Industrial Brownfield Redevelopment Plan

[Bill Snyder]

So, I've got experience with very large (greenfield) development; $485MM International heavy manufacturing development for a Fortune 100 company, and relatively small (greenfield); ~$1MM commercial self storage development for myself. What I don't have, is specific experience relating to brownfield redevelopment (in the $3-6MM range) and engagement/grants/funding under the various strategic and redevelopment programs like OPRA/BFRA and other, more local revitalization programs.

I am in the very initial exploratory stages of potentially acquiring a large-ish industrial parcel in the downtown area and have pitched a general concept that the controlling authority likes. In discussions, they have asked for my entity to obtain liability insurance for onsite visits (no problem), they would pay for a Phase 1 and we would split a Phase 2 survey. For where we're at in the process, all of this is a no brainer. What I am leery of at the moment is:

1. They would like to base site price on a market appraisal. This seems fraught with peril to me as it is an abandoned industrial manufacturing site with existing structures of unknown condition. My preference would be to have the site handed over for $1, in exchange for development milestones or performance metrics on the property. What are options or middle ground on this? 

2. They also want a proforma business plan of phases and developments in order to move forward on this. This seems like putting the cart before the horse to me. I really have no idea if this concept is even feasible without much more intimate knowledge of the structures, conditions, and potential costs. Putting together a business "plan" at this point is more wishful thinking than an actual plan. Again, what are options on this? I feel I need, at a minimum, a signed NDA from those involved, just to present a concept. Is it appropriate to put this under some sort of contract, at this VERY early stage, just to discuss plans for the property.

Just kinda looking for some general insights and a rough "order of operations" from those that might have some relevant experience. This specific scenario is not in my area of expertise.