March 26, 218 Dear JP, ‘Thank you for your proposed term sheet. We have had an opportunity to review and provide the following response to your proposed terms. The proposed terms are subject to the City being able to acquire the properties between Overland and San Antonio. As of today, the City has not made any effort towards the acquisition of those properties. The City is also limited on its expenditures of funds only to advance for a public purpose. This may limit the City’s ability to acquire areas and to keep properties it already ‘owns outside the MPC footprint and plaza areas. | look forward to a timely, amicable resolution and hope you find our proposed terms acceptable. As you noted, it’s in all of our interests to be proud of the final outcome. The following are your terms with our proposed responses and/or solutions to achieve the same outcomes: 1. The photo map with MPC and MPC Plaza, including the road from Santa Fe St. to Chihuahua St, that you gave me is an acceptable depiction of the area on which the City will build the Multi-Purpose Center and the Multipurpose Plaza. Response: This is an important part of Downtown and would create the right win-win scenario. A proposed new road connecting Santa Fe and Chihuahua is envisioned to be a flexible access for pedestrian and vehicles. The location of it will be determined within the footprint as part of the final design (See Layout 1),Layout 1 2. The properties in Duranguito that will be preserved from demolition are: 306, W. Overland Avenue (The Mansion); 305, 309, 311, 313, 321, 323, 325, 327 Chihuahua Street; 215 and 301 W. Paisano Drive: and 325 S. Santa Fe Street; and the Trost fire house at the northwest corner ofS. Santa Fe Street and W. Paisano Drive. All these properties are shown on the photo map. The City will terminate all demolition permits for these properties. Response: With the revised site plan, demolition of the properties you request to be preserved is not necessary for the Multi-Purpose Facility with the exception of 325 Santa Fe and 215 Paisano. The City would like to incorporate 215 Paisano and 325 Santa Fe as part of the expanded MPC Plaza. This will allow full activation of the area and enhance the experience for citizens and visitors accessing off Paisano. The existing improvements on those two properties are a parking lot and a warehouse (non-contributing). The city would nominate the Trost Fire House to the National Registered Historic Places. This will allow the City to realize the full potential of the project, with the main entrance from Paisano, setting the Trost Fire House as the landmark entrance to the area. See Layout 2. Layout 2With the balance of the properties requested to be saved, the City is limited in its ability to prevent the demolition of those properties that are not owned by the City. Please see Layout 2A showing the properties ownership status. ‘The way the properties can be preserved are as follows: Properties under contract of sale with the City (305, 309, 315, 323 Chihuahua): The City will not be able to follow through with purchase of the properties because there is no longer a public purpose. You can enter into an agreement with the City to assume the City’s buyer role in the contracts of sale. You can then preserve the buildings as you requested. The City will make available to you technical and financial incentives associated with Historic Preservation and Downtown Redevelopment provided under the current policies. Properties owned by the City (306 Overland, 311, 321, 325 Chihuahua, 301 Paisano and the Trost Fire The City can enter into a contract of sale with you for properties currently owned by the City to allow for preservation of a contiguous zone with the exception of the Trost Fire House. The city agrees to rehabilitate and incorporate the Trost Fire House into the overall development. As noted above, the City will make available to you technical and financial incentives associated with Historic Preservation and Downtown Redevelopment provided under the current policies. AY OF BL FAB0 Layout 28 Property not owned or under contract (327 CIThe property owner has refused to enter into any negotiations with the City. Perhaps you can approach the property owner to acquire the property to ensure its preservation. 3. Chihuahua Street will remain a public street in order to provide access to the properties. on the west and east sides that are being preserved. Response: ‘The City agrees to keep Chihuahua Street open from Overland to Paisano. The City does reserve the ‘option to reduce the width of the road to provide wider pedestrian sidewalks and amenities. Chihuahua Street from Overland to San Antonio will be vacated per the accepted layout. See Layout 3 showing red path access. Layout 3 4. Half the width of W. Overland Ave. will be retained in front of 306 W. Overland Ave. and 305 Chihuahua St, so that there is access to these two buildings from the street. Response: Access will be maintained for the properties on 305 Chihuahua and 306 Overland. This will be accomplished as a half road for shared pedestrian and vehicles. The width will be determined during the final design of the project. During MPC events, access will be restricted to pedestrians only. The City also reserves the right to aerially encroach onto Overland ensuring 16° vertical road clearance in accordance to AASHTO standards. See Layout 3 showing red path access.We would like to discuss repairs to the properties at 305, 309 and 315 Chihuahua St, and 215 W. Paisano Dr. that was caused by the partial demolition on September 12, 2017. These buildings are being preserved from demolition and need to be repaired and sealed so that they are not permanently damaged by the elements. Response: The City is willing to work within the legal constraints to make the repairs to the damage caused by demolition commenced by the private owner. The legal constraint is that the City cannot use public money to repair private property. The City will continue discussions with our legal counsel to explore ‘opportunities for the City to contribute towards the repair these structures. See Layout 5 for locations. Layout 5 6. In order 10 permanently protect the buildings being pré ordinance establishing a local H-overlay district that will include al the property described in the citizens" petition that was presented to City Council excepting the properties on which the MPC and MPC Plaza will be constructed, We believe it important that the City join with the County in recommending that the area covered by the local H-overlay district also be designated as a National Register District to make tax credits available to owners of property in this area, and the City will ensure that there are no legal impediments in the municipal code that would obstruct this effort. This is a critical feature since 1ax