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HomeMy WebLinkAbout6.2 - 2983 Bicentennial Square Partners Sales Tax Reim Page 1 of 4 STAFF REPORT CITY COUNCIL DATE: December 3, 2019 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager SUBJECT: Agreement for Reimbursement of Sales and Use Tax Revenue Between the City of Dublin and Bicentennial Square Partners Prepared by: Suzanne Iarla, Management Analyst II EXECUTIVE SUMMARY: The City Council will conduct the public hearing, deliberate, and consider approving an Agreement for Reimbursement of Sales and Use Tax Revenue Between the City of Dublin and Bicentennial Square Partners related to certain site improvements to be performed on the property located at 11505 Dublin Boulevard , for the business retention of Graybar Electric Company. The proposed agreement provides a reimbursement of no more than $800,000 for a 10-year period. STAFF RECOMMENDATION: Conduct the public hearing, deliberate, and adopt the Resolution Approving an Agreement for Reimbursement of Sales and Use Tax Revenue Between the City of Dublin and Bicentennial Square Partners. FINANCIAL IMPACT: The proposed agreement provides the opportunity for Bicentennial Square Partners to be reimbursed up to $800,000 over a 10-year period for certain improvements made to the property from increased sales tax revenue generated at the property as outlined in the Agreement. Reimbursement funding and offsetting revenue will be incorporated into the budget process. DESCRIPTION: The City’s Economic Development staff work diligently to not only bring in new businesses but to retain and expand existing businesses. These efforts are evidenced in the City’s robust business visitation program and through the City’s ongoing communication efforts with businesses and property owners. It is through these efforts that the City can better understand and anticipate future needs. Business retention efforts can, at times, result in the offering of financial incentives. Financial incentives can be used to: Page 2 of 4 encourage economic vitality; retain and expand jobs; maintain a local business; and incentivize a business to complete certain upgrades and improvements. These financial incentives result in the retention of City revenue and maintaining these revenues is important to achieving community wide benefits, like providing the public with municipal services. One mechanism for business retention through financial incentives is the City’s Sales Tax Reimbursement Program. The Program was created by the City Council on January 6, 2009 by Resolution 09-09 and has since been amended four times to m eet the current economic development needs for the City: Resolution 149 -09 (October 6, 2009), Resolution 172-10 (December 7, 2010), Resolution 135-12 (July 17, 2012) and Resolution 217-14 (December 16, 2014). The Sales Tax Reimbursement Program is designed to encourage economic investment in the City of Dublin and assist developers, property owners and/or business owners by offsetting a portion of the costs associated with improvements to the property or construction of new buildings and structures. Request from Bicentennial Square Partners In late 2018, Staff was contacted by Kevin Ring of Bicentennial Square Partners seeking support to help retain Graybar Electric Company, the tenant at 11505 Dublin Boulevard. Specifically, Mr. Ring requested to participate in the City’s Sales Tax Reimbursement Program. Graybar is a wholesale distribution business for electrical, communications, and data networking products and related services, that provides 118 full-time jobs and that has consistently been among the City’s top 25 sales tax revenue generators in recent years. Graybar has been in Dublin for about 10 years and if Graybar were to leave Dublin, there would be a negative fiscal impact to the City. Staff presented this request to the Economic Development Committee on June 4, 2019. The Committee was in full support of the request and recommended that Staff bring the item before the City Council for consideration. This recommendation falls under the Committee's purview to provide policy guidance and direction on economic development activities. Over the last several months, City staff has been working closely with Bicentennial Square Partners and the City Attorney’s Office on a proposed agreement. The Agreement (Attachment 2) would allow the City to reimburse a portion of net new sales tax revenue generated by Graybar with Bicentennial Square Partners for a portion of the actual costs of certain improvements undertaken for the benefit of the Tenant. The Agreement, as proposed, would enable Bicentennial Square Partners to be reimbursed for the actual costs associated with certain improvements including, but not limited to the following: Page 3 of 4 Construction of additional parking spaces. Currently, the City leases excess right-of-way to Bicentennial Square Partners for tenant parking. This would add additional spaces in that area; Landscaping in front of Tenant’s space and in the parking areas; Exterior and interior painting; Installation of cell phone boosters in Tenant’s suite; Carpet replacement; Upgrades to the restrooms; Waterproofing to address subterranean leaks; Asphalt improvements in the parking lot and drive aisles; and Signage including Freeway signage on the building and street signage or a monument sign at Tenant’s entry. The total reimbursement over 10 years would be limited to the lesser of: A. $800,000, or B. The amount equal to fifty percent (50%) of the increase between annual sales and use tax revenue received by the City generated by operations at the property compared to a base revenue amount set by the City, or C. The amount of Bicentennial Square Partners’ actual expenses incurred for the eligible improvements. The Sales Tax Reimbursement Program is primarily intended to be made available to proposed new businesses considering