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Councilmember Riley stated that the City should look at the deal being offered and determine the <br />need rather than the ask the developer is making. He did not like this proposal and stated that it <br />appears the City would essentially be guaranteeing the project. <br />Ms. Kvilvang stated that the subsidy is not a guarantee, noting that the developer would still be <br />at risk. She stated that there are many factors, noting that construction costs could come in <br />higher, the units may not lease as quickly as anticipated or the rent may not be what the <br />developer has thought. She explained that the subsidy would give the developer comfort to get <br />to the point of financing. <br />Councilmember Williams stated that she does like the project but does not like the location or the <br />ask the developer has made. She stated that the City needs to ensure that they manage resources <br />effectively and would like more assurance that this project would move forward. She did not <br />feel it would be worth the staff time for the City to make a counteroffer. <br />Mayor Strommen agreed that she would hate to waste the City's time developing an offer that <br />Dominium should be developing. She stated that either this project will be viable or not. She <br />stated that perhaps staff could provide general parameters such as a location and perhaps <br />Dominium can resubmit an LOI that meets those parameters. She stated that if Dominium <br />cannot or does not want to do that, the City will not be investing time in the project. She stated <br />that the location is a concern and stated that perhaps the Council can provide direction to staff on <br />parameters to use in this consideration and on future prospects. <br />Councilmember LeTourneau stated that in this instance the City would be investing and he does <br />not see a return on that investment. He stated that he would like to make sure that the return on <br />the City's investment is made clear. <br />Ms. Kvilvang stated that this is what every Council and staff face, determining what is actually <br />needed. She briefly reviewed her memorandum which identified the analysis of a cash on cash <br />return for projects. She also provided information on the subsidy parameters used for guidance <br />by other municipalities and the recommendations from Ehlers. She noted that the City can <br />require that the developer contribute at least $50,000 to $100,000 of their own funds so that they <br />have "skin in the game" as well. <br />Mayor Strommen questioned if the Council wants to implement something similar to what was <br />outlined in the City policy. She questioned if these are the general parameters that staff should <br />go back to Dominium with. <br />Asst. City Administrator/Economic Development Manager Brama stated that the existing <br />housing policy does not need to include those terms and thresholds but general direction could be <br />provided to staff as to whether to use those parameters when considering deals. <br />Councilmember Riley stated that he read through the memorandums and understands that these <br />are maximums and not guidelines. He stated that the EDA indicated that the equity requirement <br />should be higher and is unsure of what that amount should be, noting that $50,000 on a <br />City Council / June 9, 2015 <br />Page 13 of 18 <br />