credits will make these eserved, we ask the City to adopt anproperties extremely attractive to investors and help insure long term investment in the downtown, Response: The City agrees to join EI Paso County in recommending that the area be designated for the National Register of Historic Places (NRHP) to make tax credits available to private owners, except the properties at 325 Santa Fe and 215 Paisano (refer to response to item #2). This will make all properties available for federal and state economic incentives. The City is also proud to have a local code amendment (20.20, 080 A, El Paso City Code) that subjects National Register properties to local Historic Landmark Commission review ‘The City cannot impose a local H-overlay on non-city owned properties without property owner approvals or City Council action. You can accomplish the local H-overlay by acquiring all agreed upon selected properties and work with the City to process the ordinance to establish the H-overlay as per 20.20.040 of the El Paso Code of Ordinances. Please note that the property at 327 Chihuahua is not owned by the City or under contract of sale with the City. See Layout 6 for location. Layout 6 7. We would like to discuss moving the Chinese laundry building to another site. The City owns several vacant lots on Chihuahua St, that could be suitable. The Chinese laundry is important 10 the El Paso Chinese community and should be preserved in some form, though we will consider the new information you provided in making the assessmem.Response: ‘The City does not currently own the property. The City is in the process of working with the bankruptcy court to make the final acquisition. if and when the City has acquired the property, we can discuss further efforts to relocate a portion of the property. The City has done an assessment of the structure and facade and determined that relocation of the entire structure is not feasible. There may be an opportunity to relocate the facade, however, its likely to be damaged. We would request that you salvage and relocate the facade of the structure. The City will make available to you technical and financial incentives associated with Historic Preservation and Downtown Redevelopment provided under current pi The final location can be discussed at a future date. The City has several pictures of all these facil including the inside.Additional City Requests The City requests the following additional term: The City has proceeded in its effort to develop a contributing municipal facility within the downtown fabric that will improve the quality of life for its citizens. By agreeing to this these terms, the City is agreeing to give up the possibility of full redevelopment of a portion of its downtown fabric. The City requests a plan for the preservation and use of the remaining structures. The plan needs to cover these restored structures and properties and contribute to the overall downtown and Union Plaza areas. This plan will be critical in the development of the overall vision for this area, 8. The City and Dr. Max Grossman will take steps to jointly dismiss all pending litigation in El Paso as well as the appellate cases pending in the 3rd Court of Appeals and the 2nd Court of Appeals. Each party will pay its attorney's fees and costs. Response: There are significant legal hurdles that will prevent a settlement from being concluded as proposed in bullets 8, 9 and 10. The goals of the parties and the settlement can be accomplished but the resolution of the legal issues will have to occur in another manner. The problem is that the Austin trial court judgment prevents the City from constructing the MPC to accommodate sporting events and from using non-bond funds in connection with the construction of the MPC. As a result, the appeal pending in the 3rd Court of Appeals cannot simply be dismissed. In order to accomplish the goals of the proposed settlement the Austin trial court’s judgment must be reversed and a new final judgment will have to be entered by the Austin trial court that fully authorizes the MPC as envisioned by the City and by the proposed settlement. Accomplishing this will require the involvement of counsel for the City and Dr. Grossman, and possibly counsel for the Morales plaintiffs in the Austin suit and counsel for the private owners of the effected property, to work together to develop the strategy for reversing the Austin judgment and the entry of the necessary judgment. The City is ready to instruct its counsel to begin these discussions with Dr. Gross man’s counsel, ‘The appeal pending in the 2 Court of Appeals can be dismissed but steps noted in items 2 & 5 will need to be taken so that the private owners of the property involved in that appeal do not proceed with the demolition of the buildings on their property.‘The City agrees that each party will pay its attorney’s fees and costs. 9. The City and Dr. Grossman will ssue a mutually agreed joint press release announcing the terms of the settlement. All parties will refrain from making any posts settlement statements to any ‘media outlet or any organization that contradict or question any statement made in the joint press release or cast aspersions on any person associated with the Duranguito litigation. For the reasons discussed above in the response to item 8, it may be some time before the final terms of the settlement, including the terms for resolving the legal issues, can be determined and concluded, soa Joint press release regarding the settlement will have to be delayed until resolution. In the interim, the parties will have to work out what agreed statements they can make to the media regarding the continuing efforts to reach a final settlement. 10. The City and Dr. Grossman will prepare a formal settlement agreement as soon as possible that incorporates the above terms. The formal settlement agreement shall be presented to City Council {for approval at the first regular City Council meeting in April, 2018. Mayor Margo agrees to recommend to City Council that the formal settlement agreement be approved. In the interim neither the City nor Dr. Grossman will take any actions that are inconsistent with the foregoing terms. Ultimately a formal settlement agreement will be prepared and presented to the City Council for approval with my recommendation that it be approved. However, for the reasons discussed above in the response to item 8, it may be some time before the final terms of the settlement, including the terms for resolving the legal issues, can be determined and concluded. The formal settlement agreement therefore could not be presented to City Council in April, 2018. The City agrees that in the interim the City and Dr. Grossman should not take any actions that are inconsistent with their efforts to implement the settlement. Sincerely, Mayor Dee Margo City of El Paso.