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From: Chapman, Kevin W. [mailto:kevinchapman@parkerpoe.com] <br />Sent: Tuesday, May 04, 2010 10:38 AM <br />To: Rich Koch <br />Cc: Pretty II, George H. <br />Subject: Analysis of including Section 3.2 of the ED Grant Policy <br />Rich, <br />As we discussed, this is the example that we used to analyze the inclusion of Section 3.2 of the ED Grant <br />Policy (added as Section III.F to the Incentive Agreement): <br />Investment = $15,873,016 (assume all personal property; 10% depreciation/year; no depreciation in Year <br />1). <br />Year 1 Taxes - $15,873,016 x 0.0063 = $100,000 property taxes due. Grant of $85,000 (85%). Net to <br />County = $15,000 (15%). <br />Year 2 Taxes - $14,285,714 x 0.0063 = $90,000 property taxes due. Grant would be expected to be <br />$76,500 (85%) with a Net to County of $13,500 (15%); however, the ED Grant Policy language would <br />require the net to = $15,000 (same as Year 1). This would result in a grant of only $75,000 or 83% to the <br />company. <br />Year 3 Taxes - $12,698,413 x 0.0063 = $80,000 property taxes due. Grant would be expected to be <br />$68,000 (85%) with a Net to County of $12,000; however, the ED Grant Policy language would require <br />the net to = $15,000 (same as Year 1). This would result in a grant of only $65,000 or 81% to the <br />company. <br />Year 4 would follow the same downward trend. <br />hope this is helpful. <br />Regards, <br />Kevin Chapman <br />Page 172 <br />