HomeMy WebLinkAbout8.1 Incentive Program
CITY CLERK
File # D[g]EI][Q]-[5]C
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: November 16, 2004
SUBJECT:
Consideration of Business Incentive Program
Report Prepared by: Christopher L. Foss
Economic Development Director
ATTACHMENTS:
None.
RECOMMENDATION:
That the City Council detennine:
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1. The purpose that the Business Incentive Program should serve;
2. The area or sites that should be considered for a business
incentive;
3. The criteria which should be used to detennine whether a
business/property should qualify for a business incentive;
4. Does a Downtown Traffic Offset Fee program accomplish the
goal of the City Council or should the Staff investigate a
different type of incentive?
Once the City Council has provided direction on the issues identified
above, Staffwill report back to the City Council with a more refined
program.
FINANCIAL STATEMENT:
None at this time.
DESCRIPTION: During the February 4,2003 discussion of the alternatives for future
development of the vacant gas station site at 7197 Village Parkway, the City Council directed Staff to
return with a program to assist development in the City's Central Business District. With this report,
Staff would like to receive City Council input and direction with regards to the potential elements
(Program Goals, Areas of Interest, Program Tools, and Funding Source(s)) of a Business Incentive
Program.
BACKGROUND: For the past several years, the City Council has concentrated on the
revitalization of the City's Central Business District (Downtown). These efforts have manifested
themselves in the fonn of several infrastructure projects, such as new landscaping and street furniture,
new streetlights, and proposed improvements on Village Parkway_ The City has also added several art
projects to improve the aesthetic appearance of the Downtown, such as the Underpass Art projects on
Dublin Boulevard and Amador Valley Boulevard, as well as the new Bus Shelters on Dublin Boulevard.
In addition to the physical improvements, the City also adopted three Specific Plans in 2000 (West Dublin
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BART, Downtown, and Village Parkway), which will help shape and guide development for the next
several years.
Due in part to the City's efforts as outlined above, there are several development projects either approved
or pending in the City's Central Business District. The approved projects include:
Enea Properties Company: Enea Properties has been approved to build an 8,550 s.f. retail center
and 5,500 s.f. office complex at the southeast corner of Village Parkway and Amador Valley Boulevard.
It is anticipated that the project could begin construction by the end of 2004.
AMB/Legacv: The City Council has approved a mixed-use project on the site of the existing Cor-
0- Van property that will encompass, at build out, 308 residential units and 150,000 s.f. of office building.
West Dublin BART (Ampelon Development): The City Council has approved a Stage 1 Planned
Development (PD) and a West Dublin BART Specific Plan Amendment (SPA) on the 9-acre BART site
at the southwest corner of Golden Gate Drive and St. Patrick Way. The Stage 1 PD calls for a 21O-room
apartment complex, 1 50-room hotel, and 7,500 square feet of retail space.
McDonalds: The operators of the McDonald's restaurant at the northwest corner of Dublin
Boulevard and Village Parkway have received approvals to put a new, updated façade package on the
store. Staff anticipates that this project will be underway in 2005.
Valley Center: This project included a complete façade upgrade of the existing commercial
center as well as the construction of a new 2-story, 8,000 s.f. commercial building at the northwest corner
of Village Parkway and Amador Valley Boulevard.
There are also several projects that are pending approvals:
Shamrock Village: Staffis working with the owners (Doerken Properties) on a proposed façade
improvement to the property as well as the addition of approximately 2,800 s.f. of retail to the center.
See's Candy: Staffis awaiting an application from See's Candy for the development of
the vacant parcel near the northeast corner of Dublin Boulevard and San Ramon Road. The development
is pending while the Historic District Design Guidelines are being drafted.
Dublin Place Shopping Center: Staff is awaiting an application from Bassett Furniture to
upgrade the fonner Montgomery Wards Auto Center.
Fandangos: Staffis working with the property owner on the renovation ofthe existing 1,200 s.f.
former Fandango's building adjacent to the Valley Center on Amador Valley Boulevard.
PROPOSED PROGRAM:
The City Council has identified the creation of a Business Incentive Program as a high priority goal for FY
2004-05 (Goal No. II-E-5). Staff researched programs throughout California and found several cities
that use different mechanisms to support development such as fee waivers, commercial rehabilitation
loans, tax-sharing agreements, façade improvement program, and redevelopment, to name a few. The
most common of these programs appear to be Façade hnprovement and Commercial Rehabilitation Loan
programs. The Façade hnprovement Program is designed to stimulate efforts to improve the street
appearance of commercial buildings, and is often designed for a specific area or areas of a community. A
Façade hnprovement (or Storefront hnprovernent) program can allow for many types of improvements,
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including general improvements such as new signage, modification of windows/doors/storefronts,
installation of awnings, painting and decorative treatments, new lighting and minor landscaping.
The Commercial Rehabilitation Loans' primary purpose is to leverage public and private investment to
encourage substantial investment in commercial buildings and upgrade the physical and economic vitality
of the community. Some of the eligible activities often found in a Commercial Rehabilitation Loan
program include architects costs, new signage/lighting, utility upgrades, parking lots resurfacing, façade
improvements, etc. These types of loans are, and are most often secured by a deed of trust on the
property. The loans also require a certain level of matching private financing. The amounts of the loans
available through these programs vary considerably, depending on the community.
