNER: KD OMAHA 1103,INC.. CI By. Name: M.M. Kauderer Title: vice President CLASS A LIMITED PARTNER KCO DEVELOPERS, rNC. .\(;‘) Name: Bruce M. Kauderer Title: Vice President CLASS B LIMITED PARTNER: WOLTEMATH-OTIS DEVELOPMENT,INC. Name:9 Q ii J- 00 � � •'°' Title: rft`�S.(C�'�n ' EXHIBITS A Legal Description of Shopping Center Parcel B Site Plan C-1 Post-Target LOI Expenses of Class B Limited Partner C-2 Pre-Target LOT Expenses of Class B Limited Partner D-1 Development Services of General Partner D-2 Development Services of Class B Limited Partner E Disclosures re Contracts g Project Rights G Title and Survey Correspondence H Leasing Commissions CADDCUME—Ibr°nLLOCA1S-I17aopUMITE-f.DX 46 ♦ 1 EXHIBIT A Legal Description of Shopping Center Parcel A portion of the E '/A of the NE % and a portion of the NE '/4 of the SE ' , all in Section 35, T16N, R12E of the 6th P.M., Douglas County, Nebraska, being more partiicularl 021 34'48ibed as follows: Beginning at the Southwest Corner of said E 'A NE %; thence N2645.25 ft. on the West line of said E'/z NE %4 to the Northwest corner of said E 'A NE '/4; thence N 87'23'07" E, 387.96 ft. on the North line of said E '/z NE % and the Southerly right of way line of Northwest connector highway; thence Southeasterly on a 934.25 ft. radius curve to the right, 318.15 ft. (long chord bears S 51'52'33" E, 316.62 ft.) on said right of way line; thence S 42'08'03" E, 281.76 ft. on said right of way line; thence Southeasterly on a 870.21 ft. radius curve to the left, 223.11 ft. (long chord bears S 49'26'47" E, 222.50 ft.) on said right of way line; thence S 33'01'43' W, 9.95 ft. on said right of way line; thence Southeasterly on a 880.21 ft. radius curve to the left, 322.58 ft. (long chord bears S 67'19'39" E, 320.78 ft.) on said right of way line to the West right of way line of 72nd Street; thence S 02'36'09" E, 599.54 ft. on said West right of way line; thence continuing S 02'37'50" E, 1320.51 ft. on said West right of way line; thence S 02'32'51" E, 379.99 ft. on said West right of way line; thence S 42'05'44" W, 21.21 ft. to the North right of way line of Crown Point Avenue; thence S 87'13'30"W, 1241.18 ft. on said North right of way line to the West line of said NE % SE 1/4; thence N 02'27'55" W, 394.65 ft. on said West line to the point of beginning, containing 79.47 acres more or less. Together with all improvements located thereon other than discharge lines, monitoring wells, extraction wells and treatment systems relating to the Remediation, title to which shall remain with Seller. 228359.3 EXHIBIT B Site Plan _ . 2 228359.3 • 1 71,7-2 fr , 4, . — !l'Ii:��s' :. e�fIHHHIHHHHHHItt � ('�' —1:141 . q '11 sHHIHHIHHIIHIINIH '1 rI' ;IE ' i . • ,. 7 I�4fHHHIHflHHHIH :, .: ,/_. e •- d 61H0HHtHHlhI1l .•! 6 S "' PIE i // �HHHIHHHHHHHf� A ` n 1111 r. S1' i . ./" , i fijo le 9HIIIHIHHHISI ; ,„ t r • / i • ° // } 1 tHHHIHHHIl 4 // a - a1HHIHH 91114{1101H1E i 11 -- 11 -� q 9fNH►H114��HHHfHHHHf i ` ---_ i �� 'I 7. eIHNINligi 3HfNfHNllff{HHfHf 6 .�111; 8}HHHIHH+ 21HHHHIHHHHHHHO i,-, R � - ' k r :Lir-,--LL...r.m"----:!..1::•'14.--f----44;:b417147:1-47-\ "—'.s— . IRV r'illira r. -----,:,. I 1 '1 LA_ R.1/ BHHHHH3HI yp -- ill! — I i Its 11 o a-HI:11111? }HHHHIHHHHHHfHHI I s ° -- 1 _, \:,11 •Calgri u Ie��H+HHfHIHfHfIHHHHH} r t1; :**1 • I I _ HHHHl�f4{}{HH}I}H{ IIIIIIH{H t -- 41kIRHH}1 II I I EHIIHHHHH4�H4flHHfHIHIHfHHIHI� v',i. �/ I I r r r r " a k�~ eHHH„Hl�,tel _ tto$E . 9i01616 . I 1 t 8 i t t E g t g I r ;BHI ffilO OHHi MIHHff E0 ! -A i t r it ; a - taµ{a 3111I1fHHf ffIRIHO ---; s R9999 999999 9 rrrrr♦II a - ,r- --3 ! ,. g e E t 5dEC : ntil i 1 1 i i i % t 1 1 t 11 ill ' e+ `:4 ir , • g .. . u W . - u - s tt c it 4, t MEYER c AssocwTEs,I'C EXHIBIT "B" r 6( 'SORENSON PARK PLAZA" 1 f woL EMKIN-OTM DEVELOPMENT.INC.. �t�+ j _ 0. , I EXHIBIT C-1 1 W3 D/03 Sorenson Park Plaza,Omaha,NE Recap of Expenses Post Target LDI • Invoice Date Invoice N Amount CTI Codes 405000 Earnest Money 405000 Earnest Money 8.25.D3 595295 6,091.06 . 4221000 Haley&Aldrich,Inc 3 595295 16,09 .01 4221000 Haley&Aldrich,Inc 1 15.05.0 3 597877 13,30B.73 4221000 Haley&Aldrich,Inc 7 9,997.00 4221000 Thiele Geotechnical,Inc 9.17.0371 7067 3,000.00 4221000 Thiele Geotechnical,Inc 9.30.03 569 08 3,000.00 4221000 Kirkham Michael Consulting Engineers10 • 57,703.00 10.22.03 56927 38,054.60 4221100 Kirkham Michael Consulting Engineers 36,054.60 10.15.03 3100 9,134.50 422170D Meyer&Associefes 9,134.50 10.22.D3 56926 16,000.00 4222400 Kirkham Michael Consulting Engineers 16,000.00 B.15.D3 100 6,094.76 4223000 Fullenkamp,Do e,&Jobeun B.15.03 100 6,094.76 4223000 Fullenkamp,Do e,&Jobeun 9.15. 300 4,060.008 4223000 Fullenkam ,Do e,&Jobeun 10.21.030.20 1 300 ,060.00 4223000 Kole Jessen, PC(Least expenses tram 7/15/03 thru 7/31/03 9 8.03 1 4,446.0257 4223000 Kolev Jessen, PC 9.8.0 3 100119101097 14, D6.02 4223000 Kole Jessen, PC 1010.8.03, 101743 9,497.78 4223000 Kole Jessen, PC 10.28.03 4721-003 (8,262.50 4223000 ,Kole Jessen, PC(Credit Memo 39,777.24 1 9.16.03 201586 462.50 42239DD Woltemath/Otis Develo ment(CPR Mtg.-Bob Wottemath) 6.03 201586 462.50 4223900 Wollemath/Otis Development(CPR Mto.-Jim Otis 9.1 9.16.03 512703053 61.5 42239D) W oltemath/Olis Develo ment CPR Mt.-Jim Otis 4223900 4223900 1,006.66 4223990 ( i 1 1 s 1 s7s.oz 11 61 s76.02 I LTOTAL PROJECT COSTS • • EXHIBIT C-2 11/05/03 I Sorenson Park Pteza,Omaha,NE • Recap of Expenses Pre-Target LOt Invoice Date Invoice# Amount CTICode= 1DD,ODD.OD 405000 Eames!Mone Paid 4.21.03,Check f11362 100,000.00 3.7.03 93919 3,421.68 4223000 Kole Jessen, PC 4.8.03 94934 6,773.09 4223000 Kole Jessen, PC' • 5.8.03 94934 6.773.09 4223000 Kole Jessen, PC 6.9.03 95949 1 4223000 Koley Jessen, PC 6.9.03 98039 9,013.26583.26 4223000 Kole Jessen, PC 8.9.03 1017 580.16 . 4223000 Kole Jesson, PC(LeOal a enses rior to 7/15/03 11 5.03 4721-003 (286.50) 4223000 Kole Jesson, PC(Credit Memo 28,198.29 -- 126,198.29 128,198.29 TOTAL PROJECT COSTS • • • it EXHIBIT BIT D-1 DEVELOPMENT SERVICES OF GENERAL PARTNER As a part of the Development Fee to be paid to the General Partner, the General Partner shall perform the following services: 1. Site Plan. General Partner has reviewed and approved the development plan of the Property (the "Site Plan") and prepared and submitted by Class B Limited Partner. The General Partner shall review on a monthly basis any requested modifications made to the Site Plan and provide any comments Piapproval P shall mof odifjethe Site Plan to n approval by the reflectthe approved Partners angesf any changes to the Site Plan, the General 2 Budget. General Partner shall provide Class B Limited Partner any comments and/or approval of any requested modifications to the Budget. 3. Schedule. General Partner shall review and provide Class B Limited Partner any comments and/or approval of any requested modifications to the Schedule. ic site s to as 4, Site Visits. thew workal . In nonhall make event shall theseovisits be lesstfrequ frequent than one Project (1) necessary to review the progress of time per month. 5. Books.Records Accounts and ProcessingPa ment Reouests. The General Partner shall use reasonable diligence in keeping at the principal office of General Partner full,true,correct and complete books of account and business records in which transactions of the Project shall be entered. These accounts and records shall be kept by General Partner in a manner consistent with generally accepted accounting principles and practices. Such books shall be open at all reasonable times for inspection or copying by either party or its authorized representative. General Partner shall prepare on a monthly basis and submit to the Partners cost reports detailing costs incurred to date on the Project. 6. Contracts. General Partner shall execute all contracts in conjunction with the Project. 7. Develo ment Operations and Decisions. General Partner shall be authorized to and th e shall make any and all necessary may operatingons in nection Class BlLi ml'ted Partrlernt and development of the Project,except for such as 8. Tenant Negotiations. General Partner shall provide Class B Limited Partner assistance in all aspects of the Development. General Partner shall assist Class B Limited Partner in negotiating Tenant letters of intent, marketing of the Development, negotiation tenant leases. General Partners shall make periodic jobsite visits to review progress of the Project. Class B Limited Partner shall provide General Partner copies of all letters of intent for General Partner's approval. General Partner shall prepare all leases,brokerage agreements and contracts on General Partner's standard form, except major tenant leases. General Partner shall be responsible for coordinating legal review of all documents with the assistance of Class B Limited.Partner. General Partner will execute all leases,brokerage agreements,and contracts for the Project. CADocuments and Settings\BKauderer\Local Settings\Temporary Internet Files\ol.r:5\EXI-1IDIT D-3 development services of genr partner- 1 EXHIBIT D-2 DEVELOPMENT SERVICES OF CLASS B LIMITED SERVICES As a part of the Development Fee to be paid to the Class B Limited Partner, the Class B Limited Partner shall perform the following services: 1. Site Plan. Class B Limited Partner has prepared a plan for development of the Property (the"Site Plan") and submitted such Site Plan to General Partner which plan has been approved by General Partner. The Site Plan accounts for the existing physical conditions, including topography, environmental constraints,proximity of utilities, title and boundary issues and other matters related to the physical conditions of the Property. The Site Plan reflects in the reasonable estimation of Class B Limited Partner,building footprints,which are leasable in the area of the Property. Class B Limited Partner shall on a monthly basis mark up a Site Plan and present it to the General Partner identifying any requested changes which are needed to the Site Plan. 2. Budget. Class B Limited Partner has prepared a cost proforma ("Budget") for the Project based on format provided by General Partner,which will provide an estimate of the Project Costs to be incurred for the Project, including but not limited to identifying estimated building costs including tenant improvement allowances, sitework costs including clearing, grading, utilities,paving, landscaping, irrigation,signage,site amenities,etc,also included are land costs,closing costs,architectural,engineering, permits, impact fees, legal, real estate taxes, leasing commissions, estimated rental incomes, land sale prices or ground lease costs. The Budget shall be updated and submitted to the General Partner on a monthly basis for General Partner's approval. 3. Schedule. Class B Limited Partner shall prepare a project schedule (Schedule) identifying the time frames for completing the approval process of the Project. The Schedule shall clearly identify the critical path for completing the Project. The Schedule shall be updated on a monthly basis. 4. Bi-Viteeldy Progress Reports. Upon commencement of such construction, Class B } Limited Partner shall attend weekly progress meetings with the contractor to coordinate the work of the Project. Class B Limited Partner shall be responsible for preparing and distributing meeting minutes of all Project meetings. Class B Limited Partner shall prepare and submit to the General Partner a bi-weekly progress report, which shall detail (i) potential tenant progress including leases, proposals and active tenants in a form which shall be provided by the General Partner, (ii) the then-current status of planning and development,and(iii) daily construction field reports from the Contractors. S. Monthly Progress Reports. Class B Limited Partner shall prepare and submit to the General Partner monthly progress reports and site progress photos which shall set forth in reasonable detail ,(ii) theP then-current status tofo date planning,development (iii)any recommended the updates to theProforma,(ion of v) an the Project costs incurred to da updated graphic outline of the Schedule,and (v) a list of outstanding development issues and/or costs,(vi) updated cost tracking and project tracing reports in forma provided by General Partner. 6. Books,Records Accounts and Processing Payment Requests. Class B Limited Partner shall review all consultants payment applications including lien waivers,if applicable, initial each application request if approved by Class B Limited Partner and forward to the General Partner packaged in the form of a draw request each month for processing. The General Partner shall use reasonable diligence in keeping at the principal office General partner full, true, correct, and complete books of account and business records in which transactions of the Project shall be entered. These accounts and records shall be kept by General Partner in a manner consistent with generally accepted accounting principals and practices. Such books shall be open at all reasonable times for inspection or copying by either party or its authorized representative. Class B Limited Partner shall reconcile its project accounting each month with the monthly accounting reports provided by the General Partner. 7. Compliance with Site Plan and Budget. Class B Limited Partner shall promptly advise General Partner if at any time it appears to Class B Limited Partner that the planning, development or construction of the Project is not proceeding in accordance with the Site Plan or if it appears that the c\Docnnrnts and Settings\BKauderer\Local Settings\Temporary Internet Files t01...I:SEXI-1IDIT D-2 developt>rnt services of Class B lid partnr.doc 1 Proforma will be exceeded. Notwithstanding anything to the contrary, Class B Limited Partner shall promptly notify the General Partner of development, budget, or schedule issues which will materially impact the Site Plan,Proforma,and/or Schedule for the Project. 8. Approvals and Permits. Class B Limited Partner shall diligently pursue all necessary applications,plans, approvals,permits (collectively, 'Permits")relating to the planning, zoning, subdivision,development and construction for the Project(but not building permits) as set forth in the Site Plan. In seeking such Permits, Class B Limited Partner may identify and recommend such outside contractors, engineers,planners, environmental consultants, and other consultants as may be necessary to prepare,process and obtain all required approvals as set forth in the Site Plan (collective] "Consultants"), provided the General Partner shall have the right to approve any and all Consultants. Class B Limited Partner shall negotiate,administrate and supervise all contracts for Permits with the Consultants throughout the period of permitting of the Project and submit all such contracts to General Partner for its final approval and execution. 9. Development Operations and Decisions. Class B Limited Partner in conjunction with General Partner shall supervise the site development, including offsite improvements, if any, and building construction of the Project set forth in the Site plan, and shall identify and recommend such contractors, and other service providers,including General Partner's national account vendors (but only if such national account vendors are approved by Class B Limited Partner, which approval shall not be unreasonably withheld or delayed),as may be necessary for the site development provided that and bany i dinchgcconstr must ction of the Project as set forth in the Site Plan(collectively"Contractors") be approved and signed by the General Partner. Class B Limited Partner negotiate, administrate and supervise all contracts with the Contractors through out the site development and building construction of the Project. Class B Limited Partner shall coordinate obtaining tenant approvals of the site development andopies of all ence building plans and submit to General a er cTenant approvalssmusdt included tenant siwith the gnature and/oralong with copies of all approvals receiveddfrom thetenants. initials and tenant approval date of the site development and building plans. Class B Limited Partner shall provide tenant coordination services for the project including but not limited to tenant plan review,signage reviews, tenant notices and fit up coordination Copies of all such approvals, notices and correspondence shall be submitted to General Partner. The foregoing provisions of this paragraph 9 shall be subject to the terms and provisions of any construction management contract entered into by and between the Partnership and the Class B Limited Partner pursuant to Article 4 hereof. 1 O. Tenant Negotiation. General Partner shall-provide Class B Limited Partner assistance in assist lass ted l letters of the t,marketing ar Development. of the Development andlnegotiating tenantrleasees PGeneral Partner shaartner in ll Tenant letters of intent,mark g make periodic jobsite visits to review progress of the project. Class B Limited Partner shall provide General Partner copies of all proposed letters of intent for General Partner's approval. All leases, brokerage agreements,and contracts to be prepared by Partnership shall be prepared by General Partner on General Partner's standard form, except for major tenant leases. General Partner shall be responsible for • coordinating legal review of all documents with the assistance of Class B Limited Partner. • • • • • Internet Files\OLKSEXrrIDrT D-2&velopunnt services of Class B lid panner.doc 2 C1Dtxurxnu and SeningslBl;ovdererV"ocal Seningsl7empor"er)' • EXHIBIT E Disclosures Regarding Contracts 1. Real Estate Purchase Agreement between Eaton Hydraulics, Inc. and Woltemath-Otis Development, Inc. dated April 16, 2003. 2. Amendment to Real Estate Purchase Agreement Octoberbetween 7, Eaton Hydraulics, Inc. and Woltemath-Otis Development, Inc. dated 003. 3. Second Amendment to Real emte Purchase reement DevelopmentAgnc. datedbNovemberaton Hydraulics, Inc. and WoIath-Otis 2003. 4. Letter of Objection to Matters in Commitment or Title Insurance from Thomas F. Ackley to David Salisbury July 228359.4 • EXHIBIT F Sorenson Park Plaza Omaha, NE PROJECT RIGHTS 1. Site Investigation Report— Sorenson Park Plaza, Omaha, NE.,prepared by W.D. Partners, dated August 25, 2003,prepared for Kimco Developers,Inc. 2 Environmental — Phase I Environmental Assessment prepared by Thiele Geotechnical, Inc., dated September 30,2003 prepared for Woltemath/Otis Development and Target Corp. 3. Wetlands—NO wetlands identified on subject parcel iel cal, 4. Geotechnical — GeotechnicalWoltemath/Otis Development hInce and Target CorpInc., dated September 29, 2003,prepared for 5. ALTAJASCM Land Title Survey — Prepared by Kirkham Michael Consulting Engineers, dated September 11, 2003 6. Traffic Impact Assessment—Traffic Impact Study, dated September, 2003, by Kirkham Michael Consulting Engineers, prepared for Woltemath/Otis Development Inc. 7. Soil & Groundwater Contamination (Environmental Remediation) — All preliminary studies, draft reports, and remediation recommendations as prepared by Haley & Aldrich Environmental Engineering commencing August 2003 to present, prepared for Woltemath/Otis Development, Inc. 8. Floodplain/FEMA—NO floodplain or floodway identified on subject property. 9. Preliminary and Final Platting—Based on current entitlement schedules included in Section 6 of Target CPR Manuel, date October 3, 2003: Preliminary Plat approval forecast for January 20, 2004. Final Plat approval forecast for May, 2004. Zoning approval attaches to Final Plat..All entitlements require formal approval from Omaha City Council • 10. Site Development Approvals/Permits —Run concurrent with platting/zoning entitlements and are expected to take approximately 90— 120 days upon submission of application. 11.Project Schedule — In accordance with Section(s) 3 and 6 of the Target CPR Manuel, dated October 3, 2003,prepared for the Target Corporation by Woltemath/Otis Development, Inc. ,� WebrsskalSorrmon Pork Flaw Omuhu\EXHIBIT FPmJec'rig 102103.doe 1 - • Sorenson Park Plaza Omaha,NE PROJECT RIGHTS 12. Site Plans Fit Up Plans and Construction Drawin s — Site Layoutu Plan, labeledC1.1l and min dated ed July 25,2003, prepared by Meyer & Associates P.C. Prelimin Plat (Drwg 1/4), and Street Improvement Plan (Drwg 2/4), Preliminary Utility Improvement Plan (Drwg3/4), , dated October 3, 2003 and prepared by Preliminary Grading &Erosion Control Plan (Drwg 4/4), Kirkham Michael Consulting lting Engineers. All documents contained in the Target CPR Manuel "Omaha-Noah, SWC 72 &Sorenson Pkwy, Omaha,Nebraska", dated October 3,2003. 13. Noticelsl to Proceed—NONE The following items ma be issued prior to closing and if so,will be added to the Project Rights: NONE G:1Nel raskaZomunn Part Plaza-pm thalEXHIBIT F project riihu 1021 O3.Joo 2 4. EXHIBIT G Title and Survey Correspondence 1. Commitment for Title Insurance issued by First Nebraska Title dated April 5, 2003. 2. Letter of Objection to Matters in Commitment for Title Insurance from Thomas F. Ackley to David Salisbury dated July 28, 2003, 228359.3 9 4. A 1 EXHIBIT H Leasing Commissions • 1) For Project Leases up to 9,999 sq. tt. (other than ground $35fper square leases)for which no outside broker is entitled to a foobuilding erea commission 2) For Project Leases up to 9,999 sq.ft. (other than ground $6.00 o per squ square leases)for which an outside broker is entitled to a foobuilding area commission .00 3) For ro Project Lease s of 10,000 o out ide broke ft.or r is entitled to a f(other than oott of the leasable er square ground leases)for whichbuilding area commission 4) For Project Leases of 10,000 sq.ft.or more (other than $3.50 per square ground leases)for which an outside broker is entitled to a bit of theingrea leasable commission 5) (a) For Project Leases which are ground leases, or sale of perimeter lot, the commission paid to the Affiliate of the Class B Limited Partner will be 3% of the base rent for the first ten years of the term, or 3%of purchase price,when no outside broker is entitled to a commission. 5) (b) If an outside broker is entitled to a commission imnd nPa ground w receive a lease, or sale of perimeter lot,the Affiliate of the Class commission of 6%of the base rent for the first ten years of the term, or 6% of purchase price. 6) No commissions paid to Class B Partner for Target transaction. • t_, w, , { 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha • Page 2 Page 4 1 INDEX 1 DEPOSITION OF NORMAN M.BRODY was taken on 2 WITNESS: EXAMINATION PAGE 2 April 6,2004,commencing at 8:54 a.m.at the law 3 NORMAN M.BRODY 3 offices of Barclay Group,15974 North 77th Street, 4 By Mr.Boecker 5 4 Scottsdale,Arizona,before JoANN KLEMM,Registered B Mt'.Sca hone 134 5 Professional Reporter,Certified Court Reporter, 5 B?Mr.Boecker ]46 6 Certificate Number 50022,in the State of Arizona. Y 7 COUNSEL APPEARING: 6 8 For the plaintiff: 7 9 SHERRETS&BOECKER,LLC 8 EXHIBITS By: THEODORE R.BOECKER,ESQ. 9 Deposition 10 260 Regency Parkway Drive Exhibits Description Page Suite 200 10 11 Omaha,Nebraska 68114 11 108 Norman Brody's letter to Ken Johnson dated 23 402-390-1112 October 31,2003 12 402-390-1163(fax) 12 13 109 April 5,2004,letter to U.S. 23 14 For the defendants(appearing telephonically): 13 Environmental Protection Agency from Haley KOLEY JESSEN,P.C. ' &Aldrich 15 By: GREGORY SCAGLIONE,ESQ. 14 1125 South 103rd Street 110 Notice of 30(b)(6)deposition of KD Omaha 48 16 Suite 800 15 1 103 Omaha,Nebraska 68124 16 111 Redevelopment/Subdivision Agreement 52 17 402-390-9500 , Revised 402-390-9005(fax) 17 18 112 Woltemath-Otis Development memo 88 19 For the intervenors KDI Omaha,L.P.AND KD Omaha 1103, 18 Inc.,(appearing telephonically): 20 113 Bylaws and organizational documents for KD 113 CITY ATTORNEY 19 Omaha 1103,Inc. 21 CITY LAW DEPARTMENT 20 114 Limited Partnership Agreement of KDI Omaha 90 By: BERNARD J.in den BOSCH,ESQ. LP 22 1819 Farnam Street 21 Suite 804 22 23 Omaha,Nebraska 68183 23 (Next page,please.) 402-444-5115 94 24 402-444-4125(fax) 25 ... 25 . Page 3 Page 5 1 CERJ'IhIED QUESTIONS 1 Scottsdale,Arizona 2 PAGE LINE April 6,2004 3 29 19 2 8:54 a.m. 31 2 3 4 62 1 4 NORMAN M. BRODY, 68 24 5 a witness herein,having been first duly sworn by the 5 69 19 - 6 Certified Court Reporter to speak the truth and nothing 102 25 7 but the truth,was examined and testified as follows: 6 8 7 9 EXAMINATION 8 9 10 BY MR.BOECKER: 10 11 Q. Could you state your full name for the record? 11 12 A. Norman Mark Brody,B-r-o-d-y. 12 13 Q. Mr.Brody,my name is Ted Boecker. I'm one of 13 14 the attorneys for Benson Park Plaza,the plaintiff in a 14 15 suit brought against-the City of Omaha and others. I'm ' 15 16 going to ask you a series of questions here today in 16 17. connection with a 30(b)(6)deposition. • 17 18 If at any time during the course of my 18 19. questioning you do not understand a question that I . 19 20 pose,please ask me to restate it or rephrase it in a 20 21 manner that is understandable to you. 21 22 Is that agreeable? 22 23 A. Yes. 23 24 Q. And because we have people participating 24• 25 25 telephonically and because the court reporter needs to • • • 2 (Pages 2 to 5) VI PMM RFP(IPTTN(, CFR\/TCFC - (F,711 SR1 -Rcfl , ,, • 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 6 Page 8 l take your responses down,please answer audibly"yes"or I Q. BY MR.BOECKER: Mr.Brody,how long were you 2 "no"as opposed to shaking your head and things of that 2 with McGarry&Brody? 3 nature. 3 A. About eight years. 4 is that agreeable? 4 Q. Is there any particular type of focus to your 5 A. Yes. 5 practice;were you a litigator,real estate attorney? 6 Q. Mr.Brody,do you understand that you have 6 A. General practice but focusing on real estate. 