locating in the City, however Section 2 of Resolution 135-12 states the City may consider exceptions on a case -by-case basis for existing Dublin businesses that might relocate or desire to expand within the City. The Agreement, as proposed, allows the property owner to participate in the Program for the retention of an existing business and includes the following exceptions to the Program as recommended by the Economic Development Committee: A. Establishes a base revenue rate founded on the most recent five-year average of sales and use tax revenue generated by the Tenant in order to compare net new sales tax revenue to the base revenue amount; and B. Sets a cap on the amount of reimbursement to be up to fifty percent (50%) of the increase between sales and use tax revenue received by the City compared to the base revenue amount. STRATEGIC PLAN INITIATIVE: Strategy 4: Focus efforts on ways to strengthen the City’s economic vitality, including the Downtown, through public investment and economic development. NOTICING REQUIREMENTS/PUBLIC OUTREACH: Since 2014, California Government Code (Section 53083) has required cities or counties granting economic development subsidies of $100,000 or more to provide public notification and a hearing regarding the subsidy being considered. In compliance with the Government Code, Staff has prepared a Consideration of Economic Page 4 of 4 Development Subsidy report and has made it available to the public via the City’s website at www.dublin.ca.gov/1552 since November 21, 2019. The public hearing was noticed in the East Bay Times on Saturday, November 23, 2019 and posted at several locations in the City. A copy of this Staff Report has been provided to Bicentennial Square Partners and Graybar Electric Company. ATTACHMENTS: 1. Resolution Approving the Agreement for Reimbursement of Sales and Use Tax Revenue Between the City of Dublin and Bicentennial Square Partners 2. Exhibit A to the Resolution - Agreement for Reimbursement of Sales and Use Tax Revenue 3. Resolution 135-12 and Resolution 217-14 4. Subsidy Consideration Report RESOLUTION NO. ___-19 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * APPROVING THE AGREEMENT FOR REIMBURSEMENT OF SALES AND USE TAX REVENUE WITH BICENTENNIAL SQUARE PARTNERS WHEREAS, on January 6, 2009, the City Council adopted Resolution No. 09-09, establishing a Sales Tax Reimbursement Program ("Program") for a period of two years for a five-year reimbursement period for participants, which would be made available to businesses that would generate ten million dollars ($10,000,000) in taxable sales annually, which is equivalent to one hundred thousand dollars ($100,000) of new sales tax revenue to the City each year; and WHEREAS, on October 6, 2009, the City Council adopted Resolution No. 149-09, revising and restating the Program to permit the option of a 10-year reimbursement period for participants that generate five million dollars ($5,000,000) in taxable sales annually, which is equivalent to five hundred thousand dollars ($500,000) of new sales tax revenue to the City each year; and WHEREAS, on July 17, 2012, the City Council adopted Resolution No. 135-12, 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 extending the term of the Program until January 5, 2015; and WHEREAS, on December 16, 2014, the City Council adopted Resolution No. 217-14, extending the term of the Program until January 6, 2020; and WHEREAS, the Program authorizes the City of Dublin to enter into agreements with property owners and businesses, in certain circumstances, wherein the City agrees to reimburse the owner or business for the actual costs of certain improvements to business properties utilizing sales tax revenue attributable to the businesses operating on the property; and WHEREAS, the City may consider exceptions to the Program’s guidelines on a case-by-case basis, and hereby exercises that right as recommended by the Economic Development Committee to: 1) establish a base revenue rate set on the most recent five-year average of sales and use tax revenue generated by the Tenant; 2) set a cap on the amount of reimbursement to be up to fifty percent (50%) of the increase between sales and use tax revenue generated compared to the base revenue amount; and WHEREAS, at the June 4, 2019 meeting of the Economic Development Committee, the Committee was in full support of the request and recommended that Staff bring the item before the City Council for consideration; and WHEREAS, Bicentennial Square Partners wishes to avail itself of the benefits of the Program by entering into an agreement with the City to receive reimbursement from the City to be based on sales tax revenue generated by the long-term Tenant at the site and seeks reimbursement for the eligible improvement costs associated with certain improvements including, but not limited to the following: • Construction of additional parking spaces. Currently, the City leases excess right-of-way to Bicentennial Square Partners for tenant parking. This would add additional spaces in that area; • Landscaping in front of Tenant’s space and in the parking areas, • Exterior and interior painting, • Installation of cell phone boosters installed in Tenant’s suite, • Carpet replacement, • Upgrades to the restrooms, • Waterproofing to address subterranean leaks, • Asphalt improvements in the parking lot and drive aisles, and • Signage including Freeway signage on the building and street signage or a monument sign at Tenant’s entry; and WHEREAS, Bicentennial Square Partners is eligible to participate in the Program, as taxable sales generated by the Tenant at the site are estimated to be in excess of $10 million annually; and WHEREAS, but for the existence of this Agreement, Bicentennial Square Partners would not be able to make the improvements desired by the Tenant within the next few years; 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 property taxes resulting from an increase in the assessable value of the property attributable its improvements; 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 also benefit from the retention of jobs in the City resulting from the improvements made to the property for the benefit of the Tenant. NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Dublin approves the Agreement for Reimbursement of Sales and Use Tax Revenue between the City of Dublin and Bicentennial Square Partners, attached hereto as Exhibit A to this Resolution. 