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HomeMy WebLinkAbout4.05 Dick's Sporting Good Tax Reimbor 19 82 /ii � 111 DATE: TO: FROM: SUBJECT STAFF REPORT CITY COUNCIL November 20, 2012 Honorable Mayor and City Councilmembers Joni Pattillo City Manager""' CITY CLERK File #470 -20 Sales Tax Reimbursement Agreement with Dick's Sporting Goods, Inc. Prepared by Hazel L. Wetherford, Economic Development Analyst EXECUTIVE SUMMARY: In January 2009, City Council adopted the Sales Tax Reimbursement Program as one way to stimulate economic investment in Dublin. Representatives of Dick's Sporting Goods requested participation in the Sales Tax Reimbursement Program to offset a portion of $1.75 million in tenant improvements costs for their new store at 2820 Dublin Boulevard. FINANCIAL IMPACT: The proposed agreement is part of a local initiative to encourage economic development and secure new retail businesses in the City. As allowed under the program guidelines, the City would reimburse the developer annually from new tax revenues over a limited 5 year period. The amount of the reimbursement will be based on actual retail sales of the new outlet. The firm is only eligible to receive tax sharing funds in those years that they have at least $10 million in retail sales (which generates at least $100,000 in local sales tax revenue). The maximum sales tax reimbursement over the five year period is $350,000. RECOMMENDATION: Staff recommends that the City Council adopt the proposed Resolution Approving an Agreement for Reimbursement of Sales and Use Tax Revenue with Dick's Sporting Goods, Inc. relating to tenant improvements to be performed on a property located at 2820 Dublin Boulevard at the Fallon Gateway project. f' l ✓l jt� ,y' , �. Submitted By Economic Development Director DESCRIPTION: Background Reviewed By Assistant City Manager Page 1 of 3 ITEM NO. 4.5 At the January 6, 2009 City Council meeting, the City Council approved the Sales Tax Reimbursement Program as the first element of the Economic Incentive Program. The Program was later amended on October 6, 2009 by Resolution 149 -09 and then again on July 17, 2012 by Resolution 135 -12 to meet current economic development needs for the City. The most recent modifications added a new section to the Program giving additional flexibility to the City to consider sales tax reimbursements relating to the cost of certain construction improvements of new buildings and structures. On August 21, 2012, Staff presented a request from Dick's Sporting Goods to the City Council for participation in the City's Sales Tax Reimbursement Program (Attachment 2). The City Council provided Staff direction to work with the representatives from Dick's Sporting Goods on an agreement. Request for Reimbursement Staff has been working with Dick's Sporting Goods on the structure of the proposed agreement for the past few months. During this time, Staff has been able to identify the costs associated with the build out of the building shell located at 2820 Dublin Blvd. which is part of the Fallon Gateway project. Eligible improvement costs include exterior and interior improvements to the building shell. The total tenant improvement valuation is approximately $1.75 million. Of this amount, Dick's Sporting Goods is seeking reimbursement for up to $350,000 of tenant improvement costs. This was the gap amount identified by Dick's representatives as being needed in order to bring the project to Dublin vs. another site in a locality nearby. The proposed Agreement (Exhibit A to Attachment 1) provides Dick's Sporting Goods, Inc. with fifty (50) percent of the City's portion of new sales tax revenue generated at the Dublin site for a period of five (5) years. However, no payments will be made if Dick's Sporting Goods, Inc. does not generate at least $10 million in taxable sales annually, which is equivalent to one hundred thousand dollars ($100,000) of new sales tax revenue to the City in each of those years. The Agreement, as proposed, meets the criteria established in the Sales Tax Reimbursement Program. The Sales Tax Reimbursement Program was designed to ensure that the sales tax reimbursement agreements will benefit the public. In addition to meeting the Program criteria of improving new, existing and vacant buildings in Dublin, there are other financial benefits to the City. First, the City will be receiving a new, ongoing source of sales tax revenue that is likely to exist beyond the time -frame of the proposed agreement. Additionally, the improvements to the property