7 been designated as the 30(b)(6)representative of KD 7 Q. What did you do after your tenure at McGarry& 8 Omaha 1103,Inc.? 8 Brody? 9 A. I do. 9 A. I went out on my own. 10 Q. What is your relationship to KD Omaha 1103, 10 Q. Still practicing as an attorney? 11 Inc.? 1 I A. Phasing out my law practice and concentrating 12 A. I'm an officer of Kimco Developers,Inc.,and 12 on real estate development and leasing,management. 13 they are a member of that entity. 13 Q. Is that in an individual capacity as opposed 14 Q. What is your particular title or position as 14 to working for a third party? 15 an officer? 15 A. Yeah,for the most part. I incorporated. The 16 A. I'm vice president of development. 16 law practice was individual. The real estate aspect was 17 Q. I would like to get some background 17 incorporated. • 18 information on you. 18 Q. Was there any particular area that you were 19 How old a gentleman are you? 19 engaged in real estate development in terms of a locale? 20 A. I'm 57. 20 A. Initially,doing development in the ' 21 Q. Did you graduate from college? 21 metropolitan Twin Cities area and real estate brokerage 22 A. I did. 22 on a national basis. 23 Q. What college? 23 Q. What sort of properties would you deal with in 24 A. University of Minnesota. 24 terms of your national real estate brokerage? 25 Q. What year? 25 A. Primarily as a broker for Best Buy Company. i Page 7 Page 9 i 1 A. 1968. 1 Q. Were you acquiring properties for Best Buy, 2 Q. And any particular degree or area of emphasis? 2 subleasing properties? What exactly were you doing for 3 A. Political science major. 3 them? 4 Q. Any further educational background? 4 A. I was doing market research,site selection 5 A. Yes. I have a law degree from William 5 for them, either to acquire or develop on their own,or J 6 Mitchell College of Law,which I obtained in 1973. 6 as a tenant in a shopping center or freestanding 7 Q. Did you take the bar examination? 7 building. 8 A. I did. 8 Q. How long did you continue with that line of 9 Q. What state? 9 work? 10 A. Minnesota. 10 A. Approximately ten years. 11 Q. Did you pass? 11 Q. What did you begin to do? 12 A. Yes,I did. 12 A. I was—I phased out my development practice 13 Q. Did you thereafter practice as an attorney? 13 and—my law practice,my real estate development and 14 A. I did. 14 focused on brokerage for a couple of years and then 15 Q. What city and what firm? 15 went--was hired by Best Buy directly as an in-house 16 A. In the City of St.Paul and the firm was 16 senior real estate representative. 17 McGarry&Brody,M-c G-a-r-r-y. 17 Q. Do you have a recollection as to when you 18 Q. And how long? 18 would have first been hired by Best Buy, approximately? 19 MR. SCAGLIONE: It sounds as if someone is 19 A. About late'80s. 20 rubbing the phone or putting something on the phone. 20 Q. And how long did you remain with Best Buy? 21 We're getting a little bit of static,and if the phone 21 A. In-house,about two and a half years. 22 could be moved closer to Mr.Brody,that would be 22 Q. Then what did you do? 23 helpful. 23 A. I was recruited by Target Stores and worked 24 THE WITNESS: Okay. 24 for Target Stores as a senior real estate manager. 25 MR. SCAGLIONE: Thank you. 25 Q. And what sort of duties did you engage in as a 3 (Pages 6 to 9) KLEMM REPORTING SERVICES - (623) .R1 -RSnn (S 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 10 Page 12 1 senior real estate manager for Target Stores? 1 covered malls. We do primarily strip centers. 2 A. Site selection,market research,negotiation 2 Q. How did you first become aware of the Vickers 3 of purchase agreements,running the development team for 3 site at north--6600 North 72nd Street in Omaha, 4 specific store locations. 4 Nebraska? 5 Q. And how long did you remain with Target 5 A. I gave a speech in Omaha before a real estate 6 Stores? 6 group,and following my speech,Jim Otis approached me, 7 A. About two and a half years. 7 and we discussed this project. 8 Q. What did you do next? 8 Q. Do you have any recollection as to 9 A. I was recruited by another retailer called 9 approximately when that speech would have been given? 10 Garden Ridge based in Houston,Texas,as vice president 10 A. May of'03,I believe. 11 of property development and moved to Houston and ran 11 Q. Had you done any development work in Omaha, 12 their store expansion program. 12 Nebraska,prior to your contact with Mr. Otis? 13 Q. How long did you remain with that firm? 13 A. I kind of ran around the market for Best Buy 14 A. About two years. 14 Company 15 years ago. 15 Q. Then what followed after that? 15 Q. No other project for Kimco Developers in the 16 A. I was recruited by Home Depot,and they moved 16 Omaha,Nebraska,area? • 17 me to Detroit,Michigan,where I was director of the 17 A. Nothing that I was involved in. 18 Eastern Great Lakes Real Estate Division. 18 Q. Did you know Mr.Otis before he approached you . 19 Q. And as director of the Eastern Great Lakes 19 after your speech;had you known him previous to your 20 Real Estate Division,what duties did you typically 20 speech? 21 engage in? 21 A. I had never met him before. I did talk to him 22 A. Similar to those at Target and in addition 22 when I was at Home Depot. He had a site that he wanted 23 training other real estate people. 23 me to look at at that point,but we weren't interested. 24 Q. What followed after that? 24 Q. After your discussion with Mr.Otis,.what 25 A. I was recruited by Kimco Developers,and 25 happened next relative to the Vickers site? Page 11 Page 13 ", ri 1 that's where I'm currently employed. 1 A. My recollection is that he provided me with as 2 Q. Do you recall when you were first hired by 2 much information as he had available at the time, 3 Kimco Developers? 3 preliminary site plan,purchase contract,some ; 4 A. March of 2002. 4 demographics. I believe he had a marketing brochure. 5 Q. And as vice president of development with 5 Q. Do you know if you or your firm,Kimco 6 Kimco Developers,what sort of duties do you typically 6 Developers,has kept a copy of the material that 7 engage in? 7 Mr.Otis provided you? 8 A. I run several development projects that are 8 A. Well,I'm sure we have a copy of the purchase 9 currently under construction. We also prospect for 9 contract. I can't say whether or not we have the 10 additional business throughout the country. 10 original marketing materials or not. And the site plan 11 I'm responsible for overseeing the leasing of 11 has changed,I think,but it's—I don't know if we 12 the various projects that we're involved in,as well as 12 have it or not. 13 overseeing construction. There are people that report 13 Q. Okay. With respect to the initial marketing 14 to me on the leasing and construction side,and I have 14 brochure,what sort of data or information was contained 15 sort of a global overview. 15 in that document? 16 Q. Is there any particular type of development 16 A. I can't remember specifically,but I'm sure 17 that Kimco Developers focuses on? 17 that it would have had an aerial,some demographics and 18 A. Well,Kimco is focused almost entirely on 18 a site plan. 19 retail development. 19 Q. Before you even became involved--"you" 20 Q. Would that be in the nature of shopping 20 meaning Kimco Developers--there was already a site 21 centers of one kind or another? 21 plan developed for this site for use as a shopping 22 A. Correct. 22 center of some sort? - ,, 23 Q. And that can vary between a pedestrian-type 23 A. Yes. 24 shopping mall to a strip mall? 24 Q. The purchase agreement that you were shown, 25 A. Right. We don't do the traditional malls,the 25 was that an executed real estate purchase contract? 4 (Pages 10 to 13) KI__FMM RFPnRTTNC; SFRVTf Fq - (i'2-11 cs--ti_RLn- , . 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 14 Page 16 1 A. I can't recall. 1 Q. Have you ever engaged in any telephonic 2 Q. Do you have any recollection as to whether or 2 discussions with anyone from the City of Omaha? 3 not Mr.Otis indicated that he had locked up the 3 A. No. 4 property to any degree? 4 Q. Any telephonic discussions with anyone from 5 A. I think he said he had it under contract. 5 Vickers or Eaton Corporation? 6 When I say"he," I mean him and Mr.Woltemath. 6 A. No. Just relied totally on our partner. 7 Q. Did he indicate why he was seeking you out? 7 Q. After your due diligence trip,what occurred . 8 A. For a couple of reasons,because of our 8 next? 9 financial strength and also because of our retailer 9 A. We put together—I put together a 10 connections. 10 presentation to our investment committee to determine 11 Q. Did he indicate that he was looking at Kimco 11 whether or not there was a level of interest to proceed 12 as a potential source of funding in terms of loans, or 12 with the project as a partner. 13 was he looking to partner up? What was the initial 13 And immediately before that—or as part of 14 presentation? 14 that process,I had a discussion with Mr.Woltemath and 15 A. I think he was looking for a partner. 15 Mr.Otis as far as terms of the joint venture,and I 16 Q. Did he say or suggest anything that would 16 believe a letter of intent was drafted,which was 17 indicate that if he didn't obtain Kimco as a partner, 17 negotiated between the parties and executed. And that 18 that they intended to walk away from the project? 18 basically formed the structure that was presented to our 19 A. Never had that conversation. 19 investment committee. • 20 Q. Did Mr.Otis ever suggest that there were any 20 Q. Mr.Otis and Mr.Woltemath,were they 21 prospective partners that he was having discussions 21 envisioned to be a general partner,a limited partner? 22 with? 22 Did you have any understanding in that regard? • 23 A. Never mentioned it to me. 23 A. Limited partners because of our--because of 24 Q. After you received the initial marketing 24 the financial side. That's the structure that we 25 brochure,the purchase contract,the site plan,what 25 generally operate under,but we rely on the local Page 15 Page 17 1 happened next relative to this site? 1 partners almost exclusively to attain approvals and be 2 A. I believe I made a trip to Omaha to see the 2 our eyes and ears,et cetera,on the ground. They are 3 site and meet personally with some of the attorneys that 3 technically limited partners,but they have a much 4 were involved in the transaction,zoning attorneys and 4 bigger role than that. 5 also an environmental attorney and then met with Kirkham 5 And when I say"they," I don't mean just 6 Michael and several other consultants,the architects 6 Mr.Woltemath and Mr. Otis,but generally in all of our 7 that were involved in the project. I can't remember 7 developments,because of their market knowledge,local 8 their names specifically. Just sort of a little due 8 partners'market knowledge and connections,we rely • 9 diligence trip. 9 almost exclusively on them. 10 Q. Did you ever tour the Vickers facility itself? 10 Q. Is this a common structure in your experience • 11 A. Never went inside,no. 11 for Kimco Developers to employ,where it's a general 12 Q. What is the closest that you ever actually got 12 partner,an entity,and then gets a local team as a 13 to the manufacturing facility structure? 13 limited partner? 14 A. Drove around it. 14 A. Yes. 15 Q. With respect to the zoning attorney,would 15 Q. With respect to the investment committee,did 16 that have been Mr.Jobeun? - 16 you prepare any written materials to submit to them? 17 A. Right. 17 A. Just a short narrative. . 18 Q. Do you recall the name of the environmental 18 Q. What was the response of the investment 19 attorney? 19 committee? 20 A. No,not offhand. 20 A. The investment committee approved the 21 Q, Did you meet with any City of Omaha officials? 21 transaction. . 22 A. No,never have. 22 Q. Do you recall how many members were on the 23 Q. Did you meet with anyone from Vickers or Eaton 23 investment committee? 24 Corporation? 24 A. I believe there were four primary members. 25 A. No. 25 Q. And do you recall who these people were? • 5 (Pages 14 to 17) KI_FMM RFPORTTNC; .cFRVTr'Fc - (i;"n1 cR1 -Rcnr 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 18 Page 20 1 A. Milton Cooper,David Henry,Michael Flynn, l financing project in the state of Nebraska? 2 Michael Pappagallo. Don't ask me to spell that one. 2 A. No. 3 Q. The four gentlemen that you referenced,did 3 Q. How many projects--development projects 4 you make a presentation to them as a group,or was it on 4 would you say you've been involved in,roughly, during 5 an individual basis? 5 your tenure with Kimco Developers,Inc.? 6 A. As a group. 6 A. Me personally or the company in general? 7 Q. During the course of your presentation to the 7 Q. You personally. 8 investment committee,do you recall referencing the need 8 A. About 15 that are under construction and about 9 or desire to seek tax increment financing? 9 20 that are in the pipeline,as we like to call it. 10 A. Absolutely. 10 Q. Of those 15 that are under construction,how 11 Q. When is the first time that the notion of 11 many have utilized tax increment financing? 12 seeking tax increment financing relative to this project 12 A. Two,I think. 13 first arose? 13 Q. Do you deem the Vickers site project as under 14 A. Probably in my first discussion with Mr.Otis 14 construction or in the pipeline? 15 in May of 2003. 15 A. Pipeline. 16 Q. How did it arise? Was he the one that 16 Q. The two projects under construction that have 17 mentioned it,or were you the one that mentioned it? 17 utilized TIF,where are they located? 18 A. I believe he told me that the project wasn't 18 A. One is in Fort Worth,Texas. The other one is 19 feasible v'ithout tax increment financing. 19 in Burleson,Texas. When i say TIF,I use that as a 20 Q. Did he explain why he felt that way? 20 category that can include a lot of different means of 21 A. Well,I think there were a number of reasons. 21 government assistance. They may not strictly all be 22 I mean,I can't remember the exact words of the 22 TIF,as from a legal standpoint. It might be tax 23 conversation,but I think it was made clear that on a 23 abatements,real estate tax abatements or personal tax 24 number of levels,the tax increment financing was 24 abatements or contributions by the city for off-site 25 necessary because of the need to convert an industrial 25 improvements,that sort of thing. = 1 Page 19 Page 21 ` 1 plant to a retail facility,and all that entailed as far 1 Q. So roughly speaking,in terms of a public 2 as demolition of existing improvements and removing 2 finance component of some sort,two of the 15 projects 3 basements and other substructures and relocating 3 under construction have that in place? 4 utilities. 4 A. Yeah. Of the two,one is under construction. 5 I think he indicated,also,that there was a 5 One is still in the pipeline. 6 lot of off-site improvements that were going to have to 6 Q. Do you--when you say that you were broadly 7 be done. 7 speaking about TIF and generally what it meant,did that 8 There was,i think,also—he said it was in 8 apply to your conversation with Mr.Otis? When he had 9 an area of town that sort of had been passed over by 9 talked to you,was he talking specifically about tax • 10 other retail development,most of it being focused west, 10 increment financing or public financing in general? 11 in west Omaha. 11 A. In that instance,he was specifically talking 12 There were a number of incentives that were 12 about tax increment financing. 13 going to be necessary. I think,also,he mentioned it 13 Q. During your conversation with him at that 14 had been on the market for a while and that Eaton had 14 time,did you have an understanding of what tax 15 realized there was a need to do this because of the lack 15 increment financing was? • 16 of interest in redeveloping the property. It was a very ' 16 A. Yes. 17 costly operation. 17 Q. And had you utilized or been involved in 18 I think he mentioned environmental,too. 18 projects that utilized tax increment financing 19 Q. Was any other form of public financing 19 specifically? •,• 20 discussed other than tax increment financing? 20 A. Yes. 21 A. No,not to my recollection. 21 Q. Of the 20 projects in the pipeline,how many 22 Q. Had you ever been involved in projects 22 are proposing to use tax increment financing? 23 involving tax increment financing before? 23 A. Just one. 24 A. Many times. 24 Q. And would that be the Vickers? 25 Q. Ever been involved in a tax increment 25 A. No. That's the Fort Worth--I mean--well, 6 (Pages 18 to 21) Ill FMM RFP(1PTTN(, CFR\/TCFC - (A-n1 U21 _52Cfl2 S 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 22 Page 24 1 tax increment financing in that--in the sense 1 reviewed it with our joint venture partner,and based on 2 specifically--yeah,just the Vickers deal. 2 his input,I had it put on Kimco Developers'stationery 3 Q. And the Fort Worth,Texas,was that going to 3 and sent. 4 specifically use tax increment financing or some other 4 Q. So the body of this document would have been 5 public financing component? 5 at least originally prepared by Mr.Otis? 6 A. That was going to be based on sales tax,some 6 A. I don't know who prepared it,but I assume it 7 property tax and personal property tax. So real 7 was prepared with,you know,the input of several folks 8 property,personal property and sales tax. 8 that were intimately involved with the project, 9 Q. So of the 15 projects you've been involved 9 including Mr.Otis. 10 with under construction and the 20 in the pipeline, 10 Q. Other than Mr. Otis and/or Mr. Woltemath, 11 there's only one project that used specifically tax 11 would you know any other person that would be involved 12 increment financing? 12 in the preparation of this letter? 13 A. Correct. 13 A. No. 14 MR.BOECKER: Bernard and Greg,the next 14 Q. The first paragraph indicates"KDI is a wholly 15 exhibit I have down is 108. 15 owned subsidiary of Kimco Corporation,"is that an 16 Do you have any problem with that? 16 accurate statement? 17 MR.SCAGLIONE: I don't recall. That will be 17 A. Yes. 18 fine. 18 Q. Is the statement that"As of September 30th, • 19 ma.BOECKER: I think the Eaton deposition 19 Kimco currently owns 609 neighborhood and community 20 ended with 107. I'm going to ask the reporter to mark 20 shopping centers totaling 92 million square feet of 21 it as 108. 21 gross leasable area." 22 (Deposition Exhibits Numbers 108 and 109 were 22 Is that an accurate statement? 23 marked for identification.) 23 A. To the best of my knowledge,it was at the 24 MR.BOECKER: Bernard and Greg,I've marked as 24 time. 25 Exhibit 108 Mr.Brody's letter to Ken Johnson dated 25 Q. There is a statement that"The development • Page 23 Page 25 1 October 31,2003. And I've marked as Exhibit 109 a 1 process is proceeding well. We expect final approval • 2 document dated April 5,2004,with a"draft"stamp 2 fi•om Target's capital expenditure committee on 3 across it. Looks to be prepared by Haley&Aldrich. 3 November 11th for a 124,000 square foot Target store." 4 Q. BY MR.BOECKER: Mr.Brody,I'm going to show 4 Do you know if that final approval was 5 you what has been marked by the court reporter as 5 obtained on that day? 6 Exhibit 108 and ask you if you can identify what that 6 A. Yes,it was. 7 document is. 7 Q. And was the notion that a portion of the 8 A. Yeah. It's a letter written under my 8 property under contract would be sold to Target,or were 9 signature to Kenneth Johnson at the City of Omaha 9 they going to lease space? 10 Planning Department. He was economic development 10 A. They were going to buy. 11 manager. 11 Q. And have you formalized a contract with Target 12 Q. Have you at any time ever spoken with 12 to acquire any portion of the property? 13 Mr.Johnson personally? 13 A. Not that's been executed. 14 A. No. 14 Q. But you've negotiated a form of contract? 15 Q. Have you at any time directed any of your 15 A. Yes. 16 employees within Kimco Developers,Inc.,to speak with 16 Q. Are there any other parties that you've 17 Mr.Johnson directly? 17 negotiated contracts with to acquire a portion of the 18 A. I can't recall that I ever did. 18 real estate? 19 Q. Are you aware of anyone at Kimco Developers, 19 A. No. 20 Inc.,having any discussions with Mr.Johnson? 20 Q. With respect to the contract with Target, 21 A. No. 2] isn't it contingent upon obtaining tax increment 22 Q. This letter dated October 31,2003,is that a 22 financing? 23 document that you prepared? 23 A. It may be specifically referenced in the 24 A. Actually,no. It was prepared by our joint 24 contract,but the pricing--but I'm not sure if it's a 25 venture partner,and a draft was sent to us,and I 25 specific condition. I mean,the contract speaks for 7 (Pages 22 to 25) KLEMM REPORTING SFRVTCCFS - (67�1 SR1 -RCM , . ° 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 26 Page 28 1 itself. 1 Q. Did they give you any indication as to volume 2 I think that the pricing reflects the fact 2 or anything of that nature? 3 that Target is not involved in the TIF,per se,but they 3 A. They do not share that information. • 4 were given a price that reflects the likelihood of 4 Q. Was there any negotiation of the price,or did 5 obtaining a TIF or the necessity of obtaining a TIF. 5 Target come to you and say,"This is what we'll pay and 6 Q. So you're saying that Target was given a price 6 end of story"? 7 lower than you believe might otherwise customarily be 7 A. No. I think we wanted more,but we got what 8 given to them because of the expectation that TIF would 8 we got. 9 be approved on this project? 9 Q. Arid what is it that you got? 10 MR. in den BOSCH: Object to the form. 10 A. To be honest with you,I can't even remember. 11 MR.SCAGLIONE: Join. 11 It's in the contract. it was a number that was a gross 12 MR.in den BOSCH: You may answer,Mr.Brody. 12 number that was divided between the land price and site 13 A. BY THE WITNESS: Well,the price was 13 work. I'm not sure what that was. Somewhere between 14 negotiated anticipating a TIF. There were sufficient 14 $3 million and$4 million. 15 conditions in the project--in the contract so that in 15 The price reflects that they were not 16 the event a TIF was not obtained,the project would not 16 obligated under any way,shape or form to pay for any of 17 go forward because it was not economically feasible to 17 the off-site improvements,which were going to be 18 proceed. 18 covered by the TIF. 19 But as to specifics of the TIF,there was not 19 Q. Were they obligated to share in the cost of 20 a reference specifically of performance obligations, 20 any on-site improvements? . 21 amounts of the TIF,et cetera,in the Target contract 21 A. There was a cap,so whatever the purchase 22 because Target did not want to get involved in all of 22 price was and the division,it was--their obligation 23 that. 23 for on-site improvements was capped. 24 I think that their price is a fair price. 24 Q. As a percentage or as a dollar amount? 25 Q. BY MR BOECKER: Assuming attaining TIF? 25 A. As a dollar amount. . • Page 27 Page 29 1 A. Assuming a TIF,yes. 1 Q. Do you recall what the cap was? 2 Q. Do you believe it would not be fair,assuming 2 A. No. .. 3 you do not get TIF? 3 Q. Just so I understand,are there two different 4 A. When you deal with national retailers--I'm 4 components? Is there a purchase price component and a 5 going off on a tangent. You can stop me. When you're 5 separate component for site work? 6 dealing with national retailers,what's a fair price 6 A. For site work. • 7 doesn't really matter. 7 Q. And the purchase price component would have 8 What matters is what a retailer can afford to 8 been between$3 million and$4 million? 9 pay based upon the projected sales that their research 9 A. No,no. The whole thing,site work and .. 10 generates. The price that Target pays reflects the 10 purchase price,between$3 million and$4 million. 11 research on projected sales. They do not share that 11 Q. And as you sit here today,you can't recall . , 12 information with us,but they make it very specific in 12 the exact number,but it's spelled out in the contract? -, 13 the negotiations that this is the maximum price they can 13 A. Yeah. 14 pay. - 14 Q. Have you engaged in any discussions with any 15 And I'm speaking of that not only because of 15 other parties to sell a portion of the Vickers space to 16 my familiarity with this particular transaction but 16 them? 1 17 because I'm a former Target real estate person that 17 A. I guess there have been some inquiries,but 18 negotiated numerous contracts all over the country for 18 nothing has been finalized. 19 Target,and they're all based on sales. The property 19 Q. And with what firms have there been inquiries? 20 could be worth$20 a square foot,but Target couldn't 20 A. I think that's privileged information because 21 pay$20 a square foot. That's a general nutshell. 21 of competitive circumstances. 22 Q. Did Target inform you that they had undertaken 22 Q. So are you refusing to answer that question? 23 research on projected sales with respect to the Vickers 23 MR.SCAGLIONE: We're going to assert that 24 site? 24 that is trade secret confidential information beyond the 25 A. Absolutely. 25 scope of discovery and move for a protective order in 8 (Pages 26 to 29) KI FMM RFPf1RTTNf; cFR\/TCFq - (1'fl1 CR1 -c crr 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 30 Page 32 1 that regard. 1 reflecting expected cost for this development? 2 MR.BOECKER: For the record,I would 2 A. I am. 3 stipulate to a protective order that information would 3 Q. Did you participate in the preparation of that 4 only be used for the purposes of this litigation. 4 material? 5 MR.SCAGLIONE: The protective order I would 5 A. No,I did not. 6 seek would be that discovery not be had. 6 Q. In your review-- did you review that material 7 MR.BOECKER: I'm making it clear on the 7 before it was submitted to the City of Omaha? . 