The above-mentioned programs are generally funded by either Redevelopment Agency funding or through
Community Development Block Grant (CDBG) funds for areas in cities that meet the CDBG
requirements. The City of Dublin is provided CDBG funds for area-wide projects. In order for a project
to qualify for the funds, it would need to be in a census tract in which 50% or more of the population is at
the low or very low-income level (80% or less of Alameda County's median income). There are no such
qualifying tracts in the City of Dublin, so CDBG funds could not be used.
Since the City of Dublin does not have the ability to support development through the use of
redevelopment, Staff has been working on the establishment of a Traffic Fee Offset Program as a business
incentive. Since incorporation, all non-eastern Dublin development has paid for its share of impacts on
local roads on a project-by-project basis by payment of the Voluntary Traffic Mitigation Contribution
(VTMC), based on a CEQA traffic impact review for each particular development. The City has utilized
the VTMC program as means to fund roadway and other improvements needed to accommodate
anticipated traffic increases due to growth in the downtown area. The VMTC has been applied to new
development in all areas west of Dougherty Road and the Iron Horse Trail. On October 19,2004, the City
Council adopted a Downtown Traffic hnpact Fee of $ 136 per trip, which replaced the VTMC program.
A Traffic Fee Offset Program could be established to induce quality private development where a
Downtown Traffic hnpact Fee (TIP) would be required. These requirements, which are designed to
mitigate a project's impacts on the circulation system, would not be eliminated; rather, the City would
contribute General Fund monies to the Downtown TIP program that the developer would otherwise have
been required to make. For example, the program could allow an applicant to apply for an off-set of up
to 100% of the Downtown TIP, not to exceed $50,000 for each project. If the applicant's request were
granted, the City's General Fund would pay the selected developer's contribution toward any street
improvements. The Traffic Fee Offset Program could be available to applicants provided that the City
Council has allocated funds to the program each year in the Capital hnprovement Program.
CITY COUNCIL DIRECTION:
Despite the creation of the conceptual Traffic Fee Offset Program, Staff would like to receive City
Council confirmation that the program is consistent with the City Council's goals and intent of such a
program. For that reason, Staff would propose that the City Council provide direction on the following
items: Business Incentive Program Purpose, Program Location(s), and Program Qualification Criteria.
Program Purpose:
Staff has identified several potential purposes for the program:
.:. Stimulate undeveloped or underdeveloped properties
.:. Job creation
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.:. Increased Revenues (property tax and sales tax)
.:. Aesthetic hnprovements
Staff would request City Council direction relative to the purpose(s) of any Business Incentive Program.
Program Location(s):
Staff would request City Council direction relative to the areas of focus for a potential Business Incentive
Program. The City Council could focus on:
.:. The City's Central Business District, an area generally described as follows: the east side of
Village Parkway to the east, the north side of Amador Valley Boulevard to the north, Interstate 580
to the south, and the west side of San Ramon Road to the west. The boundaries of the City's
Central Business District involve the Downtown, West Dublin BART, Village Parkway, and San
Ramon Specific Plan Areas.
.:. Specific areas such as Village Parkway, Regional Street, West Dublin BART area or Amador
Plaza Road.
.:. Specific properties such as Shamrock Village, Dublin Place Shopping Center, West Dublin BART
area, etc.
Proe:ram Avvlication Criteria:
Staff would request City Council direction relative to program criteria. Staff has identified the following
public benefit criteria that could be applied to any proposed project requesting consideration by the
program:
1. The project will serve as a catalyst for revitalization of the area, as the proposed
project must have substantial private investment and make a significant impact on the
business environment. The project should bring a positive aesthetic improvement and
increase the economic vitality of the area, and
2. The project will result in at least one of the following benefits:
a. A significant increase (50% or more) in assessed value;
b. Creation of a minimum of twenty (20) full-time (or full-time equivalent)
jobs in Dublin.
SOURCES OF FUNDING
The City Council would have to set funds aside from the City's General Fund for the program.
The City Attorney has indicated if the projects meet the foregoing criteria, funding programs such as the
Traffic Fee Offset Program would not be considered gifts of public funds under California's Constitution
because the City's contribution would serve a public purpose. Several cases have upheld programs
designed to encourage economic development although the programs benefited individuals. For instance,
during the Great Depression, a number of cases held that statutes designed to remedy property
overburdened with taxes and assessments did not violate the prohibition against gifts of public funds. The
asserted public purpose of these expenditures was to return the properties to the tax rolls. (See City oj
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Ojai v. Chaffee (1943) 60 Cal.App.2d 54.) Similar to these examples, the BIZ Program's expenditures
could serve the public purposes of returning the undeveloped or underdeveloped commercial sites to
vibrant commercial use (thereby generating additional property and sales tax revenues) and of eliminating
deleterious effects vacant, underdeveloped and undeveloped commercial property has on adjoining
commercial properties (thereby revitalizing the commercial districts surrounding them).
RECOMMENDATION
It is recommended that the City Council determine:
1) The purpose that the Business Incentive Program should serve;
2) The area or sites that should be considered for a business incentive;
3) The criteria which should be used to detennine whether a business/property should qualify for a
business incentive;
4) Does a Downtown Traffic Offset Fee program accomplish the goal ofthe City Council or should
the Staff investigate a different type of incentive?
Once the City Council has provided direction on the issues identified above, Staff will report back to the
City Council with a more refined program.
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