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. PASSED, APPROVED AND ADOPTED this 3rd day of December, 2019, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ______________________________ Mayor ATTEST: _________________________________ City Clerk Agreement Between City of Dublin and Bicentennial Square Partners Page 1 of 10 AGREEMENT FOR REIMBURSEMENT OF SALES AND USE TAX REVENUE BETWEEN THE CITY OF DUBLIN AND BICENTENNIAL SQUARE PARTNERS THIS AGREEMENT is made and entered into on December 3rd, 2019, by and between the City of Dublin (“City”), a municipal corporation and Bicentennial Square Partners, a California General Partnership (“Owner”). City and Owner are from time-to-time individually referred to in this Agreement as a “Party” and are collectively referred to as “Parties.” RECITALS WHEREAS, the City of Dublin may engage in business retention efforts, including to provide financial incentives and/or to encourage economic vitality, retain and expand jobs, maintain a local business, or incentivize a business to complete certain upgrades and improvements in order to achieve community-wide benefits and/or retention of revenues that will be used to provide municipal services; and WHEREAS, for the purpose of business retention, the City may choose to enter into a reimbursement of sales and use tax revenue agreement in order to reimburse a participating business or property owner for a portion of the actual costs of certain approved improvements; WHEREAS, Owner owns certain real property located at 11505 Dublin Boulevard, Unit 1, Dublin, California 94568 [A.P.N. 941-1570-004-03], (“Property”), located in the City; and WHEREAS, Owner has entered into a ten (10) year lease renewal agreement for use of the Property with Graybar Electric Company, Inc. (“Tenant”); and WHEREAS, the Property has a total area of approximately twenty-one thousand, one hundred eight (21,108) square feet and has been used as an office by Tenant since May 2009; and WHEREAS, Tenant is expected to generate 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 is one of the City’s top 25 sales tax revenue generators annually and as of the date of this Agreement provides approximately 118 full-time jobs in Dublin; and WHEREAS, Owner and Tenant have agreed in good faith that Owner will conduct certain improvements to the property in order to retain Tenant at the Property; and WHEREAS, provided certain circumstances are met, City is willing to enter into this Agreement for Reimbursement of Sales and Use Tax Revenue (“Agreement”) in order to ensure the continuing presence of Tenant in the City and the concomitant benefits derived by the City from said presence. NOW, THEREFORE, 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: 1.DEFINITIONS 1.1 “Base Revenue Amount” means an amount determined by the City based on the average annual sales and use tax revenue received by the City attributable to operations conducted by Tenant at the Property during fiscal years 2014 to 2018. Agreement Between City of Dublin and Bicentennial Square Partners Page 2 of 10 1.2 “Eligible Reimbursement Amount” means up to fifty percent (50%) of the New Sales Tax Revenue paid by Tenant, which are final and irrevocably allocated and paid to City by the California State Board of Equalization pursuant to the Sales Tax Law. 1.3 “Improvements” means all the improvements to be made to Property as identified in Exhibit A of this Agreement or other improvements as may be approved in writing by the City. 1.4 “Local Sales and Use Tax Revenues” or “Sales Tax Revenue” means that portion of the sales and use taxes, if any, levied under the authority of the Sales Tax Law which are final and irrevocably allocated and paid to City by the Board of Equalization pursuant to the Sales Tax Law. 1.5 “Maximum Compensation Amount” means eight hundred thousand dollars ($800,000), or the actual costs of the completed Improvements paid by Owner, or whichever is less. 1.6 “New Sales Tax Revenue” means the annual amount in sales and use tax revenue as calculated from Local Sales and Use Tax Revenues received by City attributable to operations conducted by Tenant at the Property in excess of the Base Revenue Amount. 1.7 “Reporting Period” means four consecutive fiscal year quarters (a twelve-month period), starting with the first full quarter following the effective date of this Agreement. Fiscal year quarters shall start on January 1, April 1, July 1 and October 1 of each year. 1.8 “Sales Tax Law” means California Revenue and Taxation Code Section 6001 et seq., and any successor law thereto, including the Bradley-Burns Uniform Local Sales and Use Tax Law (Rev. & Tax Code § 7200 et seq.), and any successor law thereto, and all regulations of the State Board of Equalization and other binding rulings and interpretations relating thereto. 1.9 “Term” means the term of this Agreement, beginning with the effective date of December 3, 2019 and continuing for a period of ten (10) Reporting Periods. 