8 record--because I think that we have a duty to work 8 A. I think I received a copy of it. I don't--I 9 out disputes before going to the court. 9 put it in the tile. I didn't look through every--I 10 For the record,I want to make it clear that I 10 think I looked at the transmittal letter,but didn't 11 would stipulate to a protective order that would limit 11 look at everything contained in it. 12 its use in this litigation,that I would agree to not 12 Q. Do you have a recollection as to whether or 13 disseminate it to my clients. Further,I think it's 13 not the negotiated price with Target was disclosed to 14 relative because you sought tax increment financing,and 14 the City of Omaha? 15 you have to demonstrate that this project is not 15 A. I don't know. 16 feasible but for TIF. 16 Q. Do you have an opinion as to whether or not 17 I think this information is pertinent to that 17 you believe that information should have been disclosed 18 assessment. 18 to the City of Omaha? 19 MR.SCAGLIONE: Thank you for your offer, 19 A. I don't have an opinion as to that. I don't 20 Mr.Boecicer. We'll decline. 20 know what the requirements are under the local laws. 21 MR.BOECKER: All right. I certify the 21 Q. Prior to today's deposition,have you had the 22 question and all reasonable follow-ups that would come 22 opportunity to review the deposition of Mr.Otis? 23 after receipt of a response to the question. 23 A. No. 24 Q. BY MR.BOECKER: Mr.Brody,do you have any 24 Q. Have you reviewed any of the depositions taken 25 negotiated leases in place for property at the site? 25 in this case? Page 31 Page 33 1 A. No. 1 A. No. 2 Q. Has anyone,other than Target,approached you 2 Q. Did you have any discussions with Mr. Otis 3 indicating a willingness to utilize space at the Vickers 3 regarding projected costs for demolition work at the 4 site if it's developed as a commercial retail-- 4 site? 5 MR.SCAGLIONE: Same objection. 5 A. I may have seen an estimate as part of an 6 Q. BY M.R.BOECKER: --shopping center? 6 overall cost,but I'm not sure that I had any input in 7 MR.SCAGLIONE: Privilege and motion. This is 7 it other than saying, "Thanks for sending it to me." 8 Greg Scaglione. 8 We were relying totally on our partners and 9 MR.BOECKER: You're instructing him not to 9 their consultants. 10 answer? 10 Q. Was anyone else working with you on Kimco's 11 MR.SCAGLIONE: That's correct. 11 side with respect to this development? 12 MR.BOECKER: For the record,I would,again, 12 A. Yes. 13 agree to a protective order limiting its use to this 13 Q. And who else would have been working? 14 litigation. And I also indicate that it's pertinent to 14 A. The project manager,Richard Lally,L-a-I-1-y. 15 demonstrate whether or not this project is viable but 15 Q. Do you know what Mr.Lally's duties were with 16 for TIF. 16 respect to this project? 17 I think any complaint about proprietary 17 A. The project manager is responsible for just 18 information is waived by seeking the public financing 18 reviewing all the construction costs,hard and soft 19 component. 19 costs of the project on the cost side and processing pay 20 I'll certify the question and ask the court to 20 applications from the partner and from the contractors, 21 resolve the issue. 21 vendors providing services. He consults with me. 22 There,of course,would be reasonable 22 Q. So would Mr.Lally's involvement in this 23 follow-ups depending upon the answer given. 23 project have already commenced,or does it really start 24 Q. BY MR.BOECKER: Mr.Brody,are you aware that 24 once construction begins? 25 certain documentation was provided to the City of Omaha 25 A. No. He's also responsible during the due 9 (Pages 30 to 33) Ill FMM PFPnRTTN(; cFR urrFc - (F,7'n SR1 -scn'� 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 34 Page 36 1 diligence process. 1 amount is. 2 Q. Do you have any knowledge whether or not 2 Q. You've never seen any? 3 Mr.Lally has had any conversation with Mr.Otis 3 A. Don't recall seeing it specifically,no. 4 regarding estimated cost for construction? 4 Q. With respect to moving 800,000 cubic yards of 5 A. I'm sure he has. 5 dirt,do you know where that figure was derived from? 6 Q. Have you personally observed or witnessed any 6 A. I'm sure it came from Kirkham Michael. 7 of those conversations? 7 Q. Okay. But you don't have any personal 8 A. I haven't personally,no. 8 knowledge? 9 Q. I-Ias Mr.Lally reported to you that he has had 9 A. No. 10 those conversations? 10 Q. Would Target bear any portion of the 11 A. He has. 11 responsibility for any expense associated with that 12 Q. Has he related any opinions or belief as to 12 work? 13 whether or not any of the estimates provided by the 13 A. No. 14 local developer were high or low? 14 Q. There is a reference that you have to work 15 A. No,he hasn't. lie feels that they are 15 through the EPA to ensure that the existing 16 reasonable. 16 contamination on this property is remediated. 17 Q. Do you have an understanding that the 17 Did you have any understanding as to whether 18 environmental engineers provided a cleanup cost estimate 18 or not there was already a consent order in place 19 that is different than that submitted to the City of 19 requiring Eaton Corporation to undertake remediation at 20 Omaha? 20 the site? 21 A. No,I wasn't aware of that. 21 A. I believe there was remediation in process, 22 Q. Are you aware of whether or not there has been 22 and I don't know whether it was from Eaton or their 23 any change in understanding or belief that projected 23 predecessor or both that was assuming responsibility for 24 demolition costs would be lower than what was submitted 24 what was going on currently. 25 to the City of Omaha? 25 Q. Did you have any understanding when you wrote Page 35 Page 37 1 A. I'm not aware of that one way or another. 1 this letter or you signed this letter on or about 2 Q. Sir,with respect to Exhibit 108,there is a 2 October 31,2003;that there was a consent order in 3 reference in the third paragraph that"Prior to 3 place requiring cleanup efforts at the site? • 4 incurring typical site development expenses associated 4 A. I was aware that the EPA was involved. I'm 5 with a commercial property,we will be obligated to 5 not sure what the specific nomenclature of whatever 6 spend approximately$4,450,700 to improve the public 6 document they were operating under,but I knew that the 7 street." 7 EPA was involved and had directed them to do certain 8 Do you know how that was formulated? 8 things that,from my recollection,they were doing. 9 A. I'm assuming that it was a number that came 9 Q. There is a reference in the fourth paragraph 10 from Kirkham Michael. 10 that"We respectfully request approval of tax increment 11 Q. You did not actually participate in the 11 financing from the Sorenson Parkway Plaza project in the 12 preparation of that number? 12 amount of$8,490,000 pursuant to our application for the 13 A. No. 13 same." 14 Q. Okay. Do you know if under the agreement with 14 Do you see that reference? 15 Target they were obligated to contribute to any of the 15 A. Yes. 16 costs to improve the public street? 16 Q. Do you know how the figure of$8,490,000 was 17 A. They were not. 17 arrived at? 18 Q. With respect to demolition of the 483,053 18 A. I do not. 19 square foot building and other improvements,do you know 19 Q. Did you have any discussions with anyone 20 if Target had any responsibility to contribute to that 20 regarding that figure? 21 cost? 21 A. Probably had a discussion with Mr.Otis,just • 22 A. They had none. 22 telling me what the amount was,based upon the various 23 Q. Are you aware of any estimates provided as to 23 components that were going to be required in order to 24 the cost of demolition of the building? 24 make the project financially viable. 25 A. I'm sure there were. I'm not sure what the 25 Q. So your recollection is that this$8,490,000 • 10 (Pages 34 to 37' VI PMM RFP(RTTN(; SFR\/TrFS - (67-1 S21-Rcn-i 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 38 Page 40 I figure would have been something generated by Mr.Otis; 1 hard. 2 is that correct? 2 Q. I mean,are there different components? Is 3 A. By the consultants that Mr.Otis and--that 3 there a developer fee that you're relying upon? Are you 4 we employed,jointly—that the joint venture employed 4 relying upon future rents? How does it work? 5 to obtain our approvals and the tax increment financing. 5 A. It relies on your rents and recovery of 6 Q. Do you have any personal knowledge as to how 6 expenses,and generally,it's recognized at the time of 7 that$8,490,000 figure was arrived at? 7 sale. You're making certain assumptions to obtain that 8 A. No,I do not. 8 number,and those assumptions may change over time 9 Q. In preparation for today's deposition,did you 9 because your rents are lower than anticipated or your 10 undertake any effort to study the documents that 10 expenses are higher than anticipated or cap rates 11 generated that figure? 11 adjust. There are a lot of variables. 12 A. No. 12 . Therefore,you want a return that's somewhere 13 Q. Did you undertake any effort to engage in 13 near 11,so at the end of the day,you know,you have a 14 discussions with Mr.Otis or anyone else as to how that 14 little cushion in there. 15 figure was arrived at? 15 Q. Now,are there some projects where it goes 16 A. No. 16 better than expected and your return is higher than • 17 Q. Would there be someone in a position that you 17 11 percent? 18 believe would be better suited to respond as to how that 18 A. Yes. 19 $8,490,000 figure was arrived at? 19 Q. So one of the mechanisms where you would begin 20 A. Yeah,Mr.Otis. 20 to recoup your 11 percent return would be some 21 Q. Did you ever inform Mr.Otis that there was a 21 realization of a return on investment through the sale 22 minimum profit or return on investment that was required 22 of Target,for example? 23 for Kimco Developers to participate in this venture? 23 A. Well,that's an offset of the costs. 24 A. Yes. 24 Q. But eventually, after making a number of those 25 Q. And tell me what you related to Mr.Otis in 25 types of transactions,you ultimately offset all of your Page 39 Page 41 1 that regard. 1 costs and begin to recoup your profit? 2 A. We like an 11 percent return on investment. 2 A. We don't make a profit until we sell the 1 3 Q. For someone like me who is not engaged'in real 3 project. 4 estate development-type work,can you explain to me what 4 Q. Are you saying that you envision that this 5 that means? 5 entire project would be sold off to some other party? 6 A. Essentially,you take all your costs,and 6 A. Eventually. That's what our business is. We 7 you--and add all of those up. You've got a certain 7 are merchant developers. 8 amount of income that's going to be generated by the 8 Q. And again,for someone like me,not in this 9 project,and you--it's the product of the income 9 type of work,what is a merchant developer? 10 versus the expenses. 10 A. Our division develops shopping centers to be 11 Q. Let me see if I understand this roughly. So 11 sold when they are seasoned,when they achieve a . 12 if you have$60 million in expenses,you would want a 12 95 percent occupancy. That's a rule of thumb. 13 return of at least$6.6 million? 13 Q. Is there any rule of thumb in terms of how 14 A. Right. 14 long in years that typically takes? 15 Q. And that return,of course,is over and above 15 A. It will depend on a lot of factors: Where the 16 reimbursement of your expenses? 16 project is located,what the competitive factors are . 17 A. Yes. 17 around the shopping center location,the various 1 • 18 Q. So essentially 11 percent ieturn would be 18 economics or demographics of the area,the demand by 19 equivalent in layperson's terms to 11 percent profit? 19 retail tenants for the area,the growth rate in the 20 A. Uh-huh. 20 market. 21 Q. For purposes of the record,is that a yes? 21 Q. In your experience,what is a typical time 22 A. Yes. • 22 frame? 23 Q. How is it that one would get an 11 percent 23 A. It could be 18 to 36 months. 24 return on a project such as this? 24 Q. Is that after construction is completed,or is 25 A. Well,how is it? You've got to work really 25 that after you get involved in the project? 11 (Pages 38 to 41) KLEMM REPORTING SERVICES - (623) 581-8503 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 42 Page 44 1 A. After we close on the property. 1 can obtain? 2 Q. Have you had discussions with anyone as to 2 A. No. Kimco doesn't collect any commissions. 3 potentially acquiring this site after it's developed? 3 Q. Does anyone collect any commissions through 4 A. No. 4 leasing to third parties at the center? 5 Q. Do you know if you obtained any estimates from 5 A. We hire outside leasing people,typically 6 any general contractors for construction costs? 6 brokers. The tenants are represented by brokers. 7 A. I don't believe we have. 7 Target was represented by a broker. Any tenant or 8 Q. is there a typical general contracting firm 8 potential purchasers of our parcels would typically be 9 that Kimco and its affiliates usually works with on 9 represented by a broker. 10 these projects? 10 We have a leasing consultant that is on 11 A. No. 11 Kimco's payroll as a consultant that monitors and 12 Q. Now,do you understand that there is also a 12 directs the leasing efforts along with Mr.Otis and 13 developer fee built in as a cost on this project? 13 Mr.Woltemath. 14 A. Correct. 14 Q. The Kimco leasing consultants,are they 1 15 Q. And pursuant to your joint venture agreement 15 compensated when there are deals struck with respect to 16 with the local developer,Kimco shares in that 16 the site? 17 development fee? 17 A. 'Yes,but it's not a commission. 18 A. Correct. 18 Q. Okay. What is the compensation? 19 Q. And do you know what amount of the development 19 A. 25 cents a square foot. • 20 fee Kimco expects to obtain? 20 Q. Is that split with Woltemath,or do they 21 A. I think it's split 50-50 with the partner. 21 receive something in addition to that? 22 Q. And do you know what the total development fee 22 A. That's not split. 23 is? 23 Q. That goes directly to Kimco? 24 A. No. It varies with the size of the project. 24 A. It doesn't go to us. It goes to our 25 Q. Is this project one that you would 25 consultant. It's not--she's not a Kimco employee. • Page 43 Page 45 1 characterize as large, small,average? 1 She's on a contract. 2 A. This is a large project. 2 Q. And who is the Kimco consultant? 3 Q. What is the typical developer fee on a large 3 A. Deborah Iaboni,I-a-b-o-n-i. 4 development project,in your experience? 4 Q. And do you know where Ms.Iaboni is located? 5 A. As I said,it varies. I would say if you want 5 A. She is located in the Chicago area. 6 a rule of thumb,3 percent of the hard costs of 6 Q. Do you know who she works for? 7 construction. 7 A. Iaboni Real Estate. 8 Q. The developer fee in this case would be 8 Q. Do you have any understanding as to whether or 9 something you would obtain in addition to your expected 9 not Woltemath-Otis receives any compensation if there is 10 11 percent return on investment? 10 leasing of space to third parties within the center? 11 A. Yeah. 11 A. To the extent they bring a tenant to the 12 Q. Is that a yes? 12 center,they would be entitled to a commission. I 13 A. Yes. This is just a recovery of overhead. 13 believe one or both of them is a licensed real estate . 14 This is going to be a long-term project. It's not 14 broker. 15 really profit. Developer fee is really covering your 15 Q. Is there an established rate in effect for 16 overhead and expenses. 16 their commission? 17 Q. But you also recoup those expenses that you 17 A. No,not established. It's a market rate. 18 put out through the sales through various third parties, .18 Q. Do you have any idea what the market rate in 19 correct? 19 Omaha,Nebraska,is? 20 A. Yeah. This is different. This is our own 20 A. Not off the top of my head. It varies based 21 internal costs,salaries and that sort of thing,office 21 on the size of the tenant. 22 rent,et cetera. It's our internal overhead,which we 22 Q. What is a standard range,in your experience? 23 don't get back from the tenants. 23 A. Well,each market is different,based upon the 24 Q. With respect to leasing space to third parties 24 rents that can be generated and the size of the retail 25 within the center,is there also a commission that Kimco 25 space. It's hard to say. I can't really say what the 12 (Pages 42 to 45) KLEMM REPORTING SERVICES - (623) 581-8503 .. ' 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 46 Page 48 1 scope is. If the tenant was under 5,000 feet,it would 1 30(b)(6)deposition of KD Omaha 1103 and ask if you've 2 be one thing. If it was between five and another 2 ever seen that document previously. 3 benchmark,it would be something else. 3 A. I think I saw it. 4 Q. is that set forth in any written agreement 4 Q. You don't have a firm recollection one way or 5 with Woltemath-Otis? 5 the other? 6 A. Not to my recollection. 6 A. No. I'm assuming that because this is my 7 Q. How are you going to judge when the time comes 7 project. Nobody else at the company knows more than I 8 if they're charging you a fair price? 8 do about it. 1 9 A. The tenant that comes in is going to have a 9 Q. Okay. With respect to each of the topics 10 broker,and they're going--we can negotiate these 10 listed,the Topics 1 through 20 listed on Pages 1,2 and 11 across the board,or we can negotiate them on an 11 3,can you tell me what you did prior to today's 12 individual basis. 12 deposition to prepare yourself to respond to those 13 And I believe in this particular instance,we _ 13 topics? 14 have an idea of what it's going to be,but I don't think 14 A. Just based on recollection. I haven't been in 15 we have a listing agreement,per se,because I don't 15 the office for most of the month--well,most of the 16 believe we've listed the property with Mr.Woltemath and 16 month of March,and in April I haven't been in the 17 Mr.Otis. They're just treated like any other broker. 17 office at all. 18 Q. Mr.Brody,do you have any knowledge as to 18 Q. So I take it your answer is you haven't done 19 whether or not if there was some lower dollar amount of 19 anything in particular to prepare yourself to respond to 20 tax increment financing allotted to this project,as to 20 these topic items;you would just testify based upon 21 whether or not it would remain feasible? 21 your general recollection of events? 22 A. I think that was evaluated,and this is the 22 A. Correct. 23 number that works. Anything else does not make the 23 Q. Do you have any particular knowledge as to the 24 project feasible. 24 preparation of any budgets or pro formas for the 25 Q. So a dollar lower,that's your bare minimum? 25 Sorenson Parlcway Plaza project,including any budgets or Page 47 Page 49 1 A dollar lower makes the project not feasible? I forecasts showing expected costs and expected returns? 2 A. Yes. 2 A. Well,I know that one was prepared, and I have 3 Q. Now,do you know if in calculating this 3 reviewed it in the past. There's probably been more 4 $8,490,000 figure,that the 11 percent return was 4 than one prepared and may have been attached to the 5 accounted for? 5 joint venture agreement. 6 A. I don't know. 6 Q. Did you participate in the preparation of the 7 Q. I'm going to show you what has been marked as 7 documents,or did someone else participate--or 8 Exhibit 109,and ask if you can identify what that 8 generate the document? 9 document is. 9 A. Someone else generated it. 10 A. Never seen it before. 10 Q. Do you know who that would have been? 11 Q. Okay. Are there any documents that you 11 A. It would have been one of two individuals, 12 reviewed in preparation for today's deposition? 12 either Mr.Lally or Mr.--well,Mr.Zinsmaster at 13 A. No. 13 Kimco. 14 Q.• What did you do to prepare for today's 14 Q. Is Mr.Lally based out of Lisle,Illinois? 15 deposition? 15 A. Yes. _ 16 A. Got up this morning,shaved,got dressed and 16 Q. That's a Chicago suburb? 17 came over here. 17 A. Yes. 18 Q. When did you learn that you were going to be 18 Q. Where is Mr.Zinsmaster? 19 the 30(b)(6)representative of KD 1103,Inc.? 19 A. Same place. 20 A. At the end of the week last week when I was in 20 Q. Where is the office that you principally work 21 Dallas. 21 out of? 22 (Deposition Exhibit Number 110 was marked for 22 A. Lisle. 23 identification.) 23 Q. What is Mr.Zinsmaster's title? 24 Q. BY MR.BOECKER: Mr.Brody,I'm going to show 24 A. He's senior project manager. 25 you a copy of Exhibit 110,a copy of the notice of 25 Q. And relative to the Vickers project,what 13 (Pages 46 to 49) Kl FMM RFPC)RTTNC; SFRVTC'F. - (E7R1 .SR1 -RYT1 I 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 50 Page 52 l duties does he have? l project, are there certain internal correspondence and 2 A. None. He's just Mr.Lally's boss. He may 2 e-mails that you haven't shared with the local 3 have assisted him in the preparation of the pro forma. 3 developers? 4 Q. Do Mr.Lally and Mr.Zinsmaster report to you? 4 A. There may be,yeah. 5 A. Yes. 5 Q. And what do those items relate to? 6 Q. Is there anyone else relative to the Vickers 6 A. Just discussions about additional documents 7 project or the Sorenson Parkway project that reports to 7 that might be necessary or follow-up instructions for 8 you,other than Mr.Lally and Mr.Zinsmaster? 8 attaining documents or notices,copying other people on 9 A. No. 9 notices that have been forwarded to us,that sort of 10 Q. Do you have any knowledge of any budgets, 10 thing,making sure that everybody is in the loop. 11 financial projections,pro formas or forecasts relating 11 (Deposition Exhibit Number 111 was marked for 12 to any calculation or satisfaction of any yield,return 12 identification.) 13 or profit requirements by KD 1103,Inc.,or any 13 Q. BY MR.BOECKER: Mr. Brody,I'm going to show 14 affiliates of KDI Omaha,L.P.,or Kimco related in any 14 you what's been marked as Exhibit 111,a document 15 way to the Sorenson Parkway Plaza project? 15 entitled"Redevelopment/Subdivision Agreement Revised." 16 A. Well,it's all contained on the pro forma. 16 I'll ask you to look at that document. 17 Q. And to your recollection,the pro forma would 17 Mr.Brody,have you seen that document 18 show the satisfaction of the 11 percent return on 18 previously? 19 investment requirement? 19 A. Yes,I have. I've seen a draft of it. I 20 A. It would have the return there. I'm not sure 20 don't know if it's this draft or another draft. 21 if it is 11 percent. 21 Q. Can you tell me generally what you understand 22 MR.BOECKER: Greg,did you produce that 22 that document to be? 23 document? 23 A. Well,it's just basically setting forth the 24 MR.SCAGLIONE: I believe so,yes. 24 circumstances and terms of the redevelopment notes for ' 25 MR.BOECKER: Is that something that was 25 the TIF,for the project,and the obligations of the Page 51 Page 53 • 1 e-mailed yesterday? 1 city and the developer thereunder. 2 MR.SCAGLIONE: No. I think that was already 2 Q. Did you participate in the negotiation and/or 3 produced in Jim Otis's production,but I'll 3 preparation of that document? 4 double-check. You're talking about the pro forma for 4 A. I reviewed it. I made a few comments and 5 the project expense? 5 passed it on to Bruce Kauderer,our attorney and general 6 MR.BOECKER: Right. I am aware of the cost 6 counsel in New York,and then he had conversations with 7 document,the budget document,produced during Otis's, 7 Larry Jobeun. • 8 but the inquiry was if there was anything reflecting the 8 Q. Do you have a recollection as to what items 9 11 percent yield return that Otis talked about in his 9 you provided comments upon? 10 deposition. 10 A. No. It's an important document,and I . 11 MR.SCAGLIONE: To the extent that a document 11 basically passed it on to our attorney in New York. 12 exists to show that,I believe it's already been 12 Q. Now,do you know if a 13 produced. 13 redevelopment/subdivision agreement has been executed . 14 Q. BY MR.BOECKER: Mr.Brody,do you know if 14 with the City of Omaha? 15 there have been any pro formas,budgets or projections 15 A. I don't know if it has or not. 16 prepared by Kimco Developers that have not been shared 16 Q. With respect to this particular project,is it • 17 with Mr.Otis and Mr.Woltemath? 17 Kimco's intent to seek financing for development from 18 A. I don't think so. 18 some third-party lender in addition to the tax increment 19 Q. Are there any documents that you put together 19 financing component? 20 for just Kiimco's internal purposes only that you don't 20 A. To build the project? 21 share with the local developer relative to the project? 21 Q. Yes. 22 A. Not typically. There may be some internal 22 A. Absolutely. 23 correspondence or e-mails,but not specifically budget 23 Q. Are there any ongoing discussions in that 24 related. 24 regard? 25 Q. Okay. In this--with respect to this 25 A. No. We're not to the stage yet. 14 (Pages 50 to 53) KI FMM RFPIRTTNC; SFR\/TCFR - (F?- 1 CR1 -Rcm 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 54 Page 56 1 Q. When do you typically get to the stage where 1 may not. I'm not sure. Again,we're relying on our 2 you have such discussions? 2 joint venture partner to obtain those in connection with 3 A. Not till after we've closed. 3 his attorneys or our attorneys. 4 Q. Is there any third-party financing utilized 4 Q. When you say"the TIF is in place"--now,do 5 relative to the closing on the purchase agreement? 5 you have any understanding whether or not there has to 6 A. No. 6 be any negotiation with lenders regarding TIF notes? 7 Q. So those funds come from Kimco? 7 A. I'm not sure about what is--I've reviewed 8 A. Right. 