The city of Mandan is sending potential downtown developers Hopfauf Custom Builders and Dakota Commercial & Development Co. letters of understanding setting the process in motion.

Business development director Ellen Huber explained to city commissioners that the letters of understanding help the proposed development "take the next step." They outline the timeline and terms the developers have to set to get their projects in motion.

The city will sell the downtown property to Hopfauf and Dakota for a dollar; provide assistance as possible through the Renaissance zone, tax increment financing and Lewis and Clark Regional development Council financing; and enter into a Business Incentive Agreement that will define goals for the project and a description of the financial obligations if goals are not met.

Hopfauf and Dakota are asked to form the appropriate entity to be the owner; provide proof of sufficient financing by Aug. 1; and provide a parking plan by Friday.

The Hopfauf proposal is to reconstruct the historic building that stood at the corner of Collins Avenue and Main Street. Shannon Gangl has indicated she intends to put a Bennigan's restaurant on the ground floor. There will be 15 condominiums on the second and third floors. The estimated cost is $8 million.

Dakota is proposing to redevelop three parcels of property on the 200 block of West Main and First streets. Plans call for two four-story apartment complexes with about 95 units. The estimated cost for the two buildings is $9 million. The buildings are expected to be constructed in phases.

Huber said that eventually the projects will generate $400,000 annually in property taxes.

"Initially, we can expect they will request tax exemptions, but the eventual return will far be in excess of what the properties brought in previously," Huber said. "There is also potential for sales tax and hospitality tax revenues."

(Reach reporter Gordon Weixel at 250-8255 or gordon.weixel@bismarcktribune.com.)