will result in a reassessment of the property's value, increasing the City's property tax revenue. In addition to the tax benefits to the City and its residents, this agreement will also result in improvements to the facade of the property, thus enhancing the appearance and character of the neighborhood, to the benefit of City residents. Finally, Dick's Sporting Goods will generate new jobs in the City and the employees are likely to spend money at other business establishments in the City, thus generating additional sales tax revenue for the City. NOTICING REQUIREMENTS /PUBLIC OUTREACH: None. Page 2 of 3 ATTACHMENTS: 1. Resolution Approving the Sales and Use Tax Reimbursement Agreement 2. Exhibit A to Attachment 1 — Sales and Use Tax Reimbursement Agreement 3. August 21, 2012 Staff Report (Request for Participation in the Sales Tax Reimbursement Program) Page 3 of 3 RESOLUTION NO. -12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING AN AGREEMENT FOR REIMBURSEMENT OF SALES AND USE TAX REVENUE WITH DICK'S SPORTING GOODS, INC. RELATING TO IMPROVEMENTS TO BE PERFORMED ON A PROPERTY LOCATED AT 2820 DUBLIN BOULEVARD WHEREAS, for decades, state and local governments have used economic development incentives to attract or retain jobs and /or improve the local tax base; and WHEREAS, the City Council of the City of Dublin adopted Resolution No. 9 -09 on January 6, 2009, which Resolution established a Sales Tax Reimbursement Program ( "Program ") intended to attract new businesses to the City; and WHEREAS, the City Council adopted Resolution No. 149 -09 on October 6, 2009, revising and restating the Program to permit the option of a ten (10) year reimbursement period for participants that generate $500,000 in sales tax revenue for the City each year and established a termination date for the Program of January 5, 2011; and WHEREAS, the City Council adopted Resolution No. 172 -10 on December 7, 2010, which Resolution provided that the Program shall terminate on January 9, 2013; and WHEREAS, the City Council adopted Resolution No. 135 -12 on July 17, 2012, revising and restating the Program to include improvement costs made by businesses that are constructing new structures on undeveloped property sites or that may be tenants in such new structures and also extended the termination date until January 5, 2015; and WHEREAS, the Program authorizes the City of Dublin to enter into agreements with businesses in certain circumstances, wherein the City agrees to reimburse the business for the actual costs of certain pre- approved improvements to business properties. The reimbursement is made in annual payments over five years or until the business has recouped its actual expenses for the improvements, whichever comes first. The annual payment is capped at fifty percent (50 %) of the sales and use tax revenue (hereafter "sales tax ") generated by the business in the preceding year; and WHEREAS, provided certain circumstances are met, the Program allows Tenants to recover, over time, a portion of the costs of interior, exterior and site improvements made to their property through a partial reimbursement from the City of sales tax generated from the property; and WHEREAS, Tenant leases certain real property located at 2820 Dublin Boulevard (APN: 985 - 00027 - 009 -003), ( "the Property "), located in the City; and WHEREAS, the space to be occupied by Tenant has a total area of fifty -five thousand (55,000) square feet or less, and Tenant has furnished the City with documentation establishing that Tenant is expected to have at least ten million dollars ($10,000,000) in annual retail sales transactions attributable to operations conducted at the Property, which would result in at least one hundred thousand dollars ($100,000) of sales tax for the City each year; and WHEREAS, Tenant intends to improve one building it will be using for its operations. These improvements include exterior and facade improvements; interior construction of offices, break room, bathrooms; interior and exterior lighting; HVAC and plumbing systems; flooring; new wall finishes; and acoustic ceilings; and WHEREAS, the City Council finds that it is in the public interest to enter into this agreement because the City and its residents will benefit from increased revenue received from both sales tax revenue that it may not otherwise receive, and from the increase in the property taxes owed by the Owner due to increased value of the property from the improvements; and WHEREAS, the City Council further finds that it is in the public interest to enter into this agreement because the City and its residents will benefit from the aesthetic improvements to the neighborhood that will occur due to the exterior improvements to be made to the structure; and WHEREAS, the City Council further finds that the City and its residents may also benefit from the creation of new jobs in the City that will occur when the Tenant establishes its business here. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin approves the Sales Tax Reimbursement Agreement (attached as Exhibit A and titled "Agreement for Reimbursement of Sales and Use Tax Revenue between the City of Dublin and Dick's Sporting Goods, Inc. "). BE IT FURTHER RESOLVED that the City Manager is authorized to execute the Agreement substantially in the form attached hereto and to undertake such further action as may be necessary and desirable to carry out the intent of this resolution. 2001958.1 PASSED, APPROVED AND ADOPTED this 20th day of November, 2012, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: City Clerk Mayor AGREEMENT FOR REIMBURSEMENT OF SALES AND USE TAX REVENUE BETWEEN THE CITY OF DUBLIN AND DICK'S SPORTING GOODS, INC. THIS AGREEMENT is made and entered into this _ day of November, 2012, by and between the City of Dublin ( "City "), a municipal corporation, and Dick's Sporting Goods, Inc., a Delaware corporation, as tenant ( "Tenant "), collectively referred to as "the Parties." RECITALS WHEREAS, the City Council of the City of Dublin adopted Resolution No. 9 -09 on January 6, 2009, which Resolution established a Sales Tax Reimbursement Program ( "Program ") for a period of two years; and WHEREAS, the City Council adopted Resolution No. 149 -09 on October 6, 2009, revising and restating the Program to permit the option of a ten (10) year reimbursement period for participants that generate $500,000 in sales tax revenue for the City each year and established a termination date for the Program of January 5, 2011; and WHEREAS, the City Council adopted Resolution No. 172 -10 on December 7, 2010, which Resolution provided that the Program shall terminate on January 9, 2013; and WHEREAS, the City Council adopted Resolution No. 135 -12 on July 17, 2012, revising and restating the Program to include improvement costs made by businesses that are constructing new structures on undeveloped property sites or that may be tenants in such new structures; and WHEREAS, the Program authorizes the City of Dublin to enter into agreements with businesses in certain circumstances, wherein the City agrees to reimburse the business for the actual costs of certain pre - approved improvements to business properties. The reimbursement is made in annual payments over five years or until the business has recouped its actual expenses for the improvements, whichever comes first. The annual payment is capped at fifty percent (50 %) of the sales and use tax revenue (hereafter "sales tax ") generated by the business in the preceding year; and WHEREAS, provided certain circumstances are met, the Program allows Tenants to recover, over time, a portion of the costs of interior, exterior and site improvements made to their property through a partial reimbursement from the City of sales tax generated from the property; and WHEREAS, Tenant leases certain real property located at 2820 Dublin Boulevard (APN: 985- 00027- 009 -003), ( "the Property "), located in the City; and WHEREAS, the space to be occupied by Tenant has a total area of fifty -five thousand (55,000) square feet or less, and Tenant has furnished the City with documentation establishing that Tenant is expected to have at least ten million dollars ($10,000,000) in annual retail sales transactions attributable to operations conducted at the Property, which would result in at least one hundred thousand dollars ($100,000) of sales tax for the City each year; and WHEREAS, Tenant intends to improve one building it will be using for its operations. These improvements are: interior construction of , offices, break room and bathrooms, exterior and fagade improvements, HVAC and plumbing systems, flooring, new wall finishes, and acoustic ceilings. AGREEMENT NOW, THEREFORE, for and in consideration of the mutual advantages to be derived therefrom, and in consideration of the mutual covenants herein contained, it is agreed by and between the Parties hereto as follows: DEFINITIONS 1.1 "Eligible Compensation Amount' means three hundred fifty thousand dollars ($350,000). 1.2 "Exterior Improvements" means all improvements made to the exterior of the physical structure of the building identified in Exhibit A of this Agreement. 