8 the document and passed it on. I'm not sure what the 9 Q. And then there's some sort of construction 9 obligations are and how they are going to be 10 loan negotiated or taken out? 10 implemented. 11 A. Uh-huh. 11 But to the extent that--we probably won't 12 Q. is that a yes? 12 use financing for the TIF. We'll just make a deposit of 13 A. Yes. 13 some kind. I think there are several options. 14 Q. Do you have any understanding whether or not 14 Q. Have you worked in any of your capacities, 15 in connection with the closing with Eaton Corporation, 15 other than just Kimco, any of your prior business 16 whether or not it is envisioned that there be any 16 experience,on a project you used tax increment 17 mortgage or deed of trust placed on the property? 17 financing specifically? 18 A. There won't be. 18 A. Yes. 19 Q. Do you know whose name it's envisioned that 19 Q. What is your understanding as to how tax 20 the property will be held? 20 increment financing works? 21 A. Through the joint venturer's name,other than 21 A. Well,the community either gives you the money 22 the property being sold to Target. 22 up front and you pay it back,or the developer puts the 23 Q. Do you have an understanding whether or not 23 money up front,and the community pays it to the 24 Target is acquiring from the joint venture or if it's 24 developer over time,which,I believe,.are the 25 acquiring directly from Eaton Corporation? 25 circumstances under this particular scenario,where • Page 55 Page 57 1 A. They'll acquire from the joint venture. That 1 we're coming up with the money,and we're getting 2 will be an assignment of the contract--or we'll be 2 reimbursement over time. 3 signing a contract as the joint venture,because they'll 3 Q. Do you know if there has been any discussion 4 do an assignment prior to the closing. 4 or contemplation of entering into negotiations with any 5 Q. Have you established a closing date yet? 5 lenders regarding the redevelopment promissory notes or 6 A. No. 6 assignments thereof? 7 Q. Do you know of any tasks that need to be 7 A. No,there hasn't been any as far as I'm aware. 8 undertaken prior to closing? 8 Q. Essentially,to your understanding,KDI or 9 A. Oh,yeah. 9 Kimco is going to put up money? 10 Q. What tasks would have to be undertaken prior 10 A. Uh-huh. 11 to closing? 11 Q. And the City will agree to repay that to 12 A. Well,we have to obtain all city approvals, 12 Kimco? 13 and the TIF has to be in place,and all issues with the 13 A. Correct. 14 EPA have to be resolved to the satisfaction of KDI. A 14 Q. And the money that Kimco puts up is in the 15 certain amount of leasing has to have occurred to the 15 form of its expenditures on things such as environmental 16 satisfaction of Target. 16 remediation,demolition at the site,correct? 17 Q. Anything else? 17 A. There's a whole list of things that were part 18 A. You know,there are numerous documents 18 of the application,and I'm not sure what all the items 19 obviously to effectuate those purposes,but I may be 19 are. I think part of it is environmental. Part of it 20 leaving something out,but those are the high points I 20 is off-site street improvements,which there was a 21 can remember. 21 significant amount of those. There was,again, 22 Q. When you say"obtain city approvals,"what 22 demolition of existing improvements. 23 city approvals are still necessary in order to close? 23 There was re-grading the entire site to 24 A. I'm not sure if we have all the final site 24 balance everything out. There is a lot of costs that 25 plan approvals,zoning,et cetera. We may have it. We 25 have to go into the project before you get back to zero, • 15 (Pages 54 to 57) KI FMM REPORTING SERVICES - (623) 5R1-2. (fl 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 58 Page 60 l you know. And that's really why the TIF is necessary, 1 A. Oral. 2 just a myriad of costs. 2 Q. What did she indicate her findings to be? 3 Q. With respect to shopping center developments 3 A. In general,that there's not a lot of retail 4 that you've been involved in previously,have you ever 4 in this market area around the Vickers plant,but that 5 had a situation where you had to knock down existing 5 it's going to be a tough site to lease because of 6 structures? 6 population trends. It was not a growing area 7 A. Absolutely. 7 specifically within the city;that the plant was in a 8 Q. With respect to shopping center developments 8 blighted area,and there were other areas throughout the 9 _ that you've been engaged in previously,have you been 9 city that had much higher growth rates. 10 engaged in situations where you have to make off-site 10 And just because of the size of Omaha, 11 improvements? 11 generally,the retailers that were coming there were 12 A. Yes. 12 focused on a limited number of areas. So the universe 13 Q. Is it fairly standard when you create a new 13 of potential interest to retailers was very limited. 14 shopping center that the local municipal body will 14 All of that just reinforced the need for a TIF 15 require you to make some street improvements? 15 to defer costs,because all the factors that I just 16 A. That is true. 16 outlined to you are reflected in the rents that 17 MR.in den BOSCH: Object to the form. 17 potential retailers can pay because of projected sales. 18 MR.SCAGLIONE: I don't know. 18 Since the population is low and the growth is 19 Q. BY MR.BOECKER: Typically,when you're 19 low--their costs are pretty standard across,you know, 20 engaged in developing shopping centers and things of 20 the national markets. It's going to be a tough project. 21 that nature,a city will require you to put in turn 21 Q. Did Ms.Iaboni indicate whether or not she 22 lanes,stoplights,things of that nature? 22 took into consideration that tax increment financing 23 A. Well,every project is different. I mean,you 23 would have on the project? 24 know,I've had projects where off-site amounted to 24 A. That wasn't her job. 25 $150,000,and I've had projects where off-sites amounted 25 Q. So 1 take it the answer is no,she did not do Page 59 Page 61 1 to$20 million. 1 that assessment? 2 It depends on a lot of economic factors and 2 A. Right. 3 circumstances regarding the individual sites,what the 3 Q. Did you report to Ms.Iaboni that you were 4 level of the off-site improvements are. So I don't know 4 seeking tax increment financing? 5 how else to answer the question. 5 A. I'm sure I mentioned it to her. 6 Q. In this case,did you undertake any studies as 6 Q. How many conversations with Ms.Iaboni did you 7 to expected traffic patterns? 7 have about this project? 8 A. There was a traffic study that was required by 8 A. Oh. I talk to her all the time about the 9 the City of Omaha,and I believe one was undertaken,and 9 project. 10 the results of that were incorporated into the plans for 10 Q. Do you know if she's visited the site? 11 the off-site improvements. 11 A. She has. 12 Q. Do you know if any projections were undertaken 12 Q. Has she visited with you? 13 as to what expected traffic was with the development of 13 A. No. She visited with Mr.Otis and 14 the site as opposed to existing traffic patterns? 14 Mr.Woltemath. 15 A. I believe so,yes. 15 Q. And do you know on how many occasions she has 16 Q. And do you know as to any projection as to 16 visited the site? 17 percentage increase in traffic volume? 17 A. At least once. 18 A. No. 18 Q. Has she reported to you any surveys that she 19 Q. Did Kimco or any of its affiliates undertake 19 has undertaken of any retailers relative to this site? 20 any market studies to assess whether or not this area 20 A. Yes,she has. 21 was a viable place for a shopping center? 21 Q. And what did she tell you in that regard? 22 A. I believe Deborah Iaboni did something on her 22 A. She said that there is a limited interest. 23 own and reported to us. 23 Q. Did she indicate to what retailers she had 24 Q. Was that in the form of a written report or 24 spoken to? 25 oral report? 25 A. Yes,she did. .16 (Pages 5.8 to 61' V1 1=MM DPD(1DTTNt; CPR\/TrFC — (F,7-11 cR1 —RS(ll 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 62 Page 64 1 Q. What retailers would that have been? 1 Q. Well, do you know if someone,in fact, did 2 A. I'm not going to disclose that based upon the 2 report that back? 3 prior comments of the attorneys. 3 A. No. 4 MR.SCAGLIONE: Reassert the object-ion and 4 Q. Do you have an understanding as to what the 5 move for protective order. This is Greg. 5 term"blighted"means under Nebraska law? 6 MR.BOECKER: Certify the same,and the same 6 A. I do not. 7 explanation I gave previously as to why it's relevant 7 Q. Do you have an understanding as to what the 8 and pertinent. 8 term"substandard"means under Nebraska law? 9 MR.SCAGLIONE: I'll reserve argument until 9 A. I do not. 10 the hearing. 10 Q. So I take it you would not be in a position to 11 Q. BY MR.BOECKER: Did Ms.Iaboni indicate 11 render an opinion as to whether or not this site was 12 whether or not she gave any consideration as to any 12 blighted under its meaning under Nebraska law? 13 impact the Benson Park Plaza retail center would have on 13 A. Absolutely not. 14 the proposed site of the Vickers site? 14 Q. And you would not be in a position to opine 15 A. I think there was—obviously,if she was 15 whether this site was substandard within its meaning 16 doing a retail study,she would have looked at any 16 under Nebraska law? 17 retail projects within a five-or ten-mile ring of the 17 A. That's also correct. 18 project. She referenced that project,as well as any 18 Q. Do you have a recollection as to when your 19 retail projects that are down as far south as 72nd and 19 conversation with Ms.Iaboni regarding that this would 20 Dodge. 20 be a tough area in terms of one to lease to third 21 Q. Do you have a recollection that she 21 parties occurred? 22 specifically referenced the Benson Park Plaza site as a 22 A. I think it's ongoing. 23 source of competition? 23 Q. Well,when is the last time that she said 24 A. Not specifically. 24 something to you along the lines that this will be a 25 Q. In your opinion and your experience,would the 25 tough site to lease? Page 63 Page 65 1 Benson Park Plaza be a source of competition for the 1 A. Yesterday. 2 proposed development at Sorenson Parkway? 2 Q. You mentioned one of the other things that 3 A. Yeah,I think so. 3 needs to be accomplished prior to closing would be the 4 Q. So you believe that your site would be 4 issues with EPA would have to be resolved. 5 competing with them for prospective tenants? 5 What did you mean by that? 6 A. Potentially,yes. You can't make a tenant go 6 A. Well,there are certain monitoring wells that 7 where he doesn't want to go. It's up to the tenant. 7 are on site,and certain extraction wells that are on 8 Q. You mentioned the term"blighted area" 8 site. The location of those monitoring and extraction • 9 relative to your discussions with Ms.Iaboni. 9 wells are positioned in such a way that they need to be 10 Do you remember her specifically using the 10 relocated. 11 word"blight"? 11 And while the sellers may have an ongoing 12 A. She may have. I'm not specific. I don't 12 obligation to remediate conditions,it's debatable 13 recall the specific conversations. 13 whether or not they have an ongoing obligation or an 14 Q. Did you ask her to undertake any assessment as 14 obligation to relocate them. 15 to whether this was a blighted or substandard area? 15 And so in addition,I think that a plan is • 16 A. No. 16 being developed by our consultants to get some kind of 17 Q. Do you know if Kimco asked anyone to take any 17 closure from the EPA which would allow some of the 18 assessment whether this area was blighted or 18 ongoing remediation to be either terminated or 19 substandard? - 19 relocated,and the consultants are coming up with a plan 20 A. I think that that would be one of the things 20 to implement that. 21 we would consider in evaluating the site. We may not 21 Q. Are you aware whether or not that plan has 22 have used that specific term,but one of the people that 22 been finalized yet? 23 reported back to us may have,you know,indicated that 23 A. I'm not aware of it,although we have 24 was their opinion as part of the general conversation 24 authorized the expenditure of the--you know,for the 25 about the entire project. 25 consultants to work on the plan. 17 (Pages 62 to 65) KLEMM REPORTING SERVICES - (623) 581-8503 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 66 Page 68 1 Q. You wouldn't walk away from this project if 1 A. Not how many tenants. How many square feet. 2 the EPA indicated that they weren't going to allow these 2 Q. Do you have a recollection roughly how many 3 wells to be closed,would you? 3 square feet it was? 4 A. Well,there's a number of reasons that we 4 A. I'm not sure. 5 would walk away from the project. You know,we have— 5 Q. Is it tens of thousands,hundreds of 6 we can walk away tomorrow if we decide that it's not 6 thousands? 7 economically feasible for one reason or another,either 7 A. I think it's a couple hundred thousand. I'm 8 because the TIT isn't in place or because other costs 8 not sure. 9 are escalating or because the level of leasing cannot be 9 Q. Based on your prior experience with Target,is 10 attained,despite all of our best efforts. 10 that a standard-type clause? 11 And one of the issues is the environmental. 11 A. Absolutely. Obviously,unless they're doing a 12 We have to be able to operate the center. If an 12 freestanding store. If they're in a shopping center, 13 extraction well was sitting in the middle of the Target 13 they want co-tenancy. 14 store,Target isn't going. 14 Q. Do you have any other prospects in place to 15 There are some things that have to occur. I 15 take a portion of this couple hundred thousand square 16 don't know specifically that Target is involved. I 16 feet that is needed? 17 don't think there are any of the wells that are on the 17 A. Yes,we do. 18 Target parcel. 18 Q. What status are you with them;are you to the 19 But the buildings have to be located in a 19 point where you're negotiating leases with them? 20 certain area,and we have to get those relocated. If 20 A. Yeah,some of them we're in negotiating 21 the EPA doesn't want to cooperate with us,then we can't 21 leases. 22 do the project. 22 Q. Have any of them been finalized? 23 Q. You mentioned Item 4,a certain amount of 23 A. No. 24 leasing has to occur to the satisfaction of Target? 24 Q. How many square feet do you currently have 25 A. Yeah,co-tenancy. We call that co-tenancy. 25 under negotiation,approximately? Page 67 Page 69 1 Q. Now,why would Target's opinion matter with 1 MR.SCAGLIONE: Mr.Brody,if you consider 2 respect to closing on the deal? 2 that information confidential or proprietary in any way, 3 A. Well,Target would not be obligated to close 3 you may decline to answer until the judge rules. 4 unless a certain level of leasing occurs in addition to 4 THE WITNESS: I so decline to answer. 5 Target. So if you have,you know,a 600,000 square foot 5 MR.BOECKER: Just for the record,that 6 shopping center proposed and Target is the only tenant, 6 question doesn't ask the identity. It asked square 7 they don't want to be there by themselves. 7 feet. I can't imagine the square feet would be 8 Q. And so if you don't have other tenants in 8 confidential. 9 place prior to the closing,Target can walk away from 9 MR.SCAGLIONE: Our client's business 10 this deal? 10 practices are not the subject of this suit. 11 A. Absolutely. • 11 MR.BOECKER: They are since you've said that 12 Q. Are you indicating if Target were to walk away 12 the project can't go forward without T1F,and you've 13 from this deal,that might affect whether or not Kimco 13. sought taxpayer financing. 14 closes? 14 Q. BY MR.BOECKER: Now that I've asked regarding 15 A. I guarantee we're not closing if Target 15 feet,you're still declining to answer? 16 doesn't close. It's all tied together,the tax ' 16 A. We're negotiating for over the threshold. 17 increment financing,Target's obligation and the 17 Q. Negotiating for over the threshold of Target? 18 leasing. It's kind of like a house of cards. 18 A. Yes. 19 Q. How many tenants do you have to get in there 19 Q. And in follow-up,I'll now ask you with whom 20 to satisfy Target? Is it subjective,or is it measured 20 are you negotiating? 21 by some-- 21 MR. SCAGLIONE: Same objections and 22 A. There's a number. 22 privileges. 23 Q. So in Target's purchase agreement,there is 23 Q. BY MR.BOECKER: Mr.Brody,you're refusing to 24 actually a provision that spells out how many tenants 24 answer that question? 25 you have to get? 25 A. Correct. 18 (Pages 66 to 69' VI FMM RFP(IRTTN( CFR\/T("FC - (F) cR1 -Rcn 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 70 Page 72 1 MR.BOECKER: I'll certify it for the reasons 1 A. No. 2 previously stated. 2 Q. Is that something that you believe may occur? 3 Q. BY MR.BOECKER: Are there any particular 3 A. It's possible. 4 brokers--not parties,but brokers that you are 4 Q. Just so.I understand the bottom line,in order 5 engaging in discussions with regarding space at the 5 to close with Eaton Corporation,you have to have Target 6 site? 6 in place. In order to have Target in place,you have to 7 A. 1 don't know the names of the brokers that our 7 have other tenants in place willing to lease at the 8 leasing people are negotiating with. 8 site,correct? 9 MR.SCAGLIONE: I did not hear that, 9 A. Correct. 10 Mr.Brody. 10 Q. Do you know if any of these other tenants have 11 THE WITNESS: I do not know the names of the 11 indicated they have co-tenancy issues? 12 brokers that the leasing people are negotiating with. 12 A. Absolutely. That's what the shopping center 13 Q. BY MR.BOECKER: How is it that you've become 13 business is. This is not unusual. 14 informed of these negotiations? Do you see written 14 Q. Are you aware whether or not any of these 15 material on it,or do you get oral reports from 15 prospective users of space within the shopping center 16 somebody? 16 have indicated to you or Mrs.Taboni whether or not they 17 A. I get a leasing report on a monthly basis and 17 think this is a difficult site to operate at? 18 speak to Deborah Taboni on a regular basis when she has 18 A. Obviously,when you're marketing it,you're 19 a question. 19 not telling retailers this is a difficult site. We're 20 Q. So the leasing report is something generated 20 providing them with demographic information and a 21 by Deborah Iaboni? 21 leasing package,and they do their own research. And 22 A. Correct. 22 the research dictates,you know--the research they do 23 Q. I take it by virtue of the fact that 23 dictates what they can afford to pay. So it's reflected 24 Ms.Iaboni mentioned to you yesterday that this 24 in the rents. 25 continues to be a tough site to lease,that there is the 25 Q. Have any of these prospective tenants shared Page 71 Page 73 1 potential that you might not achieve the threshold 1 with you any of their research findings? 2 necessary to satisfy Target? 2 A. No. 3 A. There is always a chance,yes,that's true. 3 Q. Within Exhibit 111,the draft redevelopment 4 The fact you're in negotiation with people over the 4 subdivision agreement,at Page 7,Section 3.5,there is 5 threshold doesn't mean when you get to the end of the 5 a paragraph labeled"Shopping Center Property 6 day,you're going to actually have a signed document 6 Improvements." And do you see where there is a figure 7 committing them to proceed. 7 referenced for a future valuation of the site? 8 Q. Is your contract with Vickers or Eaton 8 A. Uh-huh. 9 Corporation to acquire the site in any way contingent 9 Q. Is that a yes? 10 upon meeting these leasing thresholds? 10 A. Yes. 11 A. No. 11 Q. And what is that figure? 12 MR.SCAGLIONE: I'm going to object to best 12 A. $60,009,139. 13 evidence and parol evidence and move that the objection 13 Q. Did you participate at all in the preparation 14 be interposed prior to the answer and move to strike. 14 of that estimate? 15 MR. in den BOSCH: I'll join. 15 A. No. • 16 Q. BY MR.BOECKER: Have you had any discussions 16 Q. Do you know who would have? 17 with--do you understand whether or not there is sort 17 A. No,I don't know who specifically prepared the 18 of a drop-dead date along those lines with respect to 18 estimate or participated in it. 19 closing with Eaton Corporation? 19 Q. Have you had written e-mails or communication 20 A. I believe there is. 20 that you've exchanged with Mr.Woltemath or Mr.Otis? 21 Q. What is your understanding as to what that is? 21 A. Yeah. 22 A. I don't know the specific date. 22 Q. Okay. How frequently? 23 Q. Have you had any discussions with anyone about 23 A. Couple times a week,probably. 24 seeking an enlargement or extension of that in order to 24 Q. Have you undertaken any effort to assemble the 25 accomplish this leasing? 25 e-mail and correspondence? 19 (Pages 70 to 73; KI FMM RFPORTING SERVICES - (623) 581-8503 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 74 Page 76 1 A. No. 1 designation of the property at 6600 North 72nd Street in 2 Q. Okay. So you haven't made copies of that 2 Omaha,Nebraska,as blighted and substandard? 3 documentation to provide to your attorneys to produce it 3 MR.in den BOSCH: Objection to foundation. 4 here today? 4 MR.SCAGLIONE: Join. 5 A. No. I assumed that Mr.Otis has copies of it, 5 MR.BOECKER: It's a foundational question. 6 and he would have done that. Again,I haven't been in 6 MR.SCAGLIONE: Go ahead and answer,sir. 7 the office. 7 A. BY THE WITNESS: Could you repeat it? 8 Q. Do you know if there would be any written 8 Q. BY MR.BOECKER: Yes. Have you attempted to 9 communication with the City of Omaha other than 9 inform yourself or educate yourself about any 10 Exhibit 108,your letter to Mr. Johnson? 10 information in the possession of KD Omaha 1103,Inc., 11 A. Not that I'm aware of. 11 which it believes justifies designation of the property 12 Q. Are you aware of any communication that Kimco 12 at 6600 North 72nd Street in Omaha,Nebraska,as 13 Development or KD Omaha 1103 transmitted to Eaton 13 blighted and substandard? 14 Corporation or any of its affiliates? 14 A. No. 15 A. No. 15 Q. Do you have knowledge of any information in 16 Q. Has Kimco Development or KD Omaha engaged in 16 possession of KD Omaha 1103,Inc.,which it believes 17 any preliminary discussions with any prospective lenders 17 reflects that but for TIF financing,the Sorenson 18 for the financing? 18 Parkway Plaza project would not proceed? 19 A. No. 19 A. The pro formas and the budgets that have been 20 Q. Are there lenders that you typically use on 20 prepared demonstrate that need. 21 these projects,or is it market driven? 21 Q. You would have knowledge of the identity of 22 A. It's market driven and regionally driven. 22 any tenants or other users of prospective space in the 23 Q. You wouldn't have knowledge of what documents 23 property,correct? 24 were reviewed or relied upon in any way in preparation 24 A. Yes. 25 for the budgets or forecasts for this project? 25 Q. But you're not--other than Target,you're Page 75 Page 77 1 A. No. 1 not willing to disclose those prospective users of 2 Q. And you wouldn't have any knowledge of the 2 space? 3 documents reviewed or relied upon in support of the 3 A. That's correct. 4 calculation of costs to be incurred on the project? 4 Q. Are you aware of any information which 5 A. No. 5 supports the claim that the property located at 6 Q. You were involved in the negotiation of the 6 6600 North 72nd Street in Omaha,Nebraska,could be 7 joint venture agreement of Woltemath-Otis Development, 7 viable as a commercial retail center? 8 Inc.? 8 A. With a TIF,yes. 9 A. Correct. 9 Q. What information would that be? 10 Q. ,Other than what you've discussed here today in 10 A. Well,just based upon the pro formas and the 11 terms of City approvals,EPA approval,satisfaction of 11 budgets prepared by our consultants and our joint 12 the Target co-tenancy obligations,are you aware of any 12 venture partner with our assistance. 13 other contingencies that have been imposed by KD Omaha 13 Q. Do you have knowledge of the contents and 14 1103 prior to closing on the real estate purchase 14 purpose of any communication between attorneys for KD 15 agreement with Eaton? 15 Omaha 1103,Inc.,and any attorneys,representatives or 16 MR.SCAGLIONE: Objection;best evidence and 16 employees of Eaton Corporation or Eaton Hydraulics? 17 parol evidence. This is Greg. 17 A. I don't know of any conversations that.have 18 MR.in den BOSCH: Join. Bernard. 18 taken place. There may have been some,but I'm not 19 MR.SCAGLIONE: You may answer if you can, 19 aware of them. 20 Mr.Brody. 20 Q. Have you undertalcen any effort to inform I 21 A. BY THE WITNESS: Other than the four 21 yourself one way or the other prior to today's 22 categories I listed,no. 22 deposition? 23 Q. BY MR.BOECKER: Have you sought to.inform 23 A. I haven't made an independent investigation, 24 yourself or educate yourself about any information about 24 no. I'm just not aware of any. 25 possession of KD Omaha 1103,which it believes justifies 25 Q. Are you aware of the amount and calculation of . 20 (Pages 74 to 77 vi Cnnnn DCD(1DTTnlr CGD\/Tf FC - (F,7�) cR1 -Rcnn 1 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 78 Page 80 l alleged damages KD Omaha 1103,Inc.,contends it will 1 A. No. 2 suffer if a temporary or permanent injunction is entered 2 Q. Well,Target has a written document that says 3 against rezoning of this property or against designation 3 you have to get a certain threshold,right? 4 of this property as blighted and substandard? 4 A. Yes. 5 A. It would be a significant amount of dollars, 5 Q. So you have to get Target to waive that 6 just based upon what we've already put in the project 6 requirement? 