TICD's Share of Vertical Development. To the extent TICD and affiliated companies participate in the vertical development of the Property, they will pay full fair market value for the land, just as any third party developer would, pursuant to an appraisal process to be set forth in the DDA. TICD affiliates also must have similar creditworthiness and development experience as will be required of third party developers under the DDA. TICD and its affiliates will have the right, but not the obligation, to develop 100% of the vertical commercial development, including the hotels. TICD's right to construct the vertical residential development will be structured to accomplish the following objectives: (i) implement the urban design concepts for the residential component described above, particularly the requirements for high quality architecture and architectural diversity, and (ii) provide adequate benchmarking of each product type for the appraisal process described above to ensure that the land for the vertical residential development is transferred at fair market value. As a mechanism to accomplish these objectives, the DDA will allocate development of the market rate residential units as follows: • Pads for at least 20% of the market rate residential units (the "20% Auction Pads") will be sold via a blind auction or other mutually agreeable process. Acceptable bidders will be reasonably pre-qualified by the Authority and TICD pursuant to an RFQ or other mutually agreed upon process to be established in the DDA. Prior to the close of escrow under the DDA for each Major Phase, TICD and the Authority will (1) identify the locations of the 20% Auction Pads in such Major Phase in order to accommodate the benchmarking objective for each product type and (2) agree on a minimum bid price for each 20% Auction Pad in such Major Phase, which unless otherwise agreed by the parties, will be no less than the price for such product reflected in TICD's pro forma, as updated prior to the close of escrow for such Major Phase. The DDA will set forth an appraisal process or other mutually agreed upon dispute resolution process that will be invoked if the parties are unable to agree on a minimum bid price for the 20% Auction Pads. TICD and its affiliates will have the right to bid on a 20% Auction Pad only if no qualified third party bids are received at or above the minimum bid price. If TICD or an affiliate is the successful bidder for any 20% Auction Pads, such pads will not count against the percentages allocat...