1.3 "Improvements" means all Exterior Improvements and Interior Improvements identified in Exhibit A. 1.4 "Interior Improvements" means all improvements made to the interior space to be occupied by the Tenant and identified in Exhibit A of this Agreement. 1.5 "Maximum Compensation Amount' means Tenant's actual costs for construction of the Improvements, as shown in the written Notice of Maximum Amount provided to Tenant by City pursuant to Section 3.2 of this Agreement. 2. TENANT'S DUTIES UNDER THIS AGREEMENT 2.1 Tenant wishes to perform certain Improvements substantially as described in Exhibit A of this Agreement. 2.2 Prior to commencement of construction of the Improvements or any portion thereof, Tenant shall submit to City all plans, specifications and cost estimates for the Improvements for City review and approval. Nothing in this Agreement shall affect the need for Tenant to obtain any approvals from the City for the Improvements as required by any City rules, regulations, ordinances or resolutions. 2.3 Following City approval of the plans, specifications and cost estimates pursuant to Section 3.1, and in the event that Tenant desires to modify the specifications for any of the Improvements or if change orders are required, Tenant shall submit the modifications, change orders and any revisions to the originally approved cost estimates to City for approval. Failure to do so shall relieve the City of any obligation to pay for any Improvements not constructed as originally approved. 2.4 Tenant shall provide the City with all bills and evidence of payment for the Improvements, in a form acceptable to City within thirty (30) days of Tenant's final payment for the Improvements. A form acceptable to the City could include a summary of the original estimate and final amount paid to each vendor. This summary would also require copies of receipts and paid invoices as an attachment to the summary. 2.5 The actual cost of the Improvements paid by Tenant, as indicated by City in the written Notice of Maximum Amount provided to Tenant by City pursuant to Section 3.2 of this Agreement shall constitute the Maximum Compensation Amount. In no event shall said Maximum Compensation Amount exceed the Eligible Compensation Amount of three hundred fifty thousand dollars ($350,000). 2.6 A representative of the City shall have the right, at the City's sole discretion, to inspect all Improvement work performed to ensure that said work was performed substantially as approved by the City pursuant to Section 3.1 of this Agreement. This right of inspection shall be in addition to any inspection performed by City staff as required or permitted by any other City rules, regulations, ordinances or resolutions. 2.7 Tenant shall file with the State Board of Equalization a separate sales tax return encompassing sales tax data relating to sales made at the Property only, regardless of any other sales activity conducted at other locations within the City. Beginning with the first full quarter in which Tenant pays sales taxes on its operations at the Property, and for every subsequent quarter, Tenant shall provide City with copies of all sales tax returns filed with the State Board of Equalization for a period of five (5) years. For example, if Tenant begins operations in February of a given year, the first sales tax return submitted to the City shall be for the period from April through June of that year. Tenant shall provide City with quarterly returns within thirty (30) days of submitting each return to the Board of Equalization. Said submission of quarterly sales tax returns shall end when City has made its final payment to Tenant pursuant to this Agreement. 2.8 Tenant shall provide City with a total of twenty (20) consecutive quarterly returns, covering sales taxes paid over a total of five (5) consecutive twelve month periods. Each such twelve month period constitute a Reporting Year. Thus, if the first sales tax return submitted pursuant to Section 2.7 encompasses the period from April through June of a given year, the first Reporting Year shall run from April of that year through March of the following year, after which the second Reporting Year shall commence.. In the event that Tenant has been fully reimbursed the Maximum Compensation Amount, Tenant shall not be obligated to provide additional quarterly returns pursuant to this Section. 