7 between ourselves and our partner. 7 A. That's correct. 8 Q. Do you laiow the exact dollar figure? 8 Q. Are you aware of other occasions where Target 9 A. It's probably approaching or will approach a 9 has waived that requirement? 10 million dollars. 10 A. Yes,I am. 11 Q. Have you undertaken prior to today's 11 Q. Has Target indicated that they will waive that 12 deposition any effort to calculate that with any better 12 requirement in this case? 13 precision? 13 A. Not specifically,no. 14 A. Well,Mr.Lally has an ongoing tally,based 14 Q. Do you have an understanding whether or not 15 upon consultants and what we've paid and what 15 the Omaha City Council gave a recommendation or approval 16 Mr.Woltemath and Mr.Otis have paid and what remains to 16 of TIF financing for this project on February 4th,2004? 17 be paid or incurred as we move forward to the closing of 17 A. I believe they did. 18 the transaction. 18 Q. And notwithstanding that approval for tax 19 Q. Okay. So Mr.Lally would be in a better 19 increment financing you were still told as late as 20 position to answer how those figures were calculated? 20 yesterday by your consultant that this would be a 21 A. They were calculated by adding up the expenses 21 difficult site to lease,correct? 22 that have been incurred. 22 A. That's correct. 23 Q. Have you had any discussions with Mr.Lally 23 Q. So even if you do get TIF financing,you still 24 regarding his calculations? 24 may not be able to lease this site,correct? 25 A. No. I've seen them. 25 A. I think the site is a difficult one to lease, Page 79 Page 81 1 Q. Now,if Kimco walks away from this project I just for all the reasons that I previously stated. That 2 because of the inability to obtain the Target leasing 2 doesn't mean we wouldn't go forward. 3 thresholds,would it incur those same losses,even if it 3 We would close--personally,Kimco would 4 is approved for TIF financing? 4 close with less than the threshold if Target would waive 5 A. Theoretically,yes. 5 it. 6 Q. So there are other mechanisms that can trigger 6 I'm confident that we will achieve--the 7 those losses other than just the deprivation of TIF on 7 difficulty in leasing is reflected in the length of time 8 this project? 8 that it takes to lease it,not specifically in--it's 9 A. Well,the TIF is the catalyst from which 9 not—you know,we've got projects right now that are 10 everything else would be triggered. Any of the other 10 basically 100 percent--110 percent committed before we 11 issues can be overcome based upon our relationships with 11 break ground. This is not one of those projects. 12 Target and the other retailers. Without the TIF, 12 So it's just a reflection of the market. That 13 though,we can't go forward. 13 doesn't mean we're not interested in doing the project. 14 Q. So you're saying if you get the TIF,the 14 Q. Well,how long do you think it might take to 15 co-tenancy issues with Target will disappear? 15 reach these co-tenancy threshold levels? 16 A. They won't disappear,but they will be-- 16 A.• Could happen tomorrow. 17 we'll be able to work through them. 17 Q. Could happen six months from now,correct? 18 Q. What do you base that statement on? 18 A. Possibly. 19 A. Just our history,our relationship with Target 19 Q. As you sit here today,you can't say with 20 and our relationship with current tenants. 20 absolute certainty that you will satisfy the Target 21 Q. What current tenants? 21 tenancy thresholds by July 15th,2004,can you? 22 A. I mean tenants that we currently have in other 22 A. I can't guarantee it. 23 projects that have expressed an interest in going 23 Q. As the 30(b)(6)representative of KID Omaha 24 forward in this project. 24 1103,Inc.,can you guarantee that there will be a 25 Q. But you won't identify who those tenants are? 25 closing on this property if Target does not agree to • 21 (Pages 78 to 81, VI FMM RFPf1RTTN( cFR\/T('Fc - (t 7Rl 5R1-RS(1� 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 82 Page 84 1 waive any co-tenancy threshold requirements? 1 Parkway Plaza project? 2 A. No. 2 A. There are none. 3 MR. SCAGLIONE: Objection;form and 3 Q. Well,from what source,then,did the budget 4 foundation. This is Greg. 4 project construction costs? 5 MR. in den BOSCH: Join. 5 A. From the engineers and other sources that 6 A. BY THE WITNESS: I don't know what is in 6 Mr.Otis was privy to and our joint venture partner in 7 Target's mind. 7 Omaha. 8 Q. BY MR.BOECKER: Do you know the basis for the 8 Q. So the figures set forth in the pro forma 9 allegation that KD Omaha 1103,Inc.,is a Nebraska 9 submitted to the City of Omaha are not based upon any 10 taxpayer? 10 actual bids or estimates from actual contractors? 11 A. No. 11 MR.SCAGLIONE: Objection;foundation. 12 Q. KD Omaha 1103,Inc.,to the best of your 12 Q. BY MR.BOECKER: Correct? Is that correct,to 13 knowledge,does not currently own any real estate in the 13 the best of your knowledge? 14 state of Nebraska,does it? 14 A. I'm not aware of that. I'm not aware of who 15 A. Not to the best of my knowledge. 15 was consulted in the preparation of it. 16 Q. To the best of your knowledge,you're not 16 Q. So you don't know what source they relied 17 aware that it has paid any property taxes within the 17 upon? 18 state of Nebraska? 18 A. Right. 19 A. I'm not aware of that. 19 Q. Do you know what comparable properties were • 20 Q. Are you aware of any proof that KD Omaha 1103, 20 examined in determining the estimate of the future value 21 Inc.,is a taxpayer to the City of Omaha? 21 of this project? 22 A. Not aware of that. 22 A. No. 23 Q. Were you aware that there was a request to 23 Q. And you didn't bring with you any copies of • 24 produce certain documents here at your deposition today? 24 comparables reviewed or relied upon,correct? 25 A. I was aware of that,and I was advised by my 25 A. No. Don't have any in my possession. Page 83 Page 85 1 attorney that the documents-- 1 Q. And you didn't bring with you here today any 2 MR. SCAGLIONE: Mr.Brody,please don't 2 copies of budgets or pro formas or any source and use of 3 communicate our discussions. 3 funds documents relating to this project? 4 TIE WITNESS: All right. 4 A. That's correct. 5 Q. BY MR.BOECKER: You were aware--from 5 Q. You didn't bring with you here today any 6 whatever source--that there was a request to produce 6 budgets,financial projections,pro formas or forecasts 7 documents here today,correct? 7 related to the calculation of any yield return of profit 8 A. I understood that the documents had been 8 requirements by KD Omaha 1103,correct? 9 produced. 9 A. That's correct. 10 Q. You have not brought with you here today any 10 Q. You didn't bring with you today any documents 11 documents,correct? 11 relating to or reflecting the calculation of assumed 12 A. Correct. 12 future value of the subject property,correct? 13 Q. You've not brought with you here today any 13 A. Correct. 14 documents reviewed or utilized in preparation for the 14 Q. And you haven't assembled and produced today 1 15 deposition,correct? 15 copies of the communication between KDI Omaha,L.P.,and 16 A. Correct. 16 KD Omaha 1103,Inc.,correct? 17 Q. You have not brought with you here today a 17 A. Correct. 18 copy of the joint venture agreement executed by or 18 Q. You haven't brought with you here today any 19 affecting KD Omaha 1103,Inc.,correct? 19 documentation in the possession of KD Omaha 1103,Inc., 20 A. Correct. 20 which it believes justifies the designation of the 21 Q. You've not brought with you here today any 21 property at 6600 North 72nd Street in Omaha,Nebraska, 22 documents transmitted to or received from any 22 as blighted and substandard,correct? 23 contractors including,but not limited to,any bid or , 23 A. That's also correct,yes. 24 estimate documents reviewed or relied upon in 24 Q. And,in fact,you wouldn't be aware of any 25 preparation for any of the budgets for the Sorenson 25 such documentation,would you? 22 (Pages 82 to 85 1 vi rnnnn ncnnn- rnl(` CD\/TC C - (t32) c5:21-R' Ifl 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 86 Page 88 1 A. I'm not aware of it specifically,no. I identification.) .. Q. BY MR.BOECKER: Mr.Brody,I'm going to show 2 Q. Other than the pro forma that you referenced 2 Q 3 previously,are you aware of any document in the 3 you what has been marked as Exhibit 112,a documentation 4 possession of KD Omaha 1103,Inc.,which it believes 4 produced to me yesterday by your counsel,and ask you to 5 reflects that but for TIF financing,the Sorenson 5 take a moment to review that material and ask you if 6 Parkway Plaza project would not proceed? 6 you've seen that before. 7 A. I'm not aware of that, no. 7 A. I haven't seen it. 8 Q. Are you aware of any documentation--strike 8 Q. Just for record purposes to identify it,it's 9 that. 9 something on Woltemath-Otis Development letterhead memo. 10 Well,first,are you aware if there is any 10 Do you see that? It references notice of 30(b)(6) 11 documentation reflecting the identity of any tenants or 11 deposition of KD Omaha 1103,Inc.? 12 other prospective users of space at the property? 12 A. Correct. 13 A. Yes,there are. 13 Q. Okay. But you haven't seen that document 14 Q. Okay. That would include the leasing reports 14 prior to today's deposition? 15 that you receive from your consultant,correct? 15 A. No. 16 A. Yes. 16 Q. Do you have any idea what it relates to? 17 Q. That would include the documents exchanged 17 A. Exhibit A,Item 27,so some list probably 18 with Target,correct? 18 attached to the deposition notice. That's what I would 19 A. Yes. 19 surmise,although I don't know specifically. 20 Q. Anything else; any other categories of 20 Q. Do you have an understanding as to whether or 21 documents you would be aware of? 21 not Woltemath-Otis has billed sums to Kimco or KD Omaha 22 A. No. 22 1103,Inc.,to date? 23 Q. And you haven't brought with you here today 23 A. Them specifically? 24 any of that documentation,correct? 24 Q. Yes. 25 A. Correct. 25 A. They may have billed some items if they have Page 87 Page 89 1 Q. And you haven't brought with you here today 1 paid them and are seeking reimbursement,yes,and we 2 any documentation transmitted to or received by any 2 have paid some to them,yes. 3 attorneys for KD Omaha 1103,Inc.,from any attorneys, 3 Q. Do you have an understanding what the 4 representatives or employees of Eaton Corporation,Eaton 4 agreement is,whether it is 50-50 or 100 percent 5 Hydraulics or any affiliates thereof,correct? 5 reimbursement or what the arrangement is? 6 A. That's correct. 6 A. I have an understanding of what the agreement 7 (Deposition Exhibit Number 112 was marked for 7 is,yes. 8 identification.) 8 Q. And what is your understanding? 9 MR.BOECKER: Greg and Bernard,I think the 9 A. It's based on certain performance standards, 10 court reporter needs a break for a while. And I'm going 10 the amount of reimbursement. It's based on certain 11 to go a while longer,at least another 45 minutes. So I 11 performance standards. There were some expenses that 12 propose we take a ten-minute break. 12 were incurred that were reimbursed 50 percent. 13 Is that okay? 13 And the earnest money that they have up,which 14 MR.SCAGLIONE: Okay. 14 I think is somewhere in--the initial earnest money of 15 MR.BOECKER: How do you want to handle this? 15 $100,000 does not get reimbursed until the closing. 16 It's 11:18 right now. Do you want to call back at 16 Then there is another amount of reimbursement 17 11:30? 17 that occurs when the leasing threshold is achieved. 18 MR.SCAGLIONE: You think you have 45 more 18 Q. All right. If you can explain it,if you 19 minutes? 19 know,if you don't know,then tell me,but I'm trying to 20 MR.BOECKER: Yeah. Potentially more,because 20 understand what this memo is explaining. 21 I usually go long. I do have a while longer. 21 There is a reference,"Limited partnership 22 MR.SCAGLIONE: That's fine. 22 agreement ofKDI Omaha,L.P.,Exhibit C-1 $161,676.02." 23 MR.BOECKER: We'll resume at 11:30. 23 Do you have any idea what that relates to or 24 (Recess ensued from 11:18 a.m.until 11:33.) 24 is referring to? 25 (Deposition Exhibit Number 113 was marked for 25 A. Well,without having the background--or the 23 (Pages 86 to 89. VI CMM DEDC'DTTnMr ClD\/TrPC - (A-fll S5:21 -Rc(1'1 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 90 Page 92 1 backup document in front of me,which I don't see it 1 lost if the project did not go forward because the deal 2 here,I can't really tell you what it is. 2 with Target fell through,correct? 3 Q. Okay. 3 A. These and among others,yes. 4 MR. SCAGLIONE: Just for the record,the 4 Q. I'm going to direct your attention to 5 documents C-1 and C-2 are attached to the Limited 5 Exhibit C-2. 6 Partnership Agreement of KDI Omaha,L.P.,which was 6 A. Uh-huh. 7 produced to counsel for plaintiff. 7 Q. And do you see where that references a total 8 THE WITNESS: Yes. 8 expenditure of approximately$128,198.29? 9 MR.BOECKER: Please mark this. 9 A. Uh-huh. 10 THE WITNESS: There you go. 10 Q. Is that a yes? 11 (Deposition Exhibit Number 114 was marked for 11 A. Yes. 12 identification.) 12 Q. Do you have an understanding as to what 13 Q. BY MR.BOECKER: Mr.Brody,I'm going to show 13 Exhibit C-2 is attempting to represent? 14 you Exhibit 114,Limited Partnership Agreement of KDI 14 A. Those are the expenses that occurred--that 15 Omaha,L.P.,bearing the date of November 20th,2003. 15 were incurred by Woltemath-Otis prior to the date of the 16 See that? 16 Target LOI being executed. 17 A. Yes. 17 Q. Now,all of these expenditures with Koley 18 Q. Is that a document--are you aware if there 18 Jessen,do you have any idea what they relate to? 19 have been any amendments or supplementations to that 19 A. That's a law firm,so that's their legal 20 document? 20 expenses of one nature--you know,one nature or 21 A. I'm not aware of any. 21 another. 22 Q. I'm going to show you Exhibit C-1 to 22 Q. You don't know the exact nature of those legal 23 Exhibit 114. 23 expenses? 24 Do you see Exhibit C-I? 24 A. No,I don't. 25 A. Yes. 25 Q. You don't know what activity they relate to? Page 91 Page 93 1 Q. Does it reference a total project cost? 1 A. Well,they relate to the project. I know 2 A. It represents a recap of the expenses 2 that,because they wouldn't be on here if they didn't. 3 post-Target LOI of 8161,676.02. 3 Q. Have you seen the underlying invoices? 4 Q. Do you have an understanding of what those 4 A. I know they have been reviewed by Rick Lally. 5 expenses are recapping,what is trying to be reflected 5 Q. But you haven't personally seen them? 6 there? 6 A. I may have seen them. They were legal 7 A. Yeah. It reflects expenses that were incurred 7 expenses that were incurred by Mr.Woltemath and 8 from the date that the Target LOI was signed to the date 8 Mr.Otis. 9 of the exhibit,October 30th of'03. 9 Q. They would be in your possession,and 10 Q. And it references expenditures with Haley& 10 Mr.Lally reviewed them, correct? 11 Aldrich? 11 A. Yes. 12 A. Yes. 12 Q. There is a reference to earnest money paid, 13 . Q. Fullenlcamp Doyle&Jobeun? 13 100,000. 14 A. Correct. 14 Is that your understanding of the initial down 15 Q. Koley Jessen? 15 payment to secure this site in connection with the 16 A. Correct. 16 purchase agreement with Eaton? 17 Q. And Woltemath-Otis Development? 17 A. Correct. 18 A. Correct. Meyer&Associates,and there is 18 Q. And again,all of these expenditures would 19 Thiele Geotechnical,so there are some other items on 19 also be lost if,for some reason,the transaction with 20 there,too. 20 Target fell through and the deal did not proceed 21 Q. Now,all of these expenses were incurred prior 21 forward,correct? 22 to any action by the city council to award tax increment 22 A. Yes. 23 financing,correct? 23 Q. I'm going to show you what has been previously 24 A. Correct. 24 marked as Deposition Exhibit 74 in this case,and ask 25 Q. And these expenditures would be incurred and 25 you if you've ever seen that document before. 24 (Pages 90 to 93. • Vl 1=MM PFP(1PTTN(- -. cFRVTC'Fc - (623) SR1-R5n3 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 94 Page 96 1 A. No. I don't recall seeing it. 1 A. It is. .. 2 Q. It's labeled"Source and Use of Funds." Do 2 Q. Do you have any reason to doubt the accuracy 3 you see that? 3 of the limited partnership agreement reflected by 4 A. Yes. 4 Exhibit 114? 5 Q. And it relates to the Sorenson Parkway Plaza; 5 A. No. 6 is that correct? 6 Q. As of October 31st,2003,KDI Omaha Limited 7 A. Yes. 7 Partnership did not own the property located at 8 Q. And that would be the project that you had 8 6600 North 72nd Street in Omaha,Nebraska,correct? 9 contemplated currently at the Vickers site,correct? 9 MR.SCAGLIONE: Object to the form. 10 A. Correct. 10 A. BY THE WITNESS: The property is owned by 11 Q. When you referenced that you had seen a budget 11 Eaton-- 12 or pro forma of some nature,was it something other than 12 Q. BY MR. BOECKER: Okay. 13 what is reflected in Exhibit 74? 13 A. --or Vickers. I don't know. Whichever one 14 A. Yes. 14 is in title. My understanding is that we had authority 15 Q. Do you know how many pages the budget or 15 from Vickers to proceed and process,which we did. 16 pro forma that you had seen comprised of? 16 Q. Are you aware of any written authorization to 17 A. Three or four. 17 seek rezoning of the property by Vickers? 18 Q. Did it have the same general format,or did it 18 A. I think it may have been specifically in the 19 have a different type of layout? 19 contract or may be inferred by the contract,and 20 A. Well,the budget that I saw had more than just 20 certainly was not objected to by Eaton,which I assume 21 the items contained on Exhibit 74. 21 it was aware of what was going on. 22 Q. So there is more detail to it? 22 Q. Do you have any personal knowledge based upon 23 A. Yeah. There are no buildings shown on here. 23 communication with Eaton that they were aware of what 24 This looks to be a little bit similar. 24 was going on? 25 Q. Okay. I'm going to show you what has been 25 A. No. Page 95 Page 97 1 marked as Deposition Exhibit 82. 1 Q. Do you have any personal knowledge that Eaton 2 Have you ever seen that document before? 2 authorized the designation of the property at 6600 North 3 A. No. 3 72nd Street in Omaha,Nebraska,as blighted and 4 Q. Okay. It's a document labeled"Application, 4 substandard? 5 subdivision plat,"dated 10/31/03,correct? 5 A. No. 6 A. Correct. 6 Q. Directing your attention to Exhibit 114 at 7 Q. And it has at the bottom signature line 7 Page 11,Subparagraph G on Page 11,do you see that? 8 Mr. Otis's signature. Do you see that? 8 A. I do. 9 A. Yes,I do. 9 Q. Now,the section that the Subsection G falls 10 Q. For reference it says,"KDI Omaha,L.P.,"and 10 under begins on Page 10,labeled Section 1.54, 11 under that"Woltemath-Otis Development"? 11 "Subsequent funding conditions,means all the 12 A. Yes. He executed them with our authority. 12 following." Is that correct? 13 Q. Did you provide any written authority to 13 A. Yes. 14 execute that document? 14 Q. And Subsection G references that a"Tax 15 A. I don't specifically-know if we did or not, 15 increment financing agreement providing for the 16 but if not,we will definitely ratify it in writing as 16 reimbursement of costs no less than$3 million," 17 appropriate. I have no problem with his authority. He 17 correct? 18 was responsible for all of these. 18 A. Yes. 19 Q. Well,that document is dated October 31,2003, 19 Q. So in November of 2003,your minimum 20 but,in fact,you did not enter into the limited 20 requirement necessary to proceed was$3 million in TIF 21 partnership agreement with Woltemath-Otis Development, 21 financing;is that correct? 22 Inc.,until November 20th,2003,correct? 22 A. That was what was contained in the agreement, 23 A. That's what the date shows,yes. 23 yes. 24 Q. And that date is actually handwritten into 24 Q. At one point in time did it go from$3 million 25 that document,correct? 25 to$8,490,000? 25 (Pages 94 to 97' VI cnnnn ncnnDTTnir: CCD\/TrGC _ ta-rn IQi _QE(1'2 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 98 Page 100 1 A. Obviously it did. I A. No. 2 Q. Do you know what time it did? 2 Q. Do you contend or believe that they initially 3 A. I think as--you know,the budget is kind of 3 misled you into this project? 4 an ongoing development,and as additional cost items are 4 A. No. It just reflects the change of 5 recognized and more rental areas that we had anticipated 5 circumstances over time. 6 may be coming down,then the budget is adjusted overall. 6 Q. But you can't tell me precisely what the 7 Q. Can you tell me with any degree of specificity 7 change in circumstances were? 8 what justified the change from$3 million to$8,490,000? 8 A. No. I think the documents that were filed 9 A. I think it was a combination of having a 9 with the City accurately reflect what the costs were at 10 little bit better handle on what the costs were and a 10 the time that the letters were written and the 11 better handle on what the rental numbers were that we 11 applications were filed. 12 were going to be able to achieve,the combination of 12 Q. Well,are you aware that Mr.Jobeun 13 those two. 13 represented to the city council that he believed the 14 Q. Okay. Tell me what your handle or 14 environmental cleanup costs would be less than what was 15 understanding of the construction costs was as of 15 projected by the environmental engineers? 16 November 2003 when the$3 million figure was referenced. 16 MR.SCAGLIONE: Objection;form and 17 A. Well,that was the number that was considered 17 foundation. This is Greg. 18 by the executive committee and was not changed at the 18 MR.in den BOSCH: I'll join. This is 19 time of the drafting of the agreement. 19 Bernard. 20 Q. Can you tell me with any degree of specificity 20 A. BY THE WITNESS: I wasn't there. I don't know 21 the dollar amount by which construction costs changed 21 what was represented where. 22 from November 20th,2003,until your letter--well, 22 Q. BY MR.BOECKER: You didn't attend the 23 strike that. 23 presentation before the Omaha City Council? 24 Actually,you had informed Mr.Johnson on 24 A. I haven't been at one hearing. 25 October 31,2003,that you needed$8.49 million, 25 Q. And did not,of course,attend the hearing Page 99 Page 101 1 correct? 1 before the Omaha Planning Board? 2 A. Yes. 2 A. No. 3 Q. Then subsequent to that,you executed a 3 Q. Can you tell me with any degree of specificity 4 document that indicated the minimum required TIF was 4 what the change was in terms of rentals that you 5 $3 million,correct? 5 expected to receive? 6 A. Correct. 6 A. Yeah. I think they dropped probably 7 Q. So at the time that you executed the document, 7 20 percent or so. 8 you knew a pay request for$8.49 million in T1F had been 8 Q. Who presented the initial figure that was the 9 requested? 9 threshold to begin with? 10 A. Absolutely. 10 A. Mr.Otis and Mr.Woltemath. 11 Q. But you chose not to include that figure in 11 Q. And what figure were they quoting? 12 the partnership agreement? 12 A. I don't know. 13 A. The investment committee had approved it with 13 Q. It was a square foot rental? 14 the$3 million TIF,which was the information that we 14 A. Yeah,it was based upon certain square footage 15 were looking at initially before we had a better handle 15 for different sized tenants over the number of,you 16 on the cost. 16 know,square footage in the project. 17 Q. When you say you had"a better handle,"can 17 Q. Olcay. Do you know or have an estimate;are we 18 you give me any specificity as to the dollar amount, 18 talking$20 a square foot or$100 a square foot,$2 a 19 which items changed in terms of cost? 19 square foot? 20 A. No. It was based on the information that we 20 A. No,I don't recall. 21 were receiving from Mr.Otis and Mr.Woltemath and their 21 Q. Do you have any estimate or recollection 22 consultants. 22 whatsoever? 23 Q. Is there any contention that the information 23 A. No. 24 that you initially received from Mr.Woltemath or 24 Q. You've said it's decreased to 20 percent. 25 Mr. Otis that were consultants was false or erroneous? 25 What has it decreased down to? 26 (Pages 98 to 101' vi FMM RFPC)RTTN(; SFRVTCFS - (623) 581-8503 , 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 102 Page 104 1 A. Single digit. l believe would be affected by the TIF being reduced to 2 Q. Can you give me any greater specificity other 2 $8 million? 3 than that? 3 A. Being reduced to$3 million? 4 A. Depending on the tenant,anywhere from$9 and 4 Q. No. Being reduced to$8 million,for purposes 5 change to below that. There may be tenants that pay . 5 of my hypothetical question. 6 more because of their size,but for the main anchors,I 6 A. Oh,being reduced to$8 million. I don't 7 don't believe there are any that are double digit,and 7 know. Based on the current costs,the project might not 8 the average would be in single digit. 8 be feasible. 9 Q. What is Target at? 9 Q. Well,can you direct my attention to any 10 A. They're not paying rent. They're buying. 10 clause that would allow you to back out on that basis? 11 Q. At the time you entered into the limited 11 MR. SCAGLIONE: Foundation and form. This is 12 partnership agreement,were you assuming that Target was 12 Greg. 13 buying? 13 A. BY THE'WITNESS: Well,again,that's not the 14 A. Yeah. 14 only condition that has to be satisfied prior to the 15 Q. That's always been the underlying operative 15 closing. 16 assumption,that Target was going to buy space,correct? 16 Q. BY MR.BOECKER: What other conditions would 17 A. Absolutely. 17 be affected by tax increment financing of those listed 18 Q. Did you assume that any other parties would be 18 in your document here? 19 buying space? 