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Discuss Location Incentive for Prospect <br />bfaxch 6, 2006 Special EDA Meeting <br />Page 3 of 3 <br />If the EDA desires to provide a location incentive for the proposed project in the form of a <br />pay-as-you-go tax abatement, then staff recommends the EDA provide staff direction with a <br />percentage of financial assistance to the end market value and a cap dollar amount since the <br />market value of the project is undetermined at this point. Staffls reasoning fox the range of <br />"percentage of assistance" given is: 1) Since the City's portion of past incentives has been <br />approximately 10%, the range in the below table of 3% to 6% appropriately discounts the <br />small number of jobs being created and 2) The effective actual dollar amounts being <br />proposed should be in the range to compete as a location incentive. <br />The following table indicates a range of financial assistance amounts based on a percentage <br />of Financial assistance to market value. The number in parentheses is the estimated <br />number of years it would take to amortize the amount of assistance from the city <br />alone. <br />Market Value <br />Percentage <br />of <br />Assistance <br /> $10.8 millon $13.5 million $20 million <br />3% $324,000 4 $405,000 (4) $600,000 4 <br />4% $432,000 5 $540,000 5 $800,000 5 <br />5% $540,000 G $675,000 6 $1,000,000 (G <br />6% $648,000 7 $810,000 7 $1,200,000 7 <br />