2. PROPERTY OWNER’S DUTIES UNDER THIS AGREEMENT 2.1 Owner 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, Owner 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 Owner 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 Owner desires to modify the specifications for any of the Improvements or if change orders are required, Owner shall submit the modifications, change orders and any revisions to the originally approved cost estimate to City for approval. Failure to do so shall relieve the City of any obligation to pay for any Improvements not constructed as approved. Agreement Between City of Dublin and Bicentennial Square Partners Page 3 of 10 2.4 Prevailing Wages. Owner shall require any contractors performing work under this Agreement to pay prevailing wages pursuant to the requirements of the California Labor Code, Section 1771, et seq. For the purpose of this Agreement, prevailing wages are the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute this Agreement as ascertained by the Director of the Department of Industrial Relations of the State of California. The holidays upon which such rates shall be paid shall be all holidays recognized in the collective bargaining agreement applicable to the particular craft, classification, or type of worker employed on the project. The Contractors shall keep an accurate payroll record showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week and the actual per diem wages paid to each journeyman, apprentice, worker or other employee employed by the Contractors in connection with the Project. The payroll records shall be kept in accordance with the provisions of Section 1776 of the California Labor Code, and Contractor shall otherwise comply with requirements of such Section 1776. 2.5 All Improvements will become permanent fixtures of the property and cannot be removed by Owner or Tenant during the term of this Agreement, including upon expiry or termination of the lease or sale of the Property. Exceptions can be made with the prior written consent of the City. Any violation of this section not cured within 60 days shall entitle City to reimbursement of the funds granted by City from the person or entity responsible for the violation. 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 Proof of Completion and Payment of Improvements. Within ninety (90 days) of the end of each Reporting Period, or more frequently at the request of the City, Owner shall provide the City with all bills and evidence of Owner’s final payment for Improvements completed during the Reporting Period, in a form acceptable to City. A form acceptable to the City could include a summary of the original estimate, final amount paid to each vendor, and proof of payment such as cancelled checks. This summary would also require copies of receipts and paid invoices as an attachment to the summary. For any Reporting Period that no improvements are completed and paid, no report is required, however Owner shall inform City in writing that no report is being submitted for that period, subject to the terms of this Agreement. 2.8 In the event that City determines, pursuant to Section 3.2 of this Agreement, that it overpaid Owner due to a miscalculation or misallocation of sales tax payments, and if City is not obligated to make any additional payments to Owner pursuant to this Agreement, Owner shall pay to City the amount City overpaid within thirty (30) days of notification by City of the overpayment. 2.9 Owner hereby acknowledges and agrees that the City may, as required by law, disclose to third parties including members of the public, certain confidential information contained in or derived from Owner’s property tax returns as well as Tenant’s sales tax returns during the term of this Agreement. Such information includes the Base Revenue Amount, the amount of any payments made to Owner pursuant to Section 3.2 of this Agreement and other information including, but not limited to, the requirements of California Government Code Section 53083(b), Government Accounting Standards Board (GASB) Statement No. 77, et seq. Agreement Between City of Dublin and Bicentennial Square Partners Page 4 of 10 2.10 Maintenance Covenants. The Owner covenants and agrees, for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that the Owner will maintain, at Owner's own cost and expense, the Improvements on the Property in a clean and orderly condition, free of graffiti, and in good condition and repair, and will keep the Property free from any accumulation of debris and waste materials. The Owner shall promptly perform any repairs needed to maintain an attractive building appearance and any damage to the building visible from the street is to be repaired immediately. The foregoing covenants shall remain in effect for the duration of this Agreement. During the term of this Agreement, Owner agrees, for itself, its successors, its assigns and every successor in interest, that it will not materially alter the Improvements made with City funds, without the prior written consent of City which consent may be conditioned by City to preserve those features to the extent necessary to achieve the objectives of City for entering into this Agreement. Any violation of this section not cured within 60 days shall entitle City to reimbursement of the funds granted by City from the person or entity responsible for the violation. 3. 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 this Agreement. City shall inform Owner 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 Sales Tax Information. The first sales tax return considered under this Agreement shall encompass the first full quarter that follows the effective date of the Agreement. For example, if the Agreement is signed in December 2019, the first quarterly return would encompass January 1 through March 31, 2020 and the first Reporting Period shall commence on January 1, 2020. City will review Tenant’s sales tax returns that have been filed with the State Board of Equalization related to operations at the Property, beginning with the first full quarter following the effective date of this Agreement, and for every subsequent quarter for a period of ten (10) consecutive twelve- month periods. 