19 A. All the conditions here don't relate to the 20 A. It was possible. There was another major 20 tax increment financing. I mean,we've got,again— 21 anchor that they would want to buy. 21 there are extraneous documents,like,we condition on 22 Q. Have you had discussions with anyone else that 22 the Target closing,so if Target doesn't close for one 23 you consider a major anchor? 23 reason or another—Target could decide,you know what? 24 A. Yes. 24 We're not doing this project. 25 Q. Who are they? 25 So everybody could be moving forward,and Page 103 Page 105 l MR.SCAGLIONE: Same objection;privilege. 1 Target decided not to close,then we don't close. I 2 MR.BOECKER: Certify it for the same reasons 2 don't know what would be in Target's mind,but they 3 earlier noted. 3 could decide not to do that. 4 Q. BY MR.BOECKER: Are you aware of any 4 We have to get our environmental clearance. 5 modification to the limited partnership agreement which 5 We have to get nonappealable approvals. We have been 6 changes Subsection D to reflect the$8.49 million 6 through this list a couple of times. 7 figure? 7 Q. All right. Let's assume that al�our other 8 A. No. 8 conditions are satisfied. You have the Target 9 Q. So based upon your training and experience in 9 co-tenancy issue satisfied. You have the issues with 10 the real estate industry,as,well as your training and 10 the EPA satisfied. You have all the rezoning satisfied. 11 experience as an attorney,if you got an award of tax 11 If you were to get,under my hypothetical 12 increment financing of$8 million,that condition would 12 $8 million of TIF as opposed to$8.49 million of TIF, 13 still be satisfied,correct? 13 under your agreement you would still be obligated to 14 A. It would be for purposes of that one clause, 14 proceed with closing,correct? 15 yes. 15 MR. SCAGLIONE: Form and foundation;parol 16 Q. Well,are you aware of any other clause that 16 evidence;best evidence. This is Greg. 17 imposes a minimum on the tax increment financing amount 17 MR. in den BOSCH: Join. This is Bernard. 18 other than Subsection G? 18 MR. SCAGLIONE: Mr. Brody may answer. 19 A. No. 19 A. BY THE WITNESS: I think that's probably a 20 Q. So would you agree that you would be obligated 20 reasonable assumption. 21 to proceed with your obligations under the limited 21 Q. BY MR.BOECKER: And,in fact,if you met all . 22 partnership agreement if you received a hypothetical sum 22 the other conditions and you had any amount of TIF to 23 of$8 million in tax increment financing? • 23 approve over$3 million,you would still be obligated to ` 24 A. Well,if that was the only condition. 24 close,correct? 25 Q. Are there any other conditions that you 25 MR. SCAGLIONE: Same objection. 27 (Pages 102 to 105' i'u MKAKA r)r rInn-rTnlr ccD\ITrGC _ (g-Yn IQ1 _QI(1'2 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 106 Page 108 1 MR.in den BOSCH: I'll join. This is 1 Q. There is a development fee paid to the general 2 Bernard. 2 partner for certain services, correct? 3 Q. BY MR.BOECKER: You can answer. 3 A. Yes. 4 A. Under the same circumstances,yes. 4 Q. There's a reference in item 2 of Exhibit D-1, 5 - Q. Do you know if a bank account has actually 5 "Budget: General partners shall provide Class B limited 6 been opened for KDI Omaha,L.P.? 6 partner any comments and/or approval of any requested 1 7 A. I don't think so. 7 modifications of budget." 8 Q. Are you aware-- 8 Do you see that? 9 A. There is an account,you know,an 9 A. Yes. 10 accounting--there is an accounting--there is a 10 Q. So at the time that you entered into this 11 number that's been assigned to it,but I don't think 11 agreement in November of 2003,there was already a 12 there is a separate bank account. 12 budget in place for the project? 13 Q. Okay. You're not aware of any separate bank 13 A. Correct. 14 account for KID 1103 Omaha,Inc.,are you? 14 Q. And is it your understanding that that budget 15 A. I'm not aware of it. 15 would have reflected the 11 percent return? 16 Q. Are you aware of any actual cash contributions 16 A. It may have. I can't recall whether it did or 17 that have been made into any account controlled by KDI 17 not. That's a general guideline. We've got projects 18 Omaha,L.P.,or is it just in the manner of accounting 18 approved with less than that. 19 entries? 19 Q. Have you ever required more than that for a 20 A. Accounting entries. I don't know if any 20 project? 21 accounts have been opened by Mr.Woltemath and Mr.Otis. 21 A. Sometimes 11 and a half. 22 Q. Are you aware whether or not there is any 22 MR.BOECKER: Greg or Bernard,are you aware 23 provision in the limited partnership agreement of KDI 23 of any other budget document other than the source and 24 Omaha,L.P.,that references the 11 percent return that 24 use of funds documents provided by Mr. Otis? 25 you indicated was necessary? 25 MR.SCAGLIONE: I'm not,but I'll check. This Page 107 Page 109 1 A. I don't believe so. 1 is Greg. 2 Q. Is there any reason you didn't include that 2 MR.in den BOSCH: I have what you have,Ted. 3 reference in this document? 3 This is Bernard. 4 A. It may be included on the pro forma that was 4 Q. BY MR.BOECKER: There as Exhibit H to 5 attached. 5 Exhibit 114,leasing commissions. 6 Q. You understood that there was a pro forma 6 Do you see that? 7 attached to the limited partnership agreement? 7 A. Uh-huh. 8 A. It may be an exhibit to one or more documents, 8 Q. What is that exhibit supposed to relate to? 9 or was discussed. I'm not sure if it was specifically 9 A. Okay. This is what you were asking about 10 an exhibit. They sometimes are and sometimes aren't. 10 previously. Leasing commissions that are to be paid in 11 Q. There is a document labeled Exhibit D-2, 11 connection with the lease-up of the property. 12 "Development Services of Class B Limited Services." Do 12 Q. So those go to Woltemath-Otis as opposed to 13 you see that? 13 Kimco? 14 A. Yes. 14 A. They don't go to Kimco,and they have to be 15 Q. And it references as part of a development fee 15 shared with outside brokers. 16 to be paid to the Class B limited partner. "A Class B 16 Q. So those are the additional fees that 17 limited partner shall perform the following services," 17 Woltemath-Otis will get,correct? 18 and it lists various items? 18 A. Correct. 19 A. Yes. 19 Q. Have you had any discussions with Eric Wagner? 20 Q. is that referencing a fee to be paid to 20 A. I'm not sure who that is. If you identify him 21 Woltemath-Otis? 21 a little bit more,I would-- 22 A. Yes. 22 Q. Do you have any understanding of whether or 23 Q. And there is an Exhibit D-1,"Development 23 not Eric Wagner of Pacific Realty Group is a broker that 24 Services of General Partner." Do you see that? 24 Woltemath-Otis had worked with in connection with the 25 A. Yes. 25 acquisition of this.property? • 28 (Pages 106 to 109' 171 rnnnn ncnnnTTnlr` CID\/TrC _ (ti1Q) IZQ1 _QIZfl'2 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 110 Page 112 l A. No. I don't recognize that name. 1 take a moment to review 82 and the attachments thereto. 2 Q. I'm going to show you what was previously 2 A. Okay. 3 marked as Deposition Exhibit 55 and ask you whether or 3 Q. That document has attached to it another 4 not you've ever seen that document before. 4 source and use of funds document,correct? 5 A. Yeah,I've seen it. It's the purchase 5 A. Yes. 6 agreement between Woltemath-Otis and Eaton. 6 Q. And it sets out the expenses in a little bit 7 Q. And is it your understanding that that is the 7 more detail? 8 real estate purchase agreement under which KDI is going 8 A. Yes. 9 to acquire the subject parcel or plans to acquire the 9 Q. Is that the budget document that you had seen 10 subject parcel? 10 previously,or is that still something different than 11 A. Correct. 11 the budget document that you had seen previously? 12 Q. I'm going to direct your attention to--did 12 A. I'm not sure if I've seen these numbers in II 13 you have an opportunity to review that document prior to 13 this specific format before. 14 entering into the limited partnership agreement with 14 Q. So when you referenced earlier the fact that I 15 Woltemath-Otis? 15 there had been a budget and there had been something 16 A. Yeah,I read through it and sent it to our 16 created,it was something different than this document, 17 attorneys in New York,yes. 17 correct? 18 Q. Okay. I'm going to direct your attention to 18 A. That's correct. 19 Paragraph 8-B on Page 8. 19 Q. I'm going to show you what has been marked as I 20 Do you see where that provision indicates that 20 Exhibit 83,a document labeled"Assignment and 21 "Any governmental action shall be conditioned upon the 21 Assumption Agreement,"dated November 20th,2003;do you 22 occurrence of the closing"? 22 see that document? 23 A. That's correct. I see that. 23 A. Uh-huh. 24 Q. Now,you're aware that governmental action has 24 Q. Is that a yes? 25 already been approved on February 24th,2004,by the 25 A. Yes. Page 111 Page 113 1 Omaha City Council,correct? 1 Q. And signed by KDI Omaha,L.P.? 2 MR.SCAGLIONE: Objection;form and 2 A. Yes. 3 foundation. 3 Q. And Woltemath-Otis Development? 4 A. BY THE WITNESS: Correct. 4 A. Right. 5 Q. BY MR.BOECKER: And,in fact,Exhibit 111 5 Q. Is it your understanding that that is the 6 specifically references the fact that,quote,"On 6 document where under the purchase agreement we've 7 February 24th,2004,the City Council of the City of 7 identified as Deposition Exhibit 55 was assigned to KDI 8 Omaha approved the Sorenson Parkway Plaza Redevelopment 8 Omaha,L.P.? . 9 Plan,which provided for the development of a commercial 9 A. It appears to be,yes. 10 shopping center along the west side of 72nd Street 10 Q. So that's the first date that KDI Omaha,L.P., 11 between Crown Point and Sorenson Parkway and the use of 11 would have obtained an interest in this particular real 12 excess ad valorem taxes generated by such development"? 12 estate purchase agreement,correct? 13 A. Correct. 13 A. That's the date on the documents,yes. 14 Q. Are you aware of any condition upon the action 14 Q. I'm going to show you what has been marked as 15 of the Omaha City Council to condition it upon the 15 Deposition Exhibit 87, "Administrative Order on Consent 16 occurrence of your closing with the Eaton? 16 for Corrective Action in the Matter of Vickers 17 A. I'm not aware of that,no. 17 Incorporated,6600 North 72nd Street Omaha,Nebraska 18 Q. Okay. And as of today's date,you have not 18 68122." 19 closed with Eaton on this purchase agreement,correct? 19 Had you ever seen that document previously? 20 A. That's correct. 20 A. No. 21 Q. But notwithstanding that fact,governmental 21 Q. I'm going to show you what has been marked as 22 action has already been taken? 22 Exhibit 113,a clip of documents that was produced by 23 A. So I'm led to believe,yes. 23 your counsel from the--relating to the bylaws and 24 Q. I'm going to show you Deposition Exhibit 82 24 organizational documents for KD Omaha 1103,Inc. I just 25 and certain attachments to that document and ask you to 25 want you to look at them and tell me if you've ever seen 29 (Pages 110 to 113. in, rnnnn nrnrlrv-rTnlr` Girl\/Tr''CC' /G')D\ CO1 OCf)'D 1 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 114 Page 116 1 those before. 1 Woltemath-Otis and KD Omaha 1103,Inc.,would evenly 2 A. No. I can tell you right now I haven't. 2 split or split on some basis the costs incurred, 3 Q. Do you know if there have been any formal 3 correct? 4 meetings of the board of directors of KD Omaha 1103, 4 A. Yes. 5 Inc.? 5 Q. Have you ever had a project that you've been 6 A. Not that I'm aware of. 6 involved in previously where you spent sums on the 7 Q. Are you a shareholder in KD Omaha 1103,Inc.? 7 development process,but elected for some reason or 8 A. No. 8 another to walk away? 9 Q. Do you know who owns the shares of KD Omaha 9 A. We have. We don't like it. 10 1103,Inc.? 10 Q. But it occurs from time to time,correct? 11 A. No. 11 A. Yes. 12 Q. When did you first become aware of the action 12 Q. Has there been any discussion of the 13 brought by Benson Park Plaza to attempt to prevent 13 potentiality of acquiring the property if you don't meet 14 rezoning of the property? 14 the co-tenancy issues and selling it as an industrial 15 A. I got a call three,four weeks ago,whenever 15 site or some other potential user? 16 it was,a day or two days after it was instituted. 16 A. No,no such discussions. 17 Q. Prior to being informed of that action,had 17 Q. And Kimco would have no interest in such an 18 you had any plans to close on this transaction in March 18 arrangement? 19 or April of 2004? 19 A. No such interests,no. We're not in the land 20 A. We had plans to abide by the contract, 20 business. 21 whatever the closing date or any extensions that could 21 Q. You would agree that that might be one 22 be negotiated. 22 alternative to attempt to reduce your loss,though, 23 Q. You're aware that there are extensions up to 23 correct;you could purchase it and try to recoup your 24 July 15th,2004,correct? 24 costs through the sale to a third party? 25 A. Correct. 25 A. I don't think that is viable. I think you Page 115 Page 117 1 Q. But you weren't going to close in March or 1 would be just increasing your risk. 2 April until you had the co-tenancy issues addressed, 2 Q. Have you sought to have any appraisals 3 correct? 3 undertaken of the property? 4 A. Correct. 4 A. I haven't. 5 Q. Those still aren't addressed as of today's 5 Q. Are you aware of any appraisals that have been 6 date,correct? 6 undertaken? 7 A. That's right. 7 A. No. 8 Q. If for hypothetical purposes,KDI Omaha elects 8 Q. Is that something that you would plan to do 9 not to proceed with closing on the real estate purchase 9 prior to a closing? 10 agreement with Eaton Corporation,is it your 10 A. No. 11 understanding that KDI Omaha will seek reimbursement of 11 Q. Have you had discussions with the 12 any prior expenditures from Woltemath-Otis? 12 environmental engineers or any individuals regarding the 13 A. No. 13 nature of the contamination present at the site? 14 Q. Is it your understanding that each party will 14 A. I've seen some summaries,but I'm not 15 bear their respective costs incurred up to that date on 15 intimately aware of what all the implications are. 16 an equal basis? 16 Q. Are you aware of any evidence that suggests 17 A. Well,will bear it in accordance with the 17 that there is a pending threat to human health presented 18 agreement. 18 by the site? 19 Q. Okay. But you wouldn't--I'm trying to 19 A. Would you repeat that? 20 figure out who the real party in interest is that would 20 Q. Are you aware of any evidence which indicates 21 suffer any damages. 21 that there is some potentially unacceptable exposure or 22 MR.SCAGLIONE: Object to the form and 22 risk to human health presented by the contaminants at 23 foundation. 23 the site? 24 MR. in den BOSCH: Join. 24 MR.in den BOSCH: Object to the form and 25 Q. BY MR.BOECKER: You understand that 25 foundation. This is Bernard. 30 (Pages 114 to 117. in rnnnn nrnn,nTTnlf' (rrrn\/Tr'E C` /L'77\ cOi OETV) 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 118 Page 120 1 A. BY THE WITNESS: I have no understanding of 1 A. No. lie's in Beverly Hills. 2 what the circumstances are,based upon the nature of the 2 Q. Are you the senior ranking person in the 3 chemicals. 3 Lisle,Illinois,office? 4 Q. BY MR.BOECKER: Have you ever given a 4 A. No. There is an executive VP. His name is 5 deposition previously? 5 Daniel Slattery,S-I-a-t-t-e-r-y. 6 A. Yes,I have. 6 Q. Has Mr.Slattery had any involvement in this 7 Q. How many occasions? 7 project? 8 A. Oh,maybe four or five. 8 A. No. 9 Q. And in what context? 9 Q. Have you engaged in any discussions with 10 A. As a witness in a couple of matters,and also 10 Mr.Friedman regarding this project? 11 in connection with the dissolution of my first marriage. 11 A. Yes. 12 Q. And in connection with any--have you ever 12 Q. Tell me about those. 13 had your deposition taken in connection with any real 13 A. Well,in general,Kimco has a lot of projects 14 estate development activities? 14 in the pipeline. Mr.Friedman is responsible for the . 15 A. I don't specifically recall. It's possible. 15 overall operation of Kimco Developers,Inc. 16 I don't recall. 16 And both Mr.Slattery and myself and 17 Q. Never had your deposition taken while 17 Mr.Friedman are very concerned about the amount of 18 associated with Kimco? 18 funds that are expended for a project in predevelopment, 19 A. No. 19 so we're very stingy with the payment of funds. 20 Q. Are you currently licensed as an attorney by 20 So we have ongoing discussions with respect to 21 any state? 21 whether or not certain funds should be expended for all 22 A. No. 22 of our projects that are in the pipeline,and we have 23 Q. Do you hold any broker or real estate 23 had those kinds of discussions with respect to this 24 licenses? 24 project,as well as the leasing or,you know,what the 25 A. No. 25 status of the approvals are,those sorts of things. I. Page 119 Page 121 1 Q. Have you ever held any broker or real estate 1 Q. Have you reported to Mr.Friedman that you've 2 licenses? 2 been advised that leasing of space within this project 3 A. Yes. 3 will be tough? 4 Q. And in what states? 4 A. He's aware of it. 5 A. Minnesota. 5 Q. Has there been any discussion of potentially 6 Q. When did you allow it to lapse? 6 backing away from this deal because of costs? 7 A. Fifteen years ago. 7 A. Well,we haven't discussed backing away from 8 Q. Ever been licensed as an appraiser in any 8 the projects,but we have taken advantage of the 9 state? 9 contract and the term and the extensions to make sure 10 A. No. 10 that the funds that are expended are parceled out 11 Q. Is your compensation at all affected by 11 prudently. 12 whether or not this development proceeds further? 12 So,you know,we sort of take that as,you 13 A. Not specifically. 13 know,you take baby steps and then you walk and then you 14 Q. I assume that there may be bonuses or 14 run. So we have--we started with baby steps,and we 15 something of that nature if the project proceeds forward 15 started walking. That's where we are at now. We're not 16 and is successful? 16 running. 17 A. Yes. 17 Q. Have you had any discussions with Mr.Friedman 18 Q. But nothing specifically set forth? 18 regarding any requisite or necessary amount of TIF 19 A. No. Purely at the discretion of my employer. 19 financing for the project? 20 Q. And who is it that you would immediately 20 A. Oh,yes. 21 report to? 21 Q. Was Mr.Friedman consulted about the reference 22 A. Gerald Friedman,F-r-i-e-d-m-a-n. 22 in the limited partnership agreement to the$3 million 23 Q. And what entity is Mr.Friedman employed by? 23. figure? 24 A. He's president of Kimco Developers,Inc. 24 A. Well,he was aware of the initial number when 25 Q. And is he in the Lisle,Illinois, office? 25 it was presented to the executive committee before all 31 (Pages 118 to 121' VI CMAA DCD(IDTTI\Ic` CCD\/TrrC _ /t;7'21 EQ1 _QC(1-2 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 122 Page 124 1 the information was available to us. 1 project feasible? 2 Q. Do you have a recollection as to how much 2 A. The amount that was approved. 3 earlier than the limited partnership agreement was 3 Q. The S8,490,000 figure? 4 executed on November 20th,2003,that this meeting with 4 A. I believe that's the amount. 5 the executive committee was held? 5 Q. What,in your opinion,makes a project 6 A. Probably at the end of June or the beginning 6 feasible or not feasible? 7 of July. 7 A. Well,if the project--it involves the 8 Q. Did you ever go back to the executive 8 circumstances surrounding the project. At the end of 9 committee and say,"Hey,there's been a change in the 9 the day,the developer has a profit that justifies the 10 cost that we were initially given or projected"? 10 risks associated with the development. 11 A. .It has been done. It was not done in this 11 In this particular case,there is a lot of 12 particular instance. 12 circumstances that are on and off the site that need to 13 Q. Have you gone back to the executive committee 13 be remediated and corrected in order to make the project 14 and informed them that the project is having difficulty 14 feasible. 15 leasing? 15 Q. And in any of your discussions or analysis, 16 A. No. They're not concerned with that. That's 16 have you tried to put any figure on potential profit? 17 our problem. They give us the leeway to go forward or 17 A. Again,it's kind of a moving target. So,I 18 not go forward based upon the leasing and any number of 18 mean,other than at the end of the day,you know, 19 parameters. 19 somewhere in the 11 percent range. 20 Q. Have you advised Mr.Friedman of the pendency 20 Q. What is--on a project like this what does 21 of the suit brought by Benson Park Plaza? 21 11 percent translate into in terms of dollars? 22 A. He's aware of it,yes. 22 A. I can't figure that out in my head. 23 Q. Are you aware that there were different 23 Q. Well,is it your testimony that during the 24 components to the action taken by the city council on 24 course of your discussions with Mr.Friedman or 25 February 24th,2004? 25 Woltemath-Otis or presentations to the executive Page 123 Page 125 1 A. I'm not sure exactly what you mean. 1 committee,you've never formulated an estimate as to the 2 Q. Were you aware that there were separate 2 potential dollar amount of profit that might be 3 resolutions that addressed designation as blight and 3 attained? 4 substandard,approval of a preliminary plat,rezoning of 4 A. Yes,we have. I don't have the pro forma in 5 the property and approval of a development agreement for 5 front of me to show what that number is. 6 the tax increment financing? 6 Q. Okay. But surely you have an estimate? Are 7 MR.in den BOSCH: Object to foundation. This 7 we talking 5 million,20 million, 100 million, 8 is Bernard. 8 200 million? 9 A. BY THE WITNESS: I was advised that we have 9 A. No. It's not anywhere near those numbers. I 10 positive results from the hearings on the project during 10 really do not recall what the bottom line is. In any 11 the meeting in February. 11 event,it's based upon the sale of the property at some 12 Q. BY MR.BOECKER: Have you had an opportunity 12 point in the future. I don't know what the cap rates 13 to review the verified complaint to intervention filed 13 are in the future,which is right now the cap rates are 14 on behalf of KDI Omaha,L.P.,and KD Omaha 1103,Inc.? 14 in single digits. You know,8 percent or below,8 and a 15 A. Can't say that I have,no,sir. 15 half. If the cap rates go up over the next 36 months, 16 Q. Do you have any opinion or reason to believe 16 potentially the partnership could lose a substantial 17 that KDI Omaha,L.P.,would not proceed to close on the 17 amount of money. 18 real estate purchase agreement if Benson Park Plaza was 18 Q. If the cap rates go down,the partnership 19 successful in enjoining an award of tax increment 19 could make a substantial amount of money,correct? 20 financing for the project? 20 A. Yeah,if the cap rates go down. I think the 21 A. Yeah. I would say that we wouldn't close on 21 cap rates,based on the market conditions,are pretty 22 it because the project would not be economically 22 much where they're going to be. i think the forecast 23 feasible. 23 for the future is that they're going to be going up. 24 Q. Do you have an opinion as to the minimum 24 Q. Upon what do you base that statement? 25 amount of tax increment financing necessary to make the 25 A. Just on the economy in general and what we're 32 (Pages 122 to 125 ,,, rnnne nrnnnTTnlr^ r`r-n% /Tr`r-r` /G7'3\ roi orn7 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 126 Page 128 1 seeing on some fluctuation in the cap rates on some l A. Well,the budget that was attached to the 2 projects that are currently in the pipeline. 2 partnership agreement--not attached—that was 3 Q. When you've done large scale projects similar 3 prepared at the time the partnership agreement was 4 to this,what would have been typical returns in terms 4 executed. 5 of dollar amounts? 5 Q. Has that been revised further since execution 6 A. Depending on the size of the project,you 6 of the partnership agreement? 7 could make$10 million. You could make$2 million. 7 A. I don't believe so. 8 Q. What is the--in your tenure with Kimco,what 8 MR.BOECKER: All right. For the record, 9 is the largest amount of profit you've seen? 9 Greg,I've never seen the budget. Have you been able to 10 A. Somewhere in the$10 million range. That was 10 identify whether or not you've produced it? 11 for a million square foot project in San Antonio,Texas, 11 MR.SCAGLIONE: 1 think we have. 12 that took five years to develop. 12 MR.BOECKER: At what time? 13 Q. So when you made your presentation to the 13 MR.SCAGLIONE: I don't know. 14 executive committee,I take it you were forecasting that 14 MR.BOECKER: Because I've gone through the 15 there is a potential profit in the millions of dollars 15 documents for Mr.Otis's deposition,which appear to be 16 on this project,correct? 16 budget,and they are labeled sources and uses of funds. 17 A. Yes,based upon the investment. 17 And the witness has testified those aren't the 18 Q. At the time you made your projection or 18 budgets he's referring to. And I have the e-mails that 19 presentation to the executive committee,you had in your 19 were sent to my office yesterday,and I don't see with 20 mind that you were going to seek in the neighborhood of 20 any of that material a budget document. 21 $3 million in TIF,correct? 21 MR.SCAGLIONE: We will try and locate it for 22 MR. SCAGLIONE: Objection;form and 22 you if it still exists. 23 foundation. 