2.9 In the event that Tenant learns or is notified that the sales taxes it has paid were incorrectly allocated between City and any other taxing entity for any quarter for which Tenant has provided City with sales information pursuant to Section 2.7 of this Agreement, Tenant shall promptly notify City of the error within thirty (30) days of such notification. 2.10 In the event that City determines, pursuant to Section 3.9 of this Agreement, that it overpaid Tenant due to a miscalculation or misallocation of sales tax payments, and if City is not obligated to make any additional payments to Tenant pursuant to this Agreement, Tenant shall pay to City the amount City overpaid within thirty (30) days of notification by City of the overpayment. 2.11 Tenant hereby acknowledges and agrees that the City may, as required by law, disclose to third parties confidential information contained in or derived from the sales tax returns submitted to City pursuant to Section 2.7 of this Agreement. Such information includes, but is not limited to, the amount of any payments made to Tenant pursuant to Section 3.3 of this Agreement. CITY'S DUTIES UNDER THIS AGREEMENT 3.1 Upon receipt of the plans, specifications and cost estimates, for the Improvements pursuant to Section 2.2 of this Agreement, or upon submission of revised specifications for any of the Improvements, change orders or any revisions to the originally approved cost estimates pursuant to Section 2.3, City shall review said materials to determine the extent to which they represent work that is consistent with the intent of the Program. City shall inform Tenant in writing either that the proposed Improvements have been approved, or that they have been approved with exceptions, which exceptions shall also be in writing. 3.2 Upon receipt of evidence of payment for the Improvements pursuant to Section 2.4 of this Agreement, City shall provide Tenant with a written Notice of Maximum Amount that may be paid to Tenant under this Agreement, which amount shall reflect Tenant's actual costs for the Improvements, and which shall not exceed the Eligible Compensation Amount of three hundred fifty thousand dollars ($350,000). 3.3 City shall verify the accuracy of all sales tax returns submitted to City pursuant to Section 2.7 of this Agreement. Within one hundred twenty (120) days after receipt of the final sales tax return of each Reporting Year, as that term is defined in Section 2.8 of this Agreement, the City shall pay Tenant an amount equal to fifty percent (50 1/o) of the sales tax paid by Tenant in the preceding Reporting Year, subject to the provisions of Sections 3.4, 3.5, 3.6, 3.7 and 3.8 of this Agreement. In no event shall the City's payment to Tenant for any one Reporting Year exceed one hundred seventy -five thousand dollars ($175,000). 3.4 Should Tenant fail to timely submit its sales tax returns to City, City shall be under no obligation to make any payment to Tenant for that year. 3.5 In no event shall City make any payment to Tenant for any Reporting Year in which the total sales tax paid by Tenant relating to sales on the Property is less than one hundred thousand dollars ($100,000). 3.6 At no time shall the cumulative amount of City's payments be more than the Maximum Compensation Amount that may be paid to Tenant determined pursuant to Section 3.2 of this Agreement. 3.7 In no event shall City be obligated to pay Tenant based on sales tax generated more than five (5) years after the first quarter Tenant submits its sales tax return pursuant to Section 2.7 of this Agreement. 3.8 In the event that Tenant vacates the Property or ceases to conduct business at the Property before submitting sales tax returns encompassing five (5) consecutive years, City's obligation to pay Tenant shall be based only on the amount of sales tax generated by Tenant while occupying the Property. 3.9 If, pursuant to Section 2.9 of this Agreement, Tenant informs City that its sales tax payments were incorrectly allocated to the City, or if the City otherwise learns that Tenant's sales tax payments were incorrectly allocated to the City, and if the result of the incorrect allocation is that City paid Tenant more or less than it would have been required to pay pursuant to Section 3.3 of this Agreement, City shall determine the amount of overpayment or underpayment. If the City is obligated to make any subsequent annual payment to Tenant pursuant to this Agreement, City shall adjust the subsequent payment to reflect any overpayment or underpayment it may have made for the period in question. If City is not obligated to make any additional payments to Tenant pursuant to this Agreement, but has determined that it underpaid Tenant, City shall pay Tenant the amount it underpaid, provided that the sum total of payments to Tenant do not then exceed the Maximum Compensation Amount. This payment shall be made within thirty (30) of City's discovery of the amount of the underpayment. If City is not obligated to make any additional payments to Tenant pursuant to this Agreement, but has determined that it overpaid Tenant, Tenant shall pay City the amount City overpaid in compliance with Section 2.10 of this Agreement. 