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Economic Development Incentives Policy-June 2007 Page 3 San Marcos is committed to the promotion of quality development in all parts of the City and to improving the quality of life for its citizens. In order to meet these goals, the City Council will consider providing a property tax phase-in, sales tax rebates and other incentives to stimulate economic development in San Marcos and its Extraterritorial Jurisdiction (ET J). The City will consider providing incentives to appropriate businesses in accordance with the procedures and criteria outlined in this Policy. Prospective businesses are strongly encouraged to discuss potential incentives with City officials and staff members early in the stages of a development, since a project is not eligible for incentives under this Policy if a building or site development permit has been issued for the project before an incentive application is submitted and approved. 3. EliQibility Criteria The following criteria must be met for an applicant to be considered eligible for property tax phase-in and any other economic development incentive. Additional criteria for specific incentives are listed below under their individual description or with the issuing agency if not the City of San Marcos in this Policy: a. The proposed development and/or redevelopment must create and maintain or retain at least 5 jobs, and/or b. An investment by the applicant of at least $75,000 in property improvements is required. c. In addition to meeting a or b above, the project must conform to the requirements of the City's Master Plan, Land Development Code and other applicable City ordinances (except to the extent waived or modified in a development incentive agreement in accordance with this Policy). 4. Evaluation Criteria The following criteria will be considered in determining what level of incentives will be provided to the applicant. Preference will be given to businesses that use local suppliers, contractors and labor force, and require no new public improvements. a. Expansion of the local tax base. b. Creation of permanent employment opportunities. The number and types of jobs to be created or retained (full-time vs. part-time) and whether or not benefits for employees will be provided. c. Whether the architecture and site design including landscaping and public amenities meets or exceeds the minimum requirements in the City Code. d. Whether City utilities will be used. e. The types and cost of public improvements (e.g. streets, water, wastewater, drainage) and services (e.g. fire, police) which will be required of the City. f. The types and value of public improvements which will be made by the applicant. g. The financial capacity of the applicant to undertake and complete the proposed project. h. The extent to which the proposed project will make use of local contractors, suppliers and labor force (from the San Marcos area) during construction and during operation. i. Appropriate type of activity for the designated zoning (e.g. office, retail, etc.). j. The market conditions and growth potential for the business activity. k. The method or methods which will be available to recapture property tax revenue lost as a result of entering into a tax phase-in agreement with the applicant if the applicant fails to fulfill its responsibilities under the agreement. I. The amount of time necessary to complete the project and create the jobs which are to be provided by the applicant. m. The extent to which the proposed project carries out the goals and objectives of the City's Master Plan. n. A comparative analysis of the costs of the incentives requested to the benefits provided to the City by the applicant's development or expansion. o. Other incentive programs for which the applicant has applied or is qualified. p. Any other factors that the City Council finds helpful and relevant to accomplishing the City's economic development objectives. 5. Case-by-Case Evaluation Nothing in these policies, procedures or the application form shall imply or suggest, or be construed to imply or suggest that the City of San Marcos is under any obligation to provide any incentive to any applicant. All applicants for tax phase-ins and/or other economic development incentives shall be considered on an individual case-by-case basis.