23 Q. BY MR.BOECKER: Mr.Brody,was the budget 24 Q. BY MR.BOECKER: Is that correct,sir? 24 prepared at your offices at Lisle,Illinois? 25 MR.SCAGLIONE: Same objection. 25 A. Yeah,I think so. Page 127 Page 129 l You may answer,Mr.Brody. 1 Q. And do you maintain a file at the Lisle, 2 A. BY THE WITNESS: Thank you. Yeah,there was 2 Illinois,office? 3 some discussion about,you know,what was the like— 3 A. I have a file,yeah. 4 what were the parameters,perhaps,and a$3 million 4 Q. Is it--are there project files kept? For 5 number was discussed. That's why that was the minimum 5 example,is there a file kept for this particular 6 that was approved. 6 project? 7 Q. BY MR.BOECKER: With whom did you have these 7 A. There is. 8 discussions that was within the parameters? 8 Q. And what sort of material would be contained 9 A. That was the executive committee. 9 within that? 10 Q. So that was the feeling of what might be 10 A. Same type of material that's floating around 11 obtained on the project? 11 here today,the exhibits. 12 A. No. It was anticipated that more was going to 12 Q. The partnership agreements,correspondence, 13 be attained,but based upon the costs that we had at the 13 budgets,things of that nature? 14 time,there had been no application made at the time or 14 A. Correct. 15 anything else. So that was a discussion that was had at 15 Q. I'm going to ask that you preserve and 16 that time. 16 maintain all of that data,because I don't want it lost 17 Q. Can you tell me that the costs have gone up in 17 or discarded. I'm going to be making a request for it, 18 excess of$5 million since your presentation to the 18 and your attorney may object to some of it,but I don't 19 executive committee? 19 want anything discarded in the interim. 20 A. Combination of the costs going up and the 20 is that agreeable? 21 rents coming down,yes. 21 A. Yes. 22 Q. Have you attempted to calculate that in any 22 Q. And I would further ask that no deletions be 23 manner or form? 23 made to any computer programs or softwares that you may 24 A. Just in the budget. 24 have. 25 Q. So there were revised budgets? 25 Do you have one central file,or does everyone . 33 (Pages 126 to 129 in r_nnnn nrnnnTTnir` CCD\ITrt=C _ (g1-2l IZQ1 _Ql fl2 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 130 Page 132 1 have their own file? Does Mr.Lally have a file that he l being an indication that there might be any market 2 keeps? 2 support in the area or anything along those lines? 3 A. Yes,he does. 3 A. I'm not sure what you mean when you say 4 Q. I'm going to be asking for his file,as well. 4 "market support." 5 Have you had any discussions with Mr.Jobeun 5 Q. Well,I mean that it demonstrated that your 6 regarding his work on behalf of the developers of the 6 potential venture could be potentially viable. 7 Benson Park Plaza? 7 A. 1 don't specifically recall them referencing 8 A. No. 8 it in that way,no. 9 Q. During the course of your meetings with 9 Q. How did they reference it? 10 Mr.Jobeun,did he at all relate his experiences 10 A. Just that there is a Home Depot project south 11 relative to the Benson Park Plaza project? 11 by Military next to a grocery store. And I think they 12 A. Which project is that? 12 indicated that Benson Park Plaza was trying to solicit 13 Q. Are you aware that there is a project located 13 Target for their site,but that Target didn't want to be 14 generally at 72nd Street and Military? 14 there. 15 A. Is that the Home Depot? 15 Q. And when did that conversation occur? 16 Q. Yes. 16 A. I think early on,you know,right after I met 17 A. Yes. is that Benson Park? 17 with them in May. 18 Q. Yes. 18 Q. Okay. Did they indicate to you their 19 A. Yes,I'm aware of that project. 19 understanding of why Target didn't want to go into that 20 Q. And did Mr.Jobeun advise you that he had 20 site? 21 worked on that project,as well? 21 A. No. I mean,Target confirmed it because they 22 A. I seem to recall that he did reference it,but 22 signed the LOI with Woltemath-Otis and not with Benson 23 that he wasn't doing work on that and hasn't done any 23 Park. 24 work for some time. 24 Q. Were you aware of any negotiations between 25 Q. Did he indicate to you that he had sought tax 25 Benson Park and Target? Page 131 Page 133 1 increment financing for that project? 1 A. I wasn't aware of any negotiations,no. I'm 2 A. I believe there is tax increment financing for 2 sure if there was available land,they were trying to 3 that project. I don't know if Mr.Jobeun specifically 3 solicit Target,though. 4 said that he went and got it for that project. 4 Q. You don't have any personal knowledge of that 5 Q. Did Mr.Jobeun relate to you any of his 5 one way or the other? 6 efforts or experiences relative to seeking tax increment 6 A. No. 7 financing on that project? 7 MR.BOECKER: I'm going to adjourn my 8 A. No. He didn't talk about that client or that 8 questions at this time. I'm going to seek to move to 9 project,other than to say that he had represented. 9 compel on the stuff that's withheld. 10 Q. Now,knowing that Benson Park Plaza project is 10 Additionally,I note there are documents that 11 where the Home Depot and related stores are at,is that 11 we believe should be produced that would lead to further 12 a site that you believe would present a potential 12 questions. 13 competition to your site? 13 In addition,I'll note that the witness was 14 A. Yeah,I think it's a competing site,assuming 14 not prepared to respond to several 30(b)(6)deposition 15 it's not leased or still has available property there. 15 topics. Obviously,I reserve the right to compel the l 6 Q. Did you have any understanding as to the 16 production of a witness knowledgeable to respond on 17 configuration of the streets in the vicinity of the Home 17 those topics. 18 Depot prior to its construction? Had you been in that 18 MR.SCAGLIONE: This is Greg Scaglione. 19 area of Omaha before this time? 19 In response to that,KDI,as well as Kimco, 20 A. No. 20 sought to designate Jim Otis as their representative 21 Q. And when you went to visit the Vickers site, 21 because he has the most knowledge. 22 was that project already up and constructed? 22 Counsel objected,claimed that that was bad 23 A. Yes. 23 faith,so we got the project manager to be deposed 24 Q. Do you have any recollection of whether or not 24 instead. 25 Mr.Woltemath or Mr. Otis referenced that project as 25 So this deposition was taken by Counsel of the 34 (Pages 130 to 133 ,ii rnnnn nrneNnTTnir` r'rno,,Tr'rr fc-rp\ COi Or'!17 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 134 Page 136 1 selected person they wanted,not our initial designee. 1 contractors and comparables that you were aware of none; 2 As to the documents,there are numerous 2 is that correct? 3 e-mails to Mr.Boecker stating that there are objections 3 A. Correct. 4 and limits to the document request,and the documents we 4 Q. And with regard to the joint venture document, 5 were able to collect that are responsive and 5 are you aware that that document has already been 6 nonprivileged were produced. 6 produced? 7 Mr.Brody,I have several questions for you. 7 A. Yes. 8 MR.BOECKER: For the record,I dispute all 8 Q. Are you aware of the existence of any document 9 statements of Counsel,but we'll take that up to the 9 regarding the assumed future value of the Vickers site? j 10 Court. 10 A. You mean as it currently sits or as a 11 MR.SCAGLIONE: I dispute what Counsel 11 redeveloped project? 12 represented,to the extent we need to make argument now. 12 Q. As a redeveloped project,in terms of a fair 13 THE COURT REPORTER: Who is this? 13 market value. 14 MR.SCAGLIONE: This has been and will be 14 A. Well,there's--you know,in the pro forma 15 Greg. 15 there would be an assumption of a cap rate upon sale, 16 16 and that would—and based upon income and expenses, 17 EXAMINATION 17 and that would be the only indication of any value. 18 BY MR.SCAGLIONE: 18 Q. And is that the document that you believe 19 Q. Mr.Brody,with regard to Mr.Otis,has he 19 might be in Illinois? 20 been the person primarily responsible for the day-to-day 20 A. Yes. 21 transactions regarding the site at what has been called 21 Q. When will you be able to check to see if that 22 the former Vicicers property? 22 document still exists? 23 A. Yes,sir. 23 A. Well,I won't be back in Illinois until the 24 Q. Would he be the one most knowledgeable as to 24 12th of April,but I could make a call. 25 budgeting and expense,contact with engineers,contact 25 Q. Do you have Exhibit 114 before you,Mr.Brody? Page 135 Page 137 1 with Eaton and contact with the City? 1 A. No. 2 A. Yes,sir. 2 Q. I believe I might be misstating the number, 3 Q. And he would have knowledge superior to any 3 but it's the limited partnership agreement. 4 other representative of KDI or Kimco on those particular 4 A. I do now,yes. 5 subjects;is that correct? 5 Q. If you'll turn to Page 2 of Exhibit 114-- 6 MR.BOECKER: Objection;form and foundation; 6 A. Yes,sir. 7 leading and suggestive. 7 Q. --do you see that Article 1 is entitled,"The 8 MR.SCAGLIONE: Cross-examination,Your Honor. 8 Defined Terms"? 9 Q. BY MR.SCAGLIONE: Is that correct? 9 A. Yes. 10 A. Yes. 10 Q. And Mr.Brody,are you generally familiar that 11 Q. With regard to the document production,are 11 in more complicated and lengthy documents that 12 you aware that we have advised Mr.Boecker that 12 agreements sometimes will define a term and then carry 13 documents responsive were produced by Jim Otis in 13 forward that initial letter capitalized term throughout 14 addition to what was provided to Mr.Boecker yesterday? 14 the agreement,and it refers back to this section for 15 MR.BOECKER: Objection;form and foundation; 15 its definition and meaning? 16 leading and suggestive of the answer and I assume 16 MR.BOECKER: Objection;form and foundation; 17 constitutes a waiver of any attorney-client privilege. 17 leading and suggestive of the answer. 18 MR.SCAGLIONE: Wrong assumption,and it's 18 MR.SCAGLIONE: Cross-examination,Your Honor. 19 cross-examination,Your Honor. 19 A. BY THE WITNESS: Yes. 20 Q. BY MR.SCAGLIONE: Is that a true statement, 20 Q. BY MR.SCAGLIONE: And if you will turn to 21 Mr.Brody? 21 Page 10-- . 22 A. Yes,to the best of my information and . 22 A. Okay. 23 recollection,yes. 23 Q. --do you see Section 1.54 defines the term 24 Q. You did testify with regard to the topics-- 24 "Subsequent Funding Conditions"? 25 I'm sorry--with regard to the documents related to • 25 A. Yes. 35 (Pages 134 to 137 vi cnnnn n!nnD'TrnM1 CID\ITCGC _ (g')'2l CP1 _PC(1'2 , i 1 • 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 138 Page 140 1 Q. You notice that"conditions" is plural? 1 MR. SCAGLIONE: It's cross-examination,Your 2 A. Yes. 2 Honor. 3 Q. And on Page 11,between Subparagraphs G and H, 3 A. BY THE WITNESS: The answer is yes,and again, 4 do you see that the word"and"is used? 4 takes into account the likelihood that the numbers are 5 A. Yes. 5 going to change over the course of the predevelopment. 6 Q. Do you understand that to mean that Items A 6 MR.BOECKER: Move to strike as nonresponsive . l 7 through H are in the conjunctive as opposed to the 7 to the question posed. 8 disconjunctive? 8 Q. BY MR.SCAGLIONE: If you previously 9 MR.BOECKER: Objection;form and foundation; 9 testified,Mr.Brody,if TIF financing was approved for 10 leading and suggestive of the answer. 10 only$3 million,and you testified that if that 11 A. BY THE WITNESS: Absolutely. 11 threshold of$3 million was met,that the general 12 Q. BY MR.SCAGLIONE: Do you see that Mr.Boecker 12 partner would be required to close. 13 referred you to the condition listed as 1.4--I'm 13 Having now read H,do you still agree with 14 sorry-- 1.54-G on the minimum TIF needed for the 14 that proposition? 15 project? 15 MR.BOECKER: Objection to the form of the 16 A. Correct. 16 question;misstates the prior witness's response; 17 Q. If you'll look at H and read that to yourself 17 leading and suggestive of the answer;no proper and 18 and let me know when you're done. 18 sufficient foundation,and improper attempt at 19 A. Yes. 19 impeachment. 20 Q. Is there also a condition that the general 20 MR. SCAGLIONE: Cross-examination,and he 21 partner must be reasonably satisfied of the viability 21 opened the door,Your Honor. 22 and profitability of the project? 22 A. BY THE WITNESS: No,not unless the project— 23 A. Correct. 23 we were reasonably satisfied that it was viable and 24 Q. And is that a subsequent funding condition of 24 profitable. 25 closing? 25 Q. BY MR.SCAGLIONE: So,for example,if TIF Page 139 • Page 141 1 MR.BOECKER: Objection;form and foundation; 1 financing was approved for 3.5 million,would you agree 2 leading and suggestive. The document speaks for itself. 2 that the general partner could still choose not to 3 Q. BY MR.SCAGLIONE: Is that correct? 3 close? 4 A. Yes,it is. 4 MR.BOECKER: Objection;form and foundation; • 5 Q. So even if the TIF financing came in at 5 leading and suggestive of the answer. 6 $8 million as Mr.Boecker stated,is it true in 6 A. BY THE WITNESS: Yes. 7 accordance once with Section 5.--I'm sorry-- 7 Q. BY MR.SCAGLIONE: Mr.Brody,are you 8 Section 1.54-H that the general partner still has the 8 generally aware that Mr.Otis applied to the City of 9 right to determine viability and profitability? 9 Omaha for various resolutions,ordinances,rezoning, 10 MR.BOECKER: Objection;form and foundation; 10 replatting and TIF financing? 11 calls for speculation;legal conclusion. Document 11 A. Yes. 12 speaks for itself,and the question is leading and 12 Q. And his efforts in that regard,did you 13 suggestive of the answer. 13 believe they were consistent with the provisions of 14 MR. SCAGLIONE: Cross-examination,Your Honor, 14 8.--I'm sorry--Paragraph 8-A and B of the real 15 and you opened the door. 15 estate purchase agreement wherein it provides that Eaton 16 A. BY THE WITNESS: Yes,that's absolutely true. 16 would cooperate with the purchaser's efforts to obtain 17 Q. BY MR.SCAGLIONE: So for any reason--an 17 those types of relief? 18 economic,financial,tax increment financing,tenant 18 MR.BOECKER: Objection to the form of the 19 threshold or occupancy expectation or otherwise--for 19 question as it misstates the underlying document; 20 any of those reasons,the general partner could elect 20 leading and suggestive of the answer;no proper and 21 not to close if it determines the project is not viable 21 sufficient foundation for this witness;calling for a 22 or profitable,correct? 22 legal conclusion. 23 MR.BOECKER: Objection;form;compound; 23 A. BY THE WITNESS: Yes. 24 foundation;calls for a legal conclusion;speculation; 24 Q. BY MR.SCAGLIONE: And in that regard,as for 25 leading and suggestive of the answer. 25 all of the applications that Mr.Otis submitted on 1 36 (Pages 138 to 141. r/1 r_nnnn nrnrn-rTnir, CCn\/Tr`cc fiZ )\ Col _QErrz 1 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 142 Page 144 1 behalf of whatever company,does KDI Omaha,the limited l performance of a real estate purchase agreement? 2 partnership,and its general partner,KD Omaha 1103, 2 A. Yes. 3 inc.,ratify all of those? 3 Q. And are you generally aware that if a 4 MR.BOECKER: Objection;form and foundation; 4 purchaser feels that a prospective seller has breached a 5 leading and suggestive of the answer;compound. 5 real estate purchase agreement,that one of the remedies 6 A. BY THE WITNESS: Yes. 6 that may be available to that buyer is specific 7 Q. BY MR.SCAGLIONE: And is it the desire of KD 7 performance? 8 Omaha 1103 and KDI Omaha that the applications continue 8 MR.BOECKER: Objection;fom;leading and 9 their process to completion before the planning 9 suggestive. 10 department and the City of Omaha? 10 A. BY THE WITNESS: Yes. 11 A. Yes. 11 Q. BY MR. SCAGLIONE: And were you aware that 12 MR.BOECKER: Objection to the form and 12 Woltemath-Otis initially had a real estate purchase 13 foundation. And I ask my objection precede the answer. 13 agreement regarding the Vickers property? 14 Leading and suggestive. 14 MR.BOECKER: Foundation. 15 Q. BY MR.SCAGLIONE: Your answer was yes, 15 A. BY THE WITNESS: Yes. 16 Mr.Brody? 16 Q. BY MR. SCAGLIONE: And did you become aware 17 MR.BOECKER: Same objection. 17 that that real estate purchase agreement was assigned to 18 A. BY THE WITNESS: Yes,yes. 18 KDI Omaha? 19 Q. BY MR.SCAGLIONE: And to the extent that 19 A. Yes. 20 additional City action is needed with regard to any of 20 Q. Is it your understanding that by virtue of 21 those resolutions or ordinances,is it the desire of 21 that real estate purchase agreement,that KDI Omaha had 22 KD Omaha 1 103 and KDI Omaha for Mr.Otis to pursue such 22 some interest in the Vickers property for which it could 23 relief'? 23 seek specific performance if Eaton wrongfully refused to 24 MR.BOECKER: Objection;form and foundation; 24 close the real estate purchase agreement? 25 leading and suggestive. 25 MR.BOECKER: Objection;form;foundation; • Page 143 Page 145 I A. BY THE WITNESS: Yes,we want to him to pursue 1 leading and suggestive of the response;calling for a 2 it. 2 legal conclusion and speculation. 3 Q. BY MR.SCAGLIONE: And obtaining the TIF 3 A. BY THE WITNESS: Yes,sir. 4 financing,is that the--strike that. 4 Q. BY MR. SCAGLIONE: Are you aware that KDI 5 Attaining the pending resolutions and 5 Omaha could file a lis pendens or some other notice of 6 ordinances from the City of Omaha,is that the next step 6 record identifying its equitable interest in the real 7 that is needed to be accomplished in considering the 7 estate? 8 purchase of the real estate known as the Vickers site? 8 MR.BOECKER: Objection;form;leading and 9 MR.SCAGLIONE: Objection;foundation and form 9 suggestive;no proper and sufficient foundation to this 10 of the question as leading and suggestive of the answer. 10 person to opine on Nebraska law. 11 Also misstates the witness's prior testimony,and 11 MR. SCAGLIONE: You may answer,Mr. Brody. 12 improper attempt at impeachment. 12 MR. BOECKER: Could you read back the 13 A. BY THE WITNESS: The answer is yes. 13 question? 14 Q. BY MR.SCAGLIONE: And have most of the other 14 THE WITNESS: Could you read back the 15 activities regarding KDI's efforts to evaluate whether 15 question? 16 it desires to purchase the Vickers site--have most of 16 (Requested portion of record was read as 17 those efforts been postponed pending a ruling by the 17 follows: 18 judge in this case? 18 "QUESTION: Are you aware that KDI Omaha 19 MR.BOECKER: Objection;form;no proper or 19 could file a lis pendens or some other notice of 20 sufficient foundation;leading and suggestive of the 20 record identifying its equitable interest in the 21 response,and vague and ambiguous. 21 real estate?") 22 A. BY THE WITNESS: Yes,they have been postponed 22 Q. BY MR. SCAGLIONE: And did Mr.Jim Otis have 23 or delayed. 23 the authority at KDI Omaha and KD Omaha 1103 to bring 24 Q. BY MR.SCAGLIONE: Mr.Brody,as an attorney 24 this complaint and intervention? 25 are you familiar with the concept of specific 25 MR.BOECKER: Objection;foundation. i 37 (Pages 142 to 145. vi r-nnnn nr-rlr%rl -Tnir" r`r-r\ /Tr"rr^ /G'1'3\ r01 or-r y i 1 I 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 146 Page 148 l A. BY THE WITNESS: Absolutely. I A. I believe I received a copy of one. 2 MR.SCAGLIONE: I have nothing further. 2 Q. Okay. What did it say? 3 MR.in den BOSCH: I have no questions. 3 A. I don't recall,but-- 4 4 Q. Has anyone specifically informed you that 5 EXAMINATION 5 their review of any publication in the media about this 6 BY MR.BOECKER: 6 litigation has caused them to cease negotiation of a 7 Q. Mr.Brody,tell me specifically what efforts 7 lease? • 8 relative to the development of this project have been 8 A. I can't state specifically that anyone in j 9 delayed or postponed. 9 particular has said that,no. 10 A. Well,specifically the leasing efforts. 10 Q. When you referenced your,quote-unquote, 11 Obviously,any developer depends on local brokers to 11 leasing people,is that in reference to this Ms.-- 12 direct tenants to the project,and based upon the 12 A. Deb laboni. 13 publicity that's been generated by this project and the 13 Q. --Iaboni in Illinois? 14 knowledge that travels through the real estate community 14 A. Yes. 15 quite rapidly,there appears to be some delay in having 15 Q. Has she reported to you that tenants have 16 people make decisions until the matter is resolved. 16 indicated that they won't sign a lease because of this 17 Q. Tell me specifically upon what you base that 17 litigation? 18 opinion;who has told you any information that leads you 18 A. No. That's not what I said. There is no 19 to that conclusion? 19 reason to move forward with some of the process with the 20 A. Well,I inferred it from discussions with our 20 leasing until it's resolved,so,I mean,instead of 21 leasing people and with discussions with Mr.Otis. 21 moving forward,they may have just delayed their process 22 Q. Let me try to ferret out what you mean by 22 until this is resolved. 23 that. You inferred it. 23 It's not just in the media,but the brokers 24 What were their statements from which you 24 are aware of what is going on there. 25 inferred the proposition that you related? 25 Q. How do you know the brokers are aware of what Page 147 Page 149 1 MR.in den BOSCH: Object to form. This is 1 is going on? 2 Bernard. 2 A. Because I was told by Ms.Iaboni. 3 A. BY THE WITNESS: Well,specifically there are 3 Q. Tell me specifically the words she used to 4 some tenants that have delayed making the decision of 4 relate that to you. 5 whether to proceed or not until the matter is resolved. 5 A. I don't recall. 6 Q. BY MR.BOECKER: What tenants? 6 Q. Did she identify any brokers? 7 MR.SCAGLIONE: We're not going to identify 7 A. No. 8 that. 8 Q. Did she identify any tenants that had 9 A. BY THE WITNESS: We're not going to identify 9 suggested to her that this litigation has caused them to 10 that. 10 defer or postpone execution of a lease? 11 Q. BY MR.BOECKER: Assume that I don't believe 11 A. No. She merely indicated that there is the 12 it's true,then. 12 common knowledge of the litigation and that it's sort of 13 Have you specifically had discussions with 13 a wait-and-see attitude. 14 these tenants? 14 Q. Now,based upon your training and experience, 15 A. No. 15 you agree you could certainly execute a lease that would 16 Q. Have you seen any written documentation from 16 make it contingent upon the outcome of this litigation, 17 these tenants indicating that this lawsuit is somehow 17 correct? 18 preventing them from moving forward? 18 A. Absolutely. 19 A. No. They're not prevented,but there is a lot 19 Q. So legally,you're not aware that this 20 of effort that has to go into developing and going 20 litigation poses any interference with your ability to 21 through the leases and getting approvals internally. 21 sign up leases? 22 Q. Do you know what publicity this has generated 22 A. No. 23 in the media? 23 Q. And,in fact,you've attempted to have . 24 A. I know it has appeared in the newspapers. 24 Ms.laboni out there to continue to try and lease space? 25 Q. Have you read those articles? 25 A. Absolutely. I've encouraged her to continue. 38 (Pages 146 to 149' t/i r-TAPA r'r-r f\rrrTnir- c=miTr' C fC Y)\ col OEIVD 1 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 150 Page 152 1 Q. In fact,you've encouraged Haley&Aldrich to 1 A. Potentially,yes. 2 work with the EPA to work out the issues-- 2 Q. If Mr.Otis has overestimated the costs of 3 A. Yes. .3 construction,your profit could be much greater than 4 Q. --notwithstanding this litigation,correct? 4 your anticipated 11 percent,correct? 5 A. Absolutely. 5 A. Well,if there were errors or omissions,yes, 6 Q. As a trained attorney,have you ever heard of 6 there could be some adjustments up or down. 7 the concept that a specific provision takes precedence 7 MR.BOECKER: That's the extent of my 8 over a general provision? 8 questions at this time. Again,reserving my right to 9 A. Probably,yes. 9 seek to compel further answers. 10 Q. And the only specific provision in your 10 MR.SCAGLIONE: Mr.Brody will read and sign 11 limited partnership agreement that relates to tax 11 the deposition. This is Greg,and I do not need a copy 12 increment financing is Subparagraph G,correct? 12 of the deposition,and I do not need a copy of the 13 A. Yes. 13 exhibits. 14 Q. Your question--your attorney led you through 14 Mr.Brody,if you would let the court reporter 15 a bunch of questions which suggested Mr. Otis would be 15 know where she can mail you the transcript,and then 16 in a better position to answer questions regarding 16 you'll have an opportunity to read it and review it for 17 budgets. 17 errors,note any corrections and then sign and date. 18 Isn't it a fact that Mr.Lally participated, 18 THE COURT REPORTER: Excuse me. We don't send 19 from your office,in the preparation of budgets? 19 a copy to the witness. They either come to our office 20 A. Yes,he did. 20 or counsel will take care of that after they purchase a 21 Q. And in particular related to the calculation 21 copy,but we don't send out copies. 22 of the 11 percent yield? 22 MR.SCAGLIONE: That's fine. We would ask 23 A. Yeah,but he would have gotten his information 23 Mr.Boecker to forward the copy to whatever address 24 from Otis. 24 Mr.Brody gives him so he can read and sign it. 25 Q. He would have gotten his underlying 25 MR.in den BOSCH: This is Mr.in den Bosch. Page 151 Page 153 I information from Mr.Otis,but he would have done the 1 I would like a copy. Condensed would be nice. 2 calculation of the yield,right? 2 MR.BOECKER: I would appreciate a condensed 3 A. Well,the program does it itself. 3 and an ASCII. 4 Q. That program is at your office,right? 4 MR.in den BOSCH: No exhibits for me. 5 A. Correct. 