HomeMy WebLinkAboutItem 8.1 Sales Tax Reimb Regency Ctrsor
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DATE:
TO:
FROM:
STAFF REPORT
CITY COUNCIL
June 18, 2013
Honorable Mayor and City Councilmembers
Joni Pattillo City Manager""'
CITY CLERK
File #470 -50
SUBJECT: Request by Regency Centers to Participate 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 Regency Centers to participate in the City's Sales Tax
Reimbursement Program. Regency Centers is in contract to purchase a 14 -acre site from the
Alameda County Surplus Property Authority at the southwest corner of Hacienda Drive and
Dublin Blvd. for the development of a commercial retail center. Staff requests that the City
Council provide direction on the request from Regency Centers.
FINANCIAL IMPACT:
If the City Council provides direction to Staff to proceed, there could be legal fees associated
with the review of the Sales Tax Reimbursement Agreement. Costs will be billed to the
developer's deposit account with the City.
RECOMMENDATION:
Staff recommends that the City Council provide direction regarding the request for participation
in the City's Sales Tax Reimbursement Program.
Submitted By
Economic Development Director
Public Information Officer
DESCRIPTION:
�?14
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
Page 1 of 2 ITEM NO. 8.1
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.
In summary, 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 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.
The City received a request to participate in the Program from Regency Centers (Attachment 1),
a real estate development company in contract to purchase a 14 -acre site from the Alameda
County Surplus Property Authority at the southwest corner of Hacienda Drive and Dublin Blvd.
for the development of a commercial retail center. The City Council is being asked to consider
this request to provide financial assistance to help offset the construction costs associated with
the project. Regency estimates that their current shortfall to build a successful and thriving
center is approximately $3.15 million. Under the City's Program, Regency would be eligible to
participate in a 10 -year reimbursement period, as taxable sales generated at the site are
estimated to be in excess of $50 million annually.
Staff presented this request to the Standing Economic Development Committee on May 17,
2013 and the Committee expressed support of the request and directed Staff to bring this
forward to the entire City Council for consideration. This request falls under the Committee's
purview to provide policy and guidance direction on economic development activities.
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. Letter by Regency Centers Requesting Participation
Page 2 of 2
2999 Oak Road 11 925 279 1.800
SuJte 1.000 F 925 935 5902
Walnut Creek, (.A. 94597 RegencyCenteirs.coiin
leg ency�
Centel:iirs.
Ms. Linda Smith
City
• Dublin
100 Civic Plaza
Dublin, CA 94568
1OV-SAWM• I PT49 =0 I
We would like to express the critical importance of this benefit to us in this economic climate,
particularly considering the associated traffic impact fees and development fees.
Si C "'etq)I)'I
Pete Knoedler
Regency Centers