City To Terminate TIF Agreement

The Manhattan City Commission will terminate their agreement with the Third Street TIF Diveloper at a special meeting tonight.

In November the City signed a Pre-development Agreement with Plaza Manhattan, LLC to develop the Third Street area and a part of the
Manhattan Industrial park. Here is part of a memo given to the Commission:

BACKGROUND

On November 7, 2000, the City Commission authorized the Mayor and City Clerk to enter into a Pre-development Agreement with Plaza
Manhattan, LLC, the developer working to establish two Tax Increment Financing Districts near the Downtown area. The Pre-development
Agreement provided for the framework for a relationship between the City and the Developer. The Pre-development Agreement set forth a
six-month timeframe for the agreement unless certain requirements were not satisfied.

DISCUSSION

As the City Commission is aware, both of the proposed Tax Increment Financing Districts are not proceeding due to actions of other
governmental bodies. The establishment of one or both of the districts was one of the requirements set forth in the Agreement. Given the
present circumstances, it appears that it is in the best interest of the City to terminate the agreement as to both of the proposed projects. The
Agreement sets forth guidelines under which it may be terminated. In order to terminate the Agreement, the City must give written notice of
intention to the Developer to terminate the Agreement as to one or both of the projects.