3.3 Timing of Payment. Subject to the provisions of this Agreement, up to two times each Reporting Period, City shall pay the Eligible Reimbursement Amount to Owner, in an amount not to exceed the up to fifty percent (50%) of the New Sales Tax Revenue as calculated from Local Sales and Use Tax Revenues received by the City (during each “Reporting Period”). Before making each payment, City shall confirm it has received Local Sales and Use Tax Revenues from the California Department of Tax and Fee Administration. If in any Reporting Period, the Eligible Reimbursement Amount is greater than the amount paid by City to Owner, the difference shall be available to be dispersed during future Reporting Periods. Also, if in any Reporting Period, the amount due to Owner is greater than the amount paid by City due to limited New Sales Tax Revenue at that time, the difference may be paid to Owner during future Reporting Periods as New Sales Tax Revenue is received by City, subject to the terms of this Agreement. At the end of the Term, any unused monies shall be forfeited. Agreement Between City of Dublin and Bicentennial Square Partners Page 5 of 10 3.4 In no event shall City make any payment to Owner for any Reporting Period in which the total sales tax generated by Tenant is less than the Base Revenue Amount. 3.5 At no time shall the cumulative amount of City’s payments to Owner be more than the Maximum Compensation Amount. 3.6 In no event shall City be obligated to pay Owner based on sales tax generated more than ten (10) years after the first quarter of Tenant’s sales tax returns utilized pursuant to Section 3.2 of this Agreement. 3.7 In the event that Owner vacates the Property or Tenant ceases to conduct business at the Property before submitting sales tax returns encompassing ten (10) consecutive years, City’s obligation to pay Owner shall be based only on the amount of sales tax generated by Tenant while occupying the Property under Owner’s ownership. 3.8 If the City otherwise learns that the amount of sales tax generated by Tenant was incorrectly allocated to the City, and if the result of the incorrect allocation is that City paid Owner more or less than it would have been required to pay pursuant to this Agreement, City shall determine the amount of overpayment or underpayment. If the City is obligated to make any subsequent annual payment to Owner 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 Owner pursuant to this Agreement, but has determined that it underpaid Owner, City shall pay Owner the amount it underpaid, provided that the sum total of payments to Owner do not then exceed the Maximum Compensation Amount. This payment shall be made within thirty (30) days of City’s discovery of the amount of the underpayment. If City is not obligated to make any additional payments to Owner pursuant to this Agreement, but has determined that it overpaid Owner, Owner shall pay City the amount City overpaid in compliance with Section 3.2 of this Agreement. 4. INDEMNIFICATION Owner shall defend City, its officers, employees and officials, against any claims or actions (including declaratory or injunctive relief) concerning Owner’s construction of the 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 Owner in connection with, or on account of, Owner’s construction of the Improvements 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. 5. INSURANCE 5.1 General Insurance Requirements. Before fully executing this Agreement, Owner, at its own cost and expense, unless otherwise specified below, shall procure the types and amounts of insurance listed below against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Owner and its agents, representatives, employees, and contractors. Agreement Between City of Dublin and Bicentennial Square Partners Page 6 of 10 Consistent with the following provisions, Owner shall provide proof satisfactory to City of such insurance that meets the requirements of this section and under forms of insurance satisfactory in all respects, and that such insurance is in effect prior to beginning work. Owner shall maintain the insurance policies required by this section throughout the term of this Agreement. VERIFICATION OF THE REQUIRED INSURANCE SHALL BE SUBMITTED AND MADE PART OF THIS AGREEMENT PRIOR TO EXECUTION. Owner shall not allow any contractor to commence work on any subcontract until Owner has obtained all insurance required herein for the contractor. Contractor shall maintain all required insurance listed herein until the Owner accepts contractor’s completion notice for the work performed. 5.2 Workers’ Compensation. Owner shall, at their own cost and expense, maintain Statutory Workers’ Compensation Insurance and Employer’s Liability Insurance for any and all persons employed directly or indirectly by Owner. The Statutory Workers’ Compensation Insurance and Employer’s Liability Insurance shall be provided with limits of not less than $1,000,000 per accident. In the alternative, Owner may rely on a self-insurance program to meet these requirements, but only if the program of self-insurance complies fully with the provisions of the California Labor Code. Determination of whether a self-insurance program meets the standards of the California Labor Code shall be solely in the discretion of the Contract Administrator. The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City for all work performed by the Owner, its employees, agents, and contractors. To comply with this section, Owner shall submit the following: a. Certificate of Workers’ Compensation Insurance in the amounts specified in the section; and b. Waiver of Subrogation Endorsement as required by the section. 5.3 Commercial General and Automobile Liability Insurance. 