4. INDEMNIFICATION Tenant shall defend City, its officers, employees and officials, against any claims or actions (including declaratory or injunctive relief) concerning Tenant's construction of the Improvements, including any Right -of -Way Improvements, and shall indemnify and hold City harmless from any damages, charges, fees or penalties that may be awarded or imposed against City and /or Tenant in connection with, or on account of, Tenant's construction of the Improvements, including any Right -of -Way Improvements, and /or City's failure to enforce or comply with any applicable laws, including but not limited to the requirements of the California Labor Code, Section 1771, et seq. Tenant shall be in compliance with this Section 5 if it causes a third party to defend, indemnify and hold City harmless in the manner required of Tenant, provided, however, that in the event any said third party fails to satisfy these obligations, Tenant shall remain liable for their performance. 5. AMENDMENTS TO AGREEMENT No part of this Agreement shall be altered or amended without written agreement of the signatory Parties. 6. ASSIGNMENT The rights and obligations of the Parties under this agreement are not assignable and shall not be delegated without the prior written approval of the other Party. 7. EXHIBITS The following Exhibit is attached hereto and incorporated as if fully set forth herein: Exhibit A: Description of Improvements. IN WITNESS WHEREOF, the Parties execute this agreement hereto on the day and the year first written above. APPROVED AS TO FORM AND CONTENT: an John D. Bakker, City Attorney, City of Dublin ADOPTED BY: CITY OF DUBLIN, a Municipal Corporation L-3 Joni Pattillo, City Manager Cm - I Dick's Sporting Goods, Inc., 7 elaware Corporation By: Its: Vf— -fAX Date: 1116119- 1991090.2 IRWIT-11m EXHIBIT A Description of Improvements The Eligible Contribution Amount under this Agreement is $350,000. This amount is less than planned improvement costs, which Staff has reviewed and validated a letter submitted by the property owner, Charter Properties, dated October 8, 2012. The documentation separates the valuations for the shell and tenant improvements for the proposed Dick's Sporting Goods retail store. Based on this letter, which was reviewed and considered to be valid by the City's Senior Chief Building Official, the tenant improvement valuation /cost is $1,755,143 ($31.91 per square foot). If the tenant improvement/validation cost is factored over the 10 -year lease agreement, leasehold improvement costs are estimated at $175,000 annually. Because these improvements are being paid by the tenant through their lease with the property owner. The annual amount eligible for reimbursement will be spread over the term of this Agreement (5 years). The annual amount eligible for reimbursement may not exceed $175,000 and is subject to cumulative payments under this agreement of no more than $350,000. The eligible tenant improvements are: • Exterior and fagade improvements • Interior construction of offices, break room, bathrooms • HVAC and Plumbing systems • Flooring • New wall finishes • Acoustic ceilings or 19 82 /ii � 111 DATE: TO: FROM: STAFF REPORT CITY COUNCIL August 21, 2012 Honorable Mayor and City Councilmembers Joni Pattillo City Manager""' CITY CLERK File #470 -50 SUBJECT: Request for Participation in the Sales Tax Reimbursement Program Prepared by Linda Smith, Economic Development Director and Public Information Officer EXECUTIVE SUMMARY: The City received a request from Dick's Sporting Goods to participate in the City's Sales Tax Reimbursement Program. Dick's Sporting Goods is looking to occupy a 55,000 sq. ft. building at Fallon Gateway (located on the southwest corner of Dublin Blvd. and Fallon Rd.), and would propose to use the assistance to offset the costs for the construction of improvements in the new retail store. FINANCIAL IMPACT: If the City Council provides direction to Staff to proceed, there could be legal fees associated with