5 MR.BOECKER: I'd like the exhibits,please. 6 Q. Okay. So in terms of that aspect of the 6 (1:17 p.m.) 7 budget,Mr.Otis wouldn't be able to testify? 7 8 MR.SCAGLIONE: Objection;form and 8 9 foundation. This is Greg. 9 10 A. BY THE WITNESS: I don't know if he would be 10 11 able to testify. He's gone through it with us and I 11 12 assume understands it. 12 13 Q. BY MR.BOECKER: Mr.Lally would be in a 13 14 better position to explain how it was calculated in your 14 15 office,correct? 15 • 16 A. I'm not sure he would be in a better position. 16 17 He didn't have the exact--he didn't know what the 17 • 18 backup of what the numbers were. As far as putting them 18 19 on the form,I suppose,yes,because Mr.Lally put them 19 20 on the form. 20 21 Q. So if Mr.Otis's underlying documents aren't 21 22 correct,all of your projections about potential profit 22 23 could be misstated? 23 24 A. If they're not correct? 24 25 Q. Yes. 25 • 39 (Pages 150 to 153) KLEMM REPORTING SERVTCF - (67�) SR1-Rcnq 4/6/2004 depo of Norman Brody Benson Park Plaza vs City of Omaha Page 154 SIGNATURE OF THE WITNESS 2 1,NORMAN M.BRODY,the witness in the above li 3 deposition,do hereby certify that I have read the 4 foregoing deposition taken on April 6,2004,and that the 5 said deposition is a true and correct record of my 6 testimony,with such corrections and changes,if 7 necessary,attached. 8 9 NORMAN M.BRODY Date 10 (IF THERE ARE NO CHANGES,WRITE"NONE"BELOW) 11 PAGE LINE READS CHANGE TO REASON 12 13 14 15 16 17 18 . 19 20 21 22 23 24 25 • . Page 155 1 STATE OF ARIZONA ) ) ss. 2 COUNTY OF MARICOPA) 3 4 BE IT KNOWN that the foregoing deposition was 5 taken before me,JoANN KLEMM,RPR,a Certified Courtr. 6 Reporter,Certificate#50022,for the State of Arizona; 7 that the witness before testifying was duly sworn by me • 8 to testify to the whole truth;that the questions 9 propounded to the witness and the answers of the witness � .i 10 thereto were taken down by me in shorthand and 11 thereafter reduced to print by computer-aided 12 transcription under my direction;that pursuant to 13 request,notification was provided that the deposition • 14 is available for review and signature;that the 15 foregoing pages are a full,true and accurate transcript 16 of all proceedings and testimony had and adduced upon 17 the taking of said deposition,all done to the best of 18 my skill and ability. 19 I FURTHER CERTIFY that I am in no way related to > r. 20 nor employed by any of the parties hereto nor am I in any 21 way interested in the outcome hereof. 22 DATED at Phoenix,Arizona,this 11th day of April, 23 2004. 24 25 JoANN KLEMM,RPR,CCR Certified Court Reporter#50022 40(Pages 154 to 155) KLEMM REPORTING SERVICES - (623) 581-Rcn • SHERRETS&BOECKER LLC James D.Sherrets 260 Regency Parkway Drive Eric J.Williams (also licensed in Colorado&Arizona) Suite 200 Omaha NE 68114 Kayla M.VanCannon Theodore R.Boecker,Jr. (licensed only in Iowa) (also licensed in Iowa) phone:(402)390-1112 Jason M.Bruno Benjamin E.Maxell fax:(402)390-1 163 (licensed only in Arizona) email:law@sherrets.com Tuesday, January 4, 2005 Omaha City Council Members City of Omaha City Council 1819 Farnam Street, Suite LC-1 Omaha,Nebraska 68183 Re: Former Vicker's Plant Site at 6600 North 72nd Street in Omaha, Nebraska Dear Council Members: As you know, this Firm represents Benson Park Plaza and other concerned City of Omaha ("City") taxpayers for the above-referenced matter. As you also know, our clients oppose the proposed adoption of the Sorenson Park Plaza Development Plan ("the Development Plan"). As we have mentioned in previous correspondence, previous City Council meetings and previous.City Planning Board meetings, several reasons exist why the City Council should reject the proposed the Development Plan, along with the proposed "blighted and substandard" designation for the Property. As noted previously, the partner funding the project has entered into a Limited Partnership Agreement which calls for them to fund in the event that there is an award of$3.0 million of TIF or more. The President of the partner (Kimco's Norm Brody) testified under oath that if there was an award of$3.0 million and the other contingencies were secured (such as EPA approval of a work plan, which has not yet been obtained), Kimco would be obligated to go forward with funding. To justify that exorbitant $8.49 million dollar TIF request, KDI's representatives have tried to paint a picture suggesting that the site is environmentally contaminated with no hope of being used in the future. For example at the December 3, 2003 City Planning Board Meeting, Mr. Jobeun asserted that: "There is a substantial amount of contamination on the site such as cutting oils, solvents and cooling oils, which are buried beneath the ground . . ." * * * * * "We have submitted three proposals . . . for the remediation of the site to the EPA. The costs range from $2.2 million to $5 million to remediate the site. These proposals include . . . the moving of 17,500 tons of contaminated soil. If you equate that to truck loads, that's about 1000 truckloads of soil being removed from this site." * * * * * ". . . the TIF will . . . be used for the environmental remediation which . . . is between $2.2 and $5 million . . . The amount of the TIF request is $8,490,000.00. The project supports that amount. And, the amount of the TIF requested is necessary to make this project feasible given the high costs and risks associated with this particular project." * * * * * ". . . in order to get any kind of redevelopment at this particular site because of the high costs of remediation, you need those types of economic development tools to make this project work." * * * * * ". . . it's an incredibly expensive process; that's why the costs could be as high as $5 million for the remediation. The EPA likes that plan because what it does is that it cleans as much of that soil as they possibly can. Otherwise, if it even sits on this property for another 30 to 40 years . . . it will probably still be contaminated because you will have this slow extraction as opposed to the removal of the soil, and even with the removal of the soil, like we are talking about here, there's still contaminated soil below." Additionally, at the February 24, 2004 City Council Meeting, Mr. Jobeun stated: "Tests of the soil around the tanks indicated that they had been leaking. The contaminants included . . . cooling oils, cutting oils and solvents . . . The EPA confirmed that the underground storage tanks were the source of the contamination . . . and that the contamination was migrating . . . to the West." * * * * * "There has been discussion as to why we are using TIF . . . for the remediation . . . What has been required by the EPA . . . is that we remove the storage tanks and approximately 17,500 tons of contaminated soils . . . 17,500 tons of soil equates to about 1000 dump truck loads of soil. . ." However, thereafter, Michael Mostek of Koley Jessen, P.C., an environmental lawyer working on the project, stated that the soil contamination is not nearly as bad as Mr. Jobeun had previously represented. Specifically, at the December 1, 2004 City Planning Board Meeting, Mr. Mostek stated: ". . . recent tests have shown that the cleanup system for the soil that's been running the last 8 or 9 years has done a very, very good job. . . preliminary indications are that the soil . . . [is] . . . not very contaminated . . ." * * * * * "We don't expect the soil contamination to get any worse. There's no more releases or leaking or leaching or anything like that going on." * * * * * it. . . recent tests show . there's not much [residual contamination] . . ." * * * * * " . . . [tests indicate] that the soil cleanup-system has done a very good job. . ." Furthermore, Mr. Mostek stated that KDI has no interest in cleaning-up the site. In this regard, Mr. Mostek stated: "By virtue of our agreement with Eaton, anything that needs to be done to reconfigure the current setup has to be done by the developer. Once that's done, then it's . . . Eaton's baby again until the thing is cleaned up . . . we're not trying to clean it up. We're just trying to do what we have to do to redevelop." Recently, in a letter dated December 30, 2004, Eaton Corporation claimed that they would clean up the property and not use public funding. Notwithstanding these representations, KDI continues to include a line item in excess of $2.2 million for environmental work in its budged, in addition to more than $2.5 million for demolition and grading work already accounted for in the budget. The bottom line is that this site is not a present risk to the neighbors because the contamination has been capped. Eaton is responsible for a clean-up plan and is paying for the clean-up. The purported original justification for T1F - the environmental contamination - is nothing more than a red-herring. KDI is not cleaning up the contamination and their project is not made more expensive because of it. Indeed, if anything, because of the movement of contaminated soils, and the exposure of moisture to presently capped areas, this project actually runs the risk of creating further contamination for the neighbors, than eliminating it. As a consequence of the foregoing, there is no need for TIF on this project. Certainly, if any TIF is awarded it should only be the $3.0 million that the developer committed itself to proceed under. Sincerely, Theodore R. Boecker For the Firm a y -f o 0 ` � 0 oaod PO Fli C '0 `< 0 ... No C7 � � ,6 o. 0 0 A.� C 9 (-A C4 0 cn C \ .11. o ^ R, '' tea 4‘%% .. • o H Po o CoN T3- VI ALL C'i'a DUST.#i R E C E i .f ED DS`l.13 QS , � 10 3 3�January 7, 2005 DIST. 4 DIST s cif ,, 1, y Bobbie J. Moore DIST 17 �. ` 4 S704 North 40th Avenue STAFF STAFF 0'i" `` °'` l 'S"¢Omaha,NE 68111 CRY CLERK LQ.S9YIST Omaha Douglas Civic Center 10 '��J City Council RM LC-1 JAN Attn: Frank Brown—District 2 TR Dear Mr. Brown: I am writing to you regarding the Sorenson Shopping Mall to be located at the former Vickers Manufacturing Plant located on 72 Crown Point—Sorenson Parkway. I previously appeared before the city councilmen during a public forum as an interested taxpaying citizen and a resident to be both affected and benefited by this project. I am concerned that one of the councilmen,Marc Kraft,has proposed and/or suggested that the Tax Increment Financing(TIF)be reduced by a significant amount. Mr. Brown, if my facts are correct, in the 197 approved projects which included TIF since approximately 1980 it is unheard of that a councilman proposed the monies be reduced because of a personal projection of what a perceived financial benefit would be to the developer. Mr. Brown, I am especially concerned that the same councilman who has proposed the reduction in TIF for this project was one of those members who not only approved the original $5.2million for the Benson Park Plaza but supported the final certain that monies whyoucan ich included an approximately $680,000 increase. Mr Brown, appreciate how this looks to me as a life long resident of Omaha and the North Omaha area. The Benson Park Plaza was a project that was long overdue for this community. However, it is now time for the councilmen to step up to the plate and give its full support to this project which is both long deserved and overdue. It is time that the tax dollars be put to.use for all this city'scitizens rec not just a ognizing ng the fullect few. These potential of our developers should be commended and fully supported for community and stepping up to the plate to develop this project to give long deserved jobs for our citizens. The developer's of the Benson Park Plaza had the opportunity. e o ever,th h eey failedd we to give the community what it both wanted and deserved. They g should not have to pay the price. Page Two In closing, may I state that an additional project located at the AkSarBen location at 72d and Pacific did not have a proposal of reduction in their TIF. Why is the Sorenson project being targeted? Mr. Brown,this project should be supported as proposed. The reduction of monies could affect the final project. It is a known fact that the land has some contamination and the expense to address this can only increase with any continued delays of this project. Monies used to correct and/or alleviate any one portion of a proposal affect-the final anned it project. This project should be done as the developer's have eated as in the other projects, approvedasd the is or Tax Increment Financing should be treated increased. Sincerely, Bobbie J. Moore Cc: Gernandt Kraft Sigerson Thompson Vokal Welch I O bpa 0 IF')O CD ,E O O. g . (. N n C CD cD \ '0 p O O O .S.'". \ V+ N g 0 a to 4 b _ Q_ n N 0 (D RECEIVED INTEROFFICE MEMORANDUM 05 J;lid 1 0 All 9' 32 Law Department 4iis: Si DATE: January 7, 2005 TO: Mayor Mike Fahey, City of Omaha President and Members of the City Council Robert Peters, Director, Planning Department ' Ken Johnson, Economic Development Manager,Planning Department FROM: Bernard J. in den Bosch, Assistant City Attorney SUBJECT: Benson Park Plaza, L.L.C., v. City of Omaha, et al. Attached please find a copy of a Finding and Order entered by Judge Troia on January 5, 2005, wherein he addresses the Motion for New Trial or to Alter and Amend which was heard on November 2, 2004. You may recall that in the Order of Judge Troia, which dismissed the above- referenced cause of action, he made specific findings that Nebraska's Community Development Law was constitutional and that it was legally applied in this case. The Plaintiffs, through their counsel, filed a Motion for New Trial vociferously arguing that these findings were inappropriate. Please note in the attached Order that Judge Troia overrules Plaintiff's Motion for New Trial thereby leaving in affect the findings in his Order that Nebraska's Community Development Law was constitutional and, more significantly, that it was legally applied relative to the Sorensen Park Plaza Development in February 2004. If you have any questions or wish to discuss this further, please feel free to contact me. Respectfully submitted, .0 To CY Bernard J. in den Bosch D�IS T. 1 ✓#1 Assistant City Attorney DiST.;2 LIST.s3 DIST.,4 BJB:de DIST.#5 DIST.f3 DIST.#7 Attachment CH.OF STAFF STAFF CITY CLERK cc: Lou Andersen LQ9'3YIST Paul Kratz JAN 10 '05 T `1-d-1vx 44.ci 6 Tv; E-202 85g!PDIC 1-L-Y5 IN THE DISTRICT COURT OF DOUGLAS COUNTY, NEBRASKA BENSON PARK PLAZA, L.L.C., ) DOC. 1035 NO. 209 ) Plaintiff, ) vs. ) FINDING AND ORDER ) CITY OF OMAHA, MAYOR MIKE FAHEY, ) MARC KRAFT, FRANK BROWN, ) DAMES VOKAL, JR., GARRY GERNANDT, )- DAN WELCH, FRANKLING THOMPSON, ) And CHUCK SIGERSON, JR., ) Defendant. ) THIS MATTER came on for hearing on the 2nd day of November, 2004 on Plaintiff's Motion for New Trial or to Alter and Amend. Plaintiff was represented by Theodore R. Boecker, Jr. The Defendants were represented by Bernard in den Bosch, Assistant City Attorney. The Intervenors were represented by Gregory C. Scaglione. After receiving into evidence Exhibit 73 and for review of the subject matter and objections for hearsay, foundation and relevance and hearing arguments of counsel, the Court took the motion under advisement. Plaintiff argues that the Court must have an evidentiary hearing before it may rule on the constitutionality of the Community Development Law. Monarch Chemical Works, Inc. Vs. City of Omaha, 203 Neb. 33, 277 N.W.2d 423 (1979) recognized the constitutionality of the acquisition of lands for slum elimination, slum prevention, rehabilitation of substandard areas for low cost housing, community development as legitimate public uses. Plaintiff's Motion for Summary Judgment argued the requirements of Neb. Rev. Stat. § 18-2115 with respect to notice and the Court should invalidate the City Council's action and injoin the improper expenditure of public funds. Plaintiff relies on Board of County Commissioners of Sarpy County Vs. McNally, 168 Neb. 23, 95 N.W.2d 153 (1959). Plaintiff wants it both ways. The (Plaintiff?) asks the Court to recognize the Community Development Law and its requirements to suit its purpose but (also) asks the Court to declare the law unconstitutional insofar as the definition of "blight" and "substandard" under the Community Development Law. In its brief in support of its request for a temporary injunction Plaintiff argued that if the Legislature indented environmental contamination to justify designation of blighted and substandard it would have done so expressly. Fitzke Vs. City of Hastings, 255 Neb. 46, 582 N.W.2d 301 (1998) stated at 57: The CDL was enacted on the basis of the following legislative findings: [T]here exist in cities of all classes and villages of this state areas which have deteriorated and become substandard and blighted because of the unsafe, insanitary, inadequate or overcrowded condition of the dwellings therein, or because of inadequate planning of the area, or excessive land coverage by the buildings thereon, or the lack of proper light and air and open space, or because of the defective design and arrangement of the buildings thereon, or faulty street or lot layout, or congested traffic conditions, or economically or socially undesirable land uses. § 18-2102. The Legislature further determined: The elimination of such conditions and the acquisition and preparation of land in or necessary to the renewal of substandard or blighted areas and its sale or lease for development or redevelopment in accordance with general plans and redevelopment plans of communities and any assistance which may be given by any state public body in connection therewith are public uses and purposes for which public money may be expended and private property acquired. Id. In general, the CDL authorizes a city to create by ordinance a CRA for the purpose of defining and acquiring substandard or blighted areas and redeveloping them in accordance with the approved redevelopment plan, which-in turn shall conform to the general plan for the municipality as a whole. This expands the definition of substandard and blighted beyond areas that "contributed 'substantially and increasingly' to disease, crime, and necessitated excessive and disproportionate expenditure of public funds". The Court, therefore, finds that the pleadings and record are replete with references and arguments as to the constitutionality of the statute and that any further hearings on the matter would be repetitive. The Court, therefore, finds that Plaintiff's Motion for New Trial or to Alter and Amend should be overruled. IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED for the foregoing reasons that Plaintiff's Motion for New Trial or to Alter and Amend is overruled. DATED this 5th day of January, 20047 BY THE COURT: Joseph S. Troia District Judge CC: Theodore R. Boecker, Jr. Bernard J. in den Bosch Gregory C. Scaglione .i v 41 z 0 s8 Cd tea - r cr. ,..., g cr, ‘-- \ O O� cp CD a n 0 ,�to CD cn CD o to sm o ce x Brown, Buster (CCIk) From: h5048@aol.com Sent: Monday, January 10, 2005 2:19 PM To: bbrown@ci.omaha.ne.us Subject: Omaha.com Story from Bill Gaughan Bill Gaughan has sent you a message: Dear Buster Brown: Please distribute this to all members of the Omaha City Council. Thank You. Dear Sirs: I do not agree with the use of TIF $$$ mentioned in the attached article for the proposed shopping center near Crown Point Avenue where it intersects with Sorensen Parkway for the following reasons: {1} If the devlopers and retailers} feel this is a good area to build in, let them take the chance and not depend on our tax monies to benefit them. {2} If the developers and retailer{s} cared enough about the so-called blighted areas of our city, they would build within them instead of on the edge of them to help them become prosperous. {3} The monies we have would be better used to purchase new and updated Police cruisers, fire apparatus, fire stations, improved and safer intersections, infrastructure concerns, etc. These needs are too often put off for another year because someone says they want to do the city a favor and build a shopping center near a blighted area. Too many areas East of 72nd Street have needs greater than allowing a retailer or developer to benefit financially from our monies. Thank You for taking these commends under consideration. Sincerely, Bill Gaughan 5048 So. 37th Street Omaha, NE 68107 Tel. 731-3411 Beginning of Story Published City defends its use of incentives BY C. DAVID KOTOK AND JOSEPH MORTON WORLD-HERALD STAFF WRITERS A proposed tax subsidy to build a Target on a multimillion-dollar development on the west side of 72nd Street is the latest example of the city's growing use of incentives for retailing. The City Council is expected to decide Tuesday whether to grant $8.5 million to the developers of the shopping center on the site of the former Vickers plant on 72nd Street, between Crown Point Avenue and Sorensen Parkway. Opponents question the need to give a financial boost to a $6 billion development company to bring a large discounter to north-central Omaha. 1 They also have suggested that the project would set a dangerous precedent about where and when it's appropriate to offer tax increment financing, or TIF, which was created to stimulate economic activity and jobs in "blighted" areas. "What would stop a gas station at 132nd (Street) and (West) Center (Road) from saying, 'We want TIF financing to remediate hazardous waste in the ground?' " asked Franklin Thompson, who has been the one city councilman to vote against the project whenever it has come up. Developers obtain a bank loan in the amount of the TIF agreement. The city agrees to forgo property tax on the increased value of the fully developed property until the loan is repaid. City officials say the 600, 000-square-foot center is needed to provide shopping alternatives to northeast Omaha, including Florence, Miller Park and Benson. Major national retailers tend to locate on the edge of poorer, older neighborhoods instead of in the middle of them, City Planner Ken Johnson said. Using tax increment financing for retail development has always been controversial. Johnson and City Attorney Paul Kratz said regardless of location, the city continues to use the incentives sparingly and only to push development into underserved areas. They said there is no intention to expand the use of TIF to benefit every retailer. "The intent is not to move this out west, " Kratz said. Little opposition surfaced when TIF was used in the late 1980s to develop Stockyards Plaza at 33rd and L Streets and in 1999 for Benson Park Plaza at 72nd Street and Ames Avenue. Both were eyesores that the city wanted to redevelop. More recently, the city has used TIF to place Walgreens stores in northeast Omaha and on Park Avenue - while refusing it for the drugstores at 72nd and Cass Streets and 90th Street and West Dodge Road. The new Hy-Vee at 52nd and Center Streets also received the incentives for road and sewer work. Johnson and Kratz said there is nothing automatic about granting TIF. A committee of city officials carefully analyzes all requests. Developers looking at 72nd and Pacific Streets, for example, were told no TIF would be available. A privately financed new shopping area is going in anyway. "TIF is usually used as a catalyst to jump-start additional development, " said Michael Beyard, an Urban Land Institute fellow who specializes in retail development. Most cities, including Omaha, have used it to revitalize downtown areas in the hope that initial investments will lead to nonsubsidized spinoff development, Beyard said. Beyard, based in Washington, D.C. , said Omaha isn't alone in using TIF to encourage more retail options for inner-city residents. The Sorensen project seems to match retailers' preference to choose sites where they draw customers from the inner city and more affluent suburbs, he said. The strongest opposition to the development receiving tax subsidies has come from Benson Park Plaza and the Seldin Co. at 72nd and Ames. Their attorneys went to court and successfully forced the city to reapprove the new project. They argue that Vickers could sell the property as an industrial site, demonstrating that the area hardly meets the definition of "blighted" and say TIF isn't meant to cover cleaning up environmental contamination on the site. Even if the development receives TIF, it hardly require $8.5 million in public money to make the project feasible, attorney Ted Boecker said. 2 He contends that the Sorensen project budget submitted to the city has been padded with inflated costs that result in a significant understatement of the potential profits to the large developer, Kimco. The development ran into trouble last week when Councilman Marc Kraft attempted to trim the TIF package by $2 million. After meeting with developers late last week, Kraft said they made a strong case for the entire $8.5 million. Johnson and Kratz said that while the Vickers plant looks modern and the grounds are well- kept, the building has many leaks, collapsed sewer lines and contaminated soil that clearly qualifies it as blighted. The neighborhood also has changed, making manufacturing a less desirable use for the property. Immanuel Medical Center dominates the area to the east, and subdivisions have sprung up to the west. The city isn't a sucker, Johnson said. "This was a hard deal to get done, " he said. "We are not in this to make someone rich. " Contact the Omaha World-Herald newsroomCopyright &copy;2005 Omaha World-Herald&reg; . All rights reserved. This material may not be published, broadcast, rewritten, displayed or distributed for any purpose without permission from the Omaha World-Herald. End of Story 3 . z 0 b ° � � o c4 CD a cc IN-) n Z Q- 0 (1. ,9.. IS"' \ 40 \ , ..- 0 Po r � x • ° 0 1 cra