25J - AGMT - NEGOTIATING AGMT FOR YMCA REUSE

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help obtain New Market Tax Credits for the project. It is anticipated that St. Joseph Health and Taller San Jose will equally share funding for project costs. However, the two entities will work together to raise the necessary funds to complete the project. If there is a shortfall in the fundraising efforts, St. Joseph Health has the ability to provide a loan to the project to fund the renovation costs, giving the team additional time to continue fundraising. St. Joseph/Taller San Jose proposes that the City donate the fee interest in the site at no cost to the project. Furthermore, St. Joseph/Taller San Jose is not willing to enter into a long -term ground lease. However, the team may accept a provision in the DDA that would provide the City with a first right of refusal if the project is sold after conveyance to the St. Joseph /Taller San Jose development team. These provisions will be negotiated in further detail if St. Joseph/Taller San Jose is selected to enter into an Exclusive Right to Negotiate for the project. Based on a review of the financial statements, it appears that St. Joseph has sufficient cash -on -hand to complete the proposed project if the necessary funds are not raised within the proposed timeline. However, Taller San Jose, as a separate entity, does not have sufficient cash -on -hand to fund the proposed improvements. As such, Taller San Jose will need to embark on an aggressive fundraising campaign in order to raise their share of the estimated project costs. It is possible that Taller San Jose will not be able to meet their fundraising targets with regards to the development timeline of the project. However, St. Joseph stated that they may be willing to loan funds to the project to allow for additional fundraising time for Taller San Jose to obtain the necessary funds for their share of the project costs. Page 4 of 4 25J -8