5.3.1 General Requirements. Owner at its own cost and expense, shall maintain commercial general and automobile liability insurance for the term of this Agreement in an amount not less than TWO MILLION DOLLARS ($2,000,000.00) per occurrence and automobile liability insurance for the term of this Agreement in an amount not less than $2,000,000 per occurrence, combined single limit coverage for risks associated with the work contemplated by this Agreement. If a Commercial General Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but shall not be limited to, protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property resulting from activities contemplated under this Agreement, including the use of owned and non-owned automobiles. 5.3.2 Minimum scope of coverage. Commercial general coverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form CG 0001 (most recent edition) covering comprehensive General Liability on an “occurrence” basis. Automobile coverage shall be at least as broad as Insurance Services Office Automobile Liability form CA 0001, Code 1 (any auto). No endorsement shall be attached limiting the coverage. Agreement Between City of Dublin and Bicentennial Square Partners Page 7 of 10 5.3.3 Additional requirements. Each of the following shall be included in the insurance coverage or added as an endorsement to the policy: a. The Insurance shall cover on an occurrence or an accident basis, and not on a claims- made basis. b. City, its officers, officials, employees, and volunteers are to be covered as additional insureds as respects: liability arising out of work or operations performed by or on behalf of the Owner; or automobiles owned, leased, hired, or borrowed by the Owner. c. Owner hereby agrees to waive subrogation which any insurer or contractor may require from vendor by virtue of the payment of any loss. Owner agrees to obtain any endorsements that may be necessary to affect this waiver of subrogation. d. For any claims related to this Agreement or the work hereunder, the Owner’s insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Owner’s insurance and shall not contribute with it. 5.3.4 Submittal Requirements. To comply with this section, Owner shall submit the following: a. Certificate of Liability Insurance in the amounts specified in the section; b. Additional Insured Endorsement as required by the section; c. Waiver of Subrogation Endorsement as required by the section; and d. Primary Insurance Endorsement as required by the section. Failure to exercise this right shall not constitute a waiver of right to exercise later. 5.4 All Policies Requirements. 5.4.1 Acceptability of Insurers. All insurance required by this section is to be placed with insurers with a Bests' rating of no less than A:VII. 5.4.2 Verification of Coverage. Prior to beginning any work under this Agreement, Owner shall furnish City with complete copies of all Certificates of Liability Insurance delivered to Owner by the insurer, including complete copies of all endorsements attached to the policies. All copies of Certificates of Liability Insurance and certified endorsements shall show the signature of a person authorized by that insurer to bind coverage on its behalf. If the City does not receive the required insurance documents prior to the Owner beginning work, it shall not waive the Owner’s obligation to provide them. The City reserves the right to require complete copies of all required insurance policies at any time. 5.4.3 Deductibles and Self-Insured Retentions. Owner shall disclose to and obtain the written approval of City for the self-insured retentions and deductibles before beginning any of the services or work called for by any term of this Agreement. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, employees, and volunteers; or the Owner shall provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration and defense expenses. Agreement Between City of Dublin and Bicentennial Square Partners Page 8 of 10 5.4.4 Wasting Policies. No policy required by this Section 5 shall include a “wasting” policy limit (i.e. limit that is eroded by the cost of defense). 5.4.5 Endorsement Requirements. Each insurance policy required by Section 5 shall be endorsed to state that coverage shall not be canceled by either party, except after 30 days’ prior written notice has been provided to the City. 5.5 Contractors. Owner shall require that all contractors, at their own cost and expense, maintain commercial general liability insurance in an amount not less than TWO MILLION DOLLARS ($2,000,000.00) per occurrence and automobile liability insurance in an amount not less than $2,000,000 per occurrence, combined single limit coverage and Statutory Workers’ Compensation Insurance and Employer’s Liability Insurance with limits of not less than $1,000,000 per accident for risks associated with the work contemplated by this Agreement. Contractor shall maintain all required insurance listed herein at least until the Owner accepts contractor’s completion notice for the work performed. Owner agrees to include with all contractors the same requirements and provisions of this Agreement including the Indemnification and Insurance requirements to the extent they apply to the scope of work. Contractors hired by Owner agree to be bound to Owner and the City in the same manner and to the same extent as Owner is bound to the City under the Contract Documents. 5.6 Remedies. In addition to any other remedies City may have if Owner fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option exercise any of the following remedies, which are alternatives to other remedies City may have and are not the exclusive remedy for Owner’s breach:  Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under the Agreement;  Order Owner to stop work under this Agreement or withhold any payment that becomes due to Owner hereunder, or both stop work and withhold any payment, until Owner demonstrates compliance with the requirements hereof; and/or  Terminate this Agreement. 5.10 Term of Coverage. Owner, at its own cost and expense, shall maintain all insurance policies required by this Agreement for the duration of the Agreement’s Term. Owner shall require that all contractors, at their own cost and expense, maintain the insurance policies required by this Agreement until the Owner accepts contractor’s completion notice for the work performed. 