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EDC Minutes January 15, 2016 Page 3 of 8 project doesn’t qualify, the developer isn’t out much financially. If the project does qualify and it is determined that it should move forward, then the developer would submit the $10,000 deposit. This is when the financial consultants and legal team would conduct a detailed analysis of financial statements and other documents including the “But-For” analysis and other required documentation. An example of the “But-For” analysis is found on page 17. Ehler’s changed the Total Return on Equity column with assistance from 12% which they felt was unrealistic in the current market to the 7.93%. Ehler’s doesn’t recommend projects that would provide more than a 12% return anyway. Overall, Ehler’s ended up combining the TIF and Tax Abatement application. The Tax Abatement application had a stand-alone agreement with the developer and the TIF application had a section where the developer was required to sign giving approval to move forward. The application was combined to use the signature approach. Ehler’s also kept the housing and commercial/industrial development worksheets separate because the commercial/industrial worksheet is heavy on the job creation scoring while the housing worksheet is focused more on the added valuation, livability, location, amenities, etc. Ehler’s also had some concern about the Confidentiality Agreement on page 15 stating that while the initial information the developer submits could be considered confidential, at some point when the project has been approved and/or completed, some of the developer’s information may be considered public. Staff had the city’s attorney review the agreement and it was determined that it is acceptable and should remain in the application packet. Beeman stated that staff feels this is a good policy and a good way to approach the policy by combining them into one five page policy. The combined policy simplifies it for everyone involved. Beeman informed the EDC that if they see anything in the policy that is a concern, is glaring, or would raise any red flags then this is a good time to bring up those concerns before the policy goes to the EDA for approval. This policy would not require a Public Hearing to be approved. However, the Business Subsidy does require a Public Hearing to be approved. The Business Subsidy also is virtually 50% verbatim from Minnesota State Statute. The combined policy has more flexibility in what local governments can formulate as their policy. However, cities must still closely follow the State Statutes. Chair Helgemoe asked for the next steps in the process. Beeman informed the EDC that if there were not changes then a motion would need to be made recommending the combined policy to the EDA for approval. Vice Chair Freichels asked how the combined policy relates to other cities and their policies. Beeman stated that this policy is close in content to many other cities because Ehler’s and Kennedy & Graven work with several other cities in developing their policies and they are able to see the most current versions and trends and they ensure that the policy is following the most current State Statutes. Both consultants have also recommended that the TIF and Abatement policies be combined because this is what they are seeing other cities do in order to simplify the process.