Atcdevsumm Lower Merion Sum

September 18, 2009 SUMMARY OF DEVELOPMENT AGREEMENT THIS SUMMARY discusses the major provisions in a proposed Development Agreement between the TOWNSHIP OF LOWER MERION (“Township”) and DRANOFF PROPERTIES, INC. (“Dranoff”). I.

GENERAL

The Development Agreement sets forth the formal legal relationship between the Township and Dranoff for the Ardmore Station Project. The document separates certain activities into a “Public Project” and a “Private Project.” This is a legal formality made necessary because so much of the Project must be performed as public improvements to be publicly owned into the future. Overall, however, the Development Agreement makes it clear that Dranoff is responsible for completing the entire Project, whether performing it directly or as the Township’s development consultant. II.

III.

IV.

PARAMETERS OF THE PRIVATE PROJECT •

Mixed Use Building Consisting of Approximately Seven Floors

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Ground Level Retail;

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Residential Units Above Retail Units;

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Street Level Retail Connecting Lancaster Avenue with the Project; and

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Below Ground Private Parking for Residential units.

PUBLIC PROJECT •

Station Building, with Mixed Retail and Transit Commuter Facilities on the First Floor and Two Floors of Commercial Office Space Above;

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Multi-Level Garage for Public and Commuter Parking;

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Roadway Improvements to Support Transit and Pedestrian Circulation;

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New Pedestrian Overpass, Rehabilitated Existing Underpass or New Underpass Providing ADA Accessible Routes; and

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High Level Passenger Platforms on the Outside Tracks, and Lower Level Passenger Platforms on the Inside Tracks.

ACQUISITION OF THE AMTRAK SITE

A cornerstone of this development is the proposed acquisition of the Amtrak site located at and immediately adjacent to the existing station building and consisting currently of a number of above ground parking spaces. This area will become the new station with offices and the

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private residences and retail. Dranoff must work diligently to acquire the Amtrak site under an acquisition agreement with Amtrak, which also must provide that the Township will have the opportunity to acquire and complete the Project. (Section 1.1(a).) The Township will also have the right to acquire the site following Dranoff’s acquisition of the site if Dranoff fails to commence construction within three (3) years after acquiring that site, subject to extension for Township delays. (Section 1.1(a).) In addition, if Dranoff does not complete construction, the Township will have a right to assume Dranoff’s construction loan and complete construction. (Section 1.1(b).) V.

DESIGN AND CONSTRUCTION OF THE PRIVATE PROJECT

A. The parties acknowledge that the conceptual design in Exhibit “D” is consistent with their expectations as of the date of the Agreement. In addition to all of the Township’s land development approval rights under law, the Township will have an extra right to approve the final design. (Section 1.4(a).) B. BMR Housing – Ten percent (10%) of the total residential units must be BMR units. [Note: This was consistent with the Memorandum of Understanding.] (Section 1.5.) C. Dranoff must enter into an agreement with Amtrak, which must be entered into on or before June 30, 2010. (Section 1.1(a) and Exhibit “C”.) Dranoff must obtain financing by December 31, 2012. VI.

PROJECT TIME; PROJECT BUDGET; ZONING; FINANCING

A. Dranoff has the obligation to commence the Project with an outside date of December 31, 2012 (Section 1.2(c) and Exhibit “C” to the Agreement), although the expectation is that that is a very outside date. (Section 2.1) Dranoff must complete the Project within four years after commencement, subject to forces beyond Dranoff’s control. (Exhibit “C”.) B. Dranoff must construct the Project in accordance with the Schedule. The Township has the right to inspect the construction of the Private Project for the purpose of determining conformity to the approved plans. (Section 2.1) C. Dranoff has the obligation to prepare a budget and obtain approval of the budget. (Section 2.2.) The Project must complement the existing architecture within the Ardmore Commercial Historic District, comply substantially with the Ardmore Storefront Design Guidelines and the development design standards of zoning. There is a recognition that the Garage and other items may require further Township action in order to amend zoning, which will be necessary if the Project is ultimately going to proceed. (Section 2.2(a).) D. Dranoff must utilize environmentally sustainable planning and construction methodology and reasonably endeavor to obtain green building certification. (Section 2.2(c).) E. Dranoff is expected to finance the Project from its own sources and also to raise funds from public sources, including grants from federal, state or county government, or county, state and federal loans or assistance. The parties must agree in the future on a schedule of 2 447209_1 September 18, 2009 (3:49:38 PM)

sources and uses matching up the various funding sources to both the Public and Private Projects. (Sections 2.4 and 2.5.) F. Dranoff must pay the Township One Million Dollars ($1,000,000.00) for the Land, and the Township’s sole financial obligation to contribute to the cost of the Project shall be to apply an amount equal to the Land payment actually received. (Section 2.6.) VII.

PUBLIC PROJECT – DEVELOPMENT MANAGEMENT SERVICES

Dranoff provides a vast array of services for the Public Project from advising the Township on the overall Project, to assisting in the selection of contractors, coordinating the preparation of drawings, obtaining licenses and permits, reviewing change orders, scheduling meetings, monitoring the progress of construction, negotiating easements and other property rights, and in general performing all other aspects of coordination, administration, management, planning, design, development, financing and construction of the Public Project. (Section 3.4.) VIII. GARAGE; TRAFFIC; PEDESTRIAN ACCESS The Agreement contemplates at least five hundred (500) parking spaces above ground. Below ground level, the Garage will be used for residential parking by Dranoff. (Section 4.1.) Dranoff must maintain the area below the ground and ramps leading down below the ground floor; the Township will have responsibility for entering into an agreement with Amtrak and SEPTA for use and maintenance of areas above the ground. Dranoff is responsible for performing any necessary traffic studies and incorporating traffic calming and pedestrian safety measures into designs for Lancaster Avenue and adjacent roadways. Dranoff is also responsible for improving pedestrian access across Lancaster Avenue and other nearby roads. Offsite improvements to Lancaster Avenue are to be part of the Project. (Sections 4.2 and 4.3.) IX.

FEES, EXPENSES AND STAFFING

Dranoff will obtain a development fee of 2.5% and a general and administrative fee of 2.5%. (Section 5.1.) Dranoff will bear all of its own out of pocket expenses and internal expenses. If the deal goes forward, the Township will get all fees and expenses reimbursed. If the deal is terminated, Dranoff will pay for Township expenses (not including its 20% match for the $5.8 Million federal transit grant) from March 10, 2008 through the date of the Development Agreement. Dranoff will also pay for Township expenses after that date if Dranoff does not enter into an Agreement with Amtrak and does not terminate the Development Agreement for that reason by June 30, 2010. Funds for reimbursement may arrive prior to that date, and the Township must either use the funds for that purpose or credit Dranoff for the funds used. (Section 5.2.) X.

DEFAULT AND REMEDIES

If Dranoff defaults, the Township may terminate the Agreement, exercise specific performance, discontinue payments to the Developers, obtain monetary satisfaction of any indemnity or reimbursement obligations and terminate Dranoff’s right to future phases. If the 3 447209_1 September 18, 2009 (3:49:38 PM)

Township defaults, Dranoff may either exercise specific performance or terminate the Agreement. XI.

FUTURE DEVELOPMENTS

The Township agrees to a five year exclusive negotiating period beginning with commencement of construction with Dranoff for future phases, of the Cricket and the “Ardmore West” lot. If an agreement is reached, the parties contemplate that (i) Dranoff could build condominiums and (ii) purchase price payments required to be made for the future phases will be what was contemplated at the time of Dranoff’s response to the RFP, i.e. $2,000,000 for Cricket and $1,000,000 for Ardmore West.

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