6. AMENDMENTS TO AGREEMENT No part of this Agreement shall be altered or amended without written agreement of the signatory Parties. 7. 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(ies). Agreement Between City of Dublin and Bicentennial Square Partners Page 10 of 10 EXHIBIT A Description of Improvements The Maximum Compensation Amount under this Agreement shall not exceed $800,000, or the actual costs of the completed Improvements paid by Owner, or whichever is less. The planned Improvements at the Property (11505 Dublin Boulevard Unit 1, Dublin CA) shall include, but are not limited to the following: • Construction of additional parking spaces in the City’s right-of-way, • Landscaping in front of Tenant’s space and in the parking areas, • Exterior and interior painting, • Install cell phone boosters in Tenant’s suite, • Carpet replacement, • Upgrades to the restrooms, • Waterproofing to address above grade and subterranean leaks, • Asphalt improvements in the parking lot and drive aisles, • Signage including Freeway signage on the building and street signage or a monument sign at Tenant’s entry, • HVAC replacement, and • Install electric vehicle charging station(s). 3230521.1 RESOLUTION NO. 135-12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN REVISING AND RESTATING THE GENERAL PROVISIONS OF THE CITY'S SALES TAX REIMBURSEMENT PROGRAM WHEREAS, one of the City Council's Fiscal Year 2009 -2010 High Priority Goals and Objectives was to develop an Economic Incentive Program; and WHEREAS, beginning in January 2009, the City Council adopted various Resolutions establishing and modifying a Sales Tax Reimbursement Program ( "Program ") to stimulate economic development activities in the City by establishing a reimbursement mechanism to fund certain eligible improvements made to existing buildings and structures; and WHEREAS, the City Council of the City of Dublin wishes to extend the time period of the Program, to revise other provisions relating to eligible projects and to restate the provisions of the Program as a whole. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby revise and restate the general guidelines of the City's Sales Tax Reimbursement Program as follows. 1. The primary objective of this Sales Tax Reimbursement Program ( "Program ") is to: (a) improve the aesthetic nature and physical appearance of existing buildings and to promote site improvements to commercial properties in the existing commercial /office /industrial areas of Dublin; (b) target existing buildings throughout the community with the goal of improving the existing building stock and also lowering long -term vacancy rates in the community; (c) generate additional sales tax revenue for the City by encouraging businesses to establish a presence in the City; and (d) attract new jobs to the City. The provisions of this Resolution are intended to provide general guidelines for the Program, and are not intended to describe all of the requirements that may be imposed in an agreement entered into pursuant to the Program. 2. The Program is primarily intended to be made available to proposed new businesses considering locating in the City. An exception may be considered, on a case -by -case basis, for existing Dublin businesses that might relocate or expand within the City, provided that they can show that such a move or expansion is expected to result in additional sales tax revenues above the amount they have historically paid in an amount that meets the minimum sales tax revenue targets required for the applicable agreement category, as described in Section 5. 3. The following provisions apply to businesses that wish to utilize the Program to fund improvements to existing structures and developed property sites: a) Agreements entered into pursuant to this portion of the Program shall limit the eligible reimbursement amount to the actual cost of eligible improvements paid by the business owner for improvements to structures and to property sites. The eligible reimbursement amount shall be certified by the provision of documentation showing the amount actually paid for the eligible improvements. Eligible improvements are: Page 1 of 3 i) Exterior improvements (including painting, fagade repair, replacement signage) ii) Interior improvements to the building iii) Site improvements (including parking lots, driveways, landscaping, etc.). iv) Reimbursement for demolition of existing buildings and replacement with new buildings may, at the City's discretion, be considered on a case -by -case basis. b) Business owners may apply for consideration as participants in the Program. If approved for consideration by City Staff, the business owner and City Staff shall negotiate a written agreement for the recovery of the costs of certain improvements made to the property at which their business is proposed to be located. Any such agreement is subject to all applicable state and federal laws and must be approved by the City Council before being executed by the City. c) There will be two general categories of agreements under this portion of the Program: Five Year Agreements, and Ten Year Agreements. Under both categories, payments by the City to the business owner will be made no more than once each year, and the amount of the payment in any one year will be no more than fifty percent (50 %) of the sales tax revenue attributable to the business in the preceding year. Furthermore, in no event shall the total amount paid by the City over the entire repayment term exceed the eligible reimbursement amount. i) Five Year Agreements shall provide a maximum repayment term of five years. A Five Year Agreement would be made available to businesses that expect to generate at least $100,000 in sales tax