Agenda - Council Work Session - 01/21/2014

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c. Then, one half percent (0.5 %) for Development Capital Costs in excess of $100 million -$150 million; d. Then, one quarter per cent (0.25 %)for Development Capital Costs in excess of $150 million. e. Example of the application of the above subparagraphs a.-d. of this paragraph 4: An agreement is signed for a development with an estimated total Development Capital Cost of $180,000,000. The Incentive Compensation shall be calculated as follows: i. 2.0% of $30m = $600,000 ii. 1.0% of $70m = $700,000 iii. 0.5% of $50m = $250,000 iv. 0.25% of $30m = $75,000 v. Total Compensation = $1,625,000 5. Phased Projects — In calculating the Incentive Compensation on projects where occupancy is anticipated to be phased over a period greater than 24 months from the spring of the year following closing of the transaction (phased start), a discount to the Incentive Compensation will be applied as a means to recognize the delay in property tax payments realized by the HRA. a. For each 12 month period the project, or portion of the project, is anticipated to be phased beyond 24 months, the Incentive Compensation for that portion of the project shall be discounted by ten percent (10 %). b. Example: A sale occurs for an apartment project consisting of six buildings. Two are to be constructed immediately; two are anticipated to begin the following year, and the last two the year after. Each phase is roughly $20m in value. i. Phase 1 Incentive Compensation shall be the full two percent (2 %) of the $20m or $400,000. ii. Phase 2 commencing later than 24 months after the spring following closing shall be the full Incentive Compensation ($400,000) discounted $40,000 or $360,000. iii. Phase 3 commencing later than 36 months after the spring following closing shall be the full Incentive Compensation ($400,000) discounted $80,000 or $320,000 iv. The total Incentive Compensation for the example phased project would be $1,080,000. Ramsey -2011 DM Agreement 10