the review of the agreement for sales tax reimbursement. RECOMMENDATION: Staff recommends that the City Council provide direction regarding the request for participation in the Program. f' l ✓l jt� ,y' , �. Submitted By Economic Development Director DESCRIPTION: Reviewed By Assistant City Manager On January 6, 2009, the City Council adopted Resolution 09 -09 approving the Sales Tax Reimbursement Program. The Program was later amended on October 6, 2009 by Resolution 149 -09 and then again on July 17, 2012 by Resolution 135 -12 to meet the current economic development needs for the City. The July 17, 2012 modifications added a new section to provide Staff with the flexibility to consider extending some form of sales tax reimbursement relief for improvements related to the construction of new buildings and structures. The Sales Tax Reimbursement Program assists developers, property owners and /or business owners to help offset costs associated with improvements to the property or improvements Page 1 of 2 ITEM NO. 8.5 relating to construction of new buildings and structures. For businesses generating $100,000 or more in new sales tax revenue to the City annually, the Program allows a reimbursement for the improvement costs of up to 50 percent of that annual revenue. This amount is payable for up to five years but for no more than the amount of the eligible improvement costs. For a business generating $500,000 in new sales tax revenue to the City annually, the Program allows reimbursement for the improvement costs of up to 50 percent of that annual revenue for a period of 10 years. Table 1 provides an example of the Program's financial structure. Table 1 Tenant A Expected Annual Sales Tax Generation $100,000 Eligible Improvement Costs $250,000 Expected Reimbursements (50% for 5 years - $50,000 /year x 5 years = $250,000) — not to exceed Eligible Improvement Costs $250,000 Tenant B Expected Annual Sales Tax Generation $500,000 Eligible Improvement Costs $1,000,000 Expected Reimbursements (50% for 10 years - $250,000 x 5 = $1,250,000) — not to exceed Eligible Improvement Costs $1,000,000 The City received a request to participate in the Program from Dick's Sporting Goods (Attachment 1), who is looking to occupy a yet -to -be constructed 55,000 sq. ft. building at Fallon Gateway (located on the southwest corner of Dublin Blvd. and Fallon Rd.). The City Council is being asked to consider this request to provide financial assistance to help with the cost of constructing tenant improvements in this new retail location. Staff presented this request to the Standing Economic Development Committee on July 27, 2012. This request falls under the Committee's purview to provide direction on economic development activities. The Committee is requesting that the full City Council consider the request. Staff is seeking City Council direction at this time before investing a significant amount of Staff time and associated legal fees in drafting the necessary agreement. If the City Council desires, Staff will work with the applicant to draft the necessary agreements, and will bring back the agreement for City Council action at a future date. NOTICING REQUIREMENTS /PUBLIC OUTREACH: None. ATTACHMENTS: 1. Request letter from Dick's Sporting Goods Page 2 of 2 345 Court Street • Coraopolis, PA 15108 www.DicksSportingGoods.com Main Phone: 724 - 273 -3400 May 15, 2012 Ms. Linda Smith Economic Development Director City of Dublin 100 Civic Plaza Dublin, California 94568 RE: Economic Incentives Priority in Site Decision Dear Ms. Smith: As discussed, Dick's Sporting Goods would like to locate a new retail location in the City of Dublin and in support of that project we have requested to participate in the City's Sales Tax Reimbursement Program. Dick's initially approved this investment based on feedback from the City's Economic Development Board that we would be eligible for this benefit, which helps us to justify the significant capital investment to develop the location that would be difficult for our Company without the incentive. We understand the policy is under review by the City and would like to express the critical importance of this benefit to attracting new development in today's tough economic climate, particularly considering the associated development fees. Please contact me at (724) 273 -3180 or Elaine Marr with CBRE at (858) 750 -2264 and let us know if information would be helpful to the City Council in considering this issue. We appreciate your consideration. Sincerely, Todd Hipwell Vice President - Tax