revenue each year (this requires annual taxable sales of $10 million). In order to receive any payment in a given year, participants will be required to certify, by providing copies of sales tax returns, that the business generated at least $100,000 in sales tax revenue for the City in the preceding year. ii) Ten Year Agreements shall provide for a maximum repayment term of ten years. A Ten Year Agreement would be made available to businesses that expect to generate at least $500,000 in sales tax revenue each year (this requires annual taxable sales of $50 million). In order to receive any payment in a given year, participants will be required to certify, by providing copies of sales tax returns, that the business generated at least $500,000 in sales tax revenue for the City in the preceding year. 4. In addition to the above provisions relating to reimbursement for improvements made to existing structures, the City will consider requests for reimbursement of certain improvement costs made by businesses that are constructing new structures on undeveloped property sites or that may be tenants in such new structures. The eligibility of such projects for participation in the Program shall be determined on a case by case basis. Factors that the City will consider in making an eligibility determination include, but are not limited to: a) The public benefit that will be derived from providing Program assistance b) Evidence that, absent the availability of the Program, it will be economically infeasible for a business or businesses to establish a presence in the City. c) The scope and nature of improvements for which reimbursement will be sought. d) The amount of sales tax revenue that is expected to be generated by the participant or its tenant(s). Page 2 of 3 If deemed eligible by City Staff, the business owner and City Staff shall negotiate a written agreement for the recovery of the costs of certain improvements made to the property at which their business is proposed to be located. Any such agreement is subject to all applicable state and federal laws and must be approved by the City Council before being executed by the City. 5. Absent further action by the City Council modifying the termination date, the Program shall terminate on January 5, 2015. PASSED, APPROVED AND ADOPTED this 17th day of July, 2012 by the following vote: AYES: Councilmembers Biddle, Hart, Swalwell, and Mayor Sbranti NOES: None ABSENT: Councilmember Hildenbrand ABSTAIN: None Mayor ATTEST: /� L. ` City Clerk Reso No. 135 -12, Adopted 7- 17 -12, Item 7.4 Page 3 of 3 RESOLUTION NO. 217 -14 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN EXTENDING THE TERMINATION DATE OF THE CITY'S SALES TAX REIMBURSEMENT PROGRAM WHEREAS, one of the City Council's Fiscal Year 2009 -2010 High Priority Goals and Objectives included the development of an Economic Incentive Program; and WHEREAS, in January 2009, the City Council adopted Resolution No. 09 -09, establishing the Sales Tax Reimbursement Program ( "Program ") to stimulate economic development activities in the City; and WHEREAS, in October 2009, the City Council adopted Resolution No. 149 -09, 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 WHEREAS, in December 2010, the City Council adopted Resolution No. 172 -10, approving a two -year extension to the Program's termination date, setting the new termination date as January 9, 2013; and WHEREAS, in July 2012, the City Council adopted Resolution No. 135 -12, approving revisions to the Program to change the project qualifications to meet economic development needs for the City and a two -year extension to the Program's termination date, setting the new termination date as January 5, 2015; and NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Dublin does hereby amend Resolution No. 135 -12 to provide that the Program shall terminate on January 6, 2020. PASSED, APPROVED AND ADOPTED this 16th day of December, 2014 by the following vote: AYES: Councilmembers Biddle, Gupta, Hart, and Mayor Haubert NOES: None ABSENT: None ABSTAIN: None Mayor ATTEST: f ;.q- City Clerk Reso No. 217 -14, Adopted 12- 16 -14, Item 4.8 Page 1 of 1 CITY OF DUBLIN REPORT ON PROPOSED ECONOMIC DEVELOPMENT SUBSIDY FOR BICENTENNIAL SQUARE PARTNERS Pursuant to California Government Code Section 53083, the City of Dublin is providing the following information regarding an economic development subsidy being considered by and between the City of Dublin and Bicentennial Square Partners. Prior to approving the economic development subsidy, the City of Dublin must provide the following information in written form and available to the public and through the City’s website and hold a Public Hearing to consider any written or oral comments on the information contained in the report. If the Agreement is approved, this report shall remain available to the public and posted on the City’s website for the duration of the Agreement (estimated 2029). The Public Hearing to consider any comments on the information contained in this report will be held at the following time and place: Dublin City Council Meeting Tuesday, December 3, 2019 at 7:00 p.m. Council Chamber, 100 Civic Plaza, Dublin, CA 94568 Agreement The City of Dublin desires to assist in the City’s economic development efforts to retain high quality employers in the Dublin community that will likely result in higher sales tax revenues and create jobs within the City. The City has the ability to implement the provisions of AB 562, a Statewide economic development tool passed by Governor Brown in late 2013 for the purpose of allowing local jurisdictions to induce economic development. The City of Dublin and Bicentennial Square Partners are proposing to enter into an agreement to reimburse Bicentennial Square Partners for a portion of the actual costs of certain improvements to their property located at 11505 Dublin Boulevard in Dublin, CA as outlines in the Agreement