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$50,000 to qualify. He noted that only new investment was eligible for tax exemption. He noted that the exemptions would cease if jobs were reduced or the business relocated. Mr. Braud said the City of Eugene would be an Urban Enterprise Zone which would allow for additional criteria for qualification. He said Eugene had one of the most active zones in the State before it had been discontinued. He said 57 companies had participated in Eugene's program. He outlined the progress of Eugene's zone. He noted that it had been a small business developrhent program until the involvement of Hynix. Discussion In response to a question from Mr. Forbes regarding whether there was a limit to the number of business that could qualify, Mr. Braud said there were no limits. In response to a question from Mr. Wanichek regarding whether the additional requirements imposed by the City and the County had always been in place, Mr. Bi'aud noted that the additional requirements only applied to the companies grandfathered into the program after the zone expired. In response to a question from Mr. Goldsmith regarding whether there had been any cost benefit analysis done for the economic development program, Mr. Braud said there had been graduate studies on Hynix in particular and noted that there had been some other studies but noted that Eugene had not commissioned a cost benefit study. Mr. Goldsmith stressed the importance of defining the possible benefits of such a program before implementing it again. Mr. Rexius said the local impact of the previous program had b~en huge. He said his subcommittee had looked at the data with Hynix excluded. He noted that Eugene'S program had the only program in the State with extra requirements besides the City of Portland~ Mr. Rexius said the subcommittee's recommendation was to move forward with an enterprise zone with the State criteria as the only criteria and ifa company elected to apply for the 5 year exemption then to use the State requirements for that as well. Ms. Smith stressed that 86 percent of the companies in the ente?prise zone had been small companies that had used the program to accelerate their success rates. She added that when extra conditions were added it had an adverse affect on the participating businesses. Ms. Edwards, seconded by Ms. Pierce, moved to accept the recommendation of the subcommittee as stated, including the addition of land adjacent to the old zone. In response to a question from Mr. Bowerman regarding wh~ether there had been a study to show how the participating businesses would have progressed without the zone, Mr. Braud said a committee had examined the zone before it expired. He said the tax exemption was only one of the factors in an investment decision. He said there were arguments on both sides but noted that there were at least two companies in Eugene that had recently moved to Springfield specifically because it had an enterprise zone. MINUTES--Mayor's Economic Development Committee May 24, 2004 Page 2