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Economic Development Manager /Assistant City Administrator Brama presented the staff report. <br />Chairperson Steffen stated as written earnest money becomes hard only if they request for an <br />extension. <br />Economic Development Manager /Assistant City Administrator Brama indicated that was correct. <br />Member Riley indicated when he read the second paragraph, it looked like the earnest money <br />would become hard upon a second extension so there would be one free extension. He wondered <br />if CBRE had input on this. <br />Economic Development Manager /Assistant City Administrator Brama stated CBRE did review <br />this policy and did provide a lot of recommendations in the policy. He stated the CBRE is <br />motivated to close deals and would support some sort of hard money up front at some level but <br />are very cautious of not going over the top because they are afraid it would scare away some <br />deals. <br />Chairperson Steffen thought the word "second" could be removed from the paragraph. <br />The Board agreed. <br />Member Williams did not know if $1,000 or $1,500 is going to incent someone to close on a <br />property and she thought it was on the low end for earnest money. She did not think it would kill <br />a deal and she would support Councilmember Riley's suggestion to keep a hard earnest money at <br />the first request for due diligence extension because that is pretty standard and happens all of the <br />time. She also suggested removing the second extension wording. <br />Member Hardin stated he was always concerned about putting too much detail into a policy <br />because they need some flexibility. He stated every deal is different and the amount of earnest <br />money needed per project is different and might depend on many different factors. <br />Member Riley asked if they wanted to change the earnest money amount in the policy because it <br />was indicated it was low by a few members. <br />Economic Development Manager /Assistant City Administrator Brama stated CBRE along with <br />his research indicated the earnest money could be anywhere from 1.5% to 3 %. <br />Member Williams stated in her experience earnest money is an art not a science and it has a lot <br />to do with who is holding the most risk and who is the most interested in seeing certain things <br />happen. She stated they need to find a balance. <br />Member Hardin asked if they should remove the dollar amounts and have a blanket statement <br />indicating the City will require earnest money contingent upon the size and scope of the project. <br />He thought this would allow the City to be more flexible. <br />Economic Development Authority /January 8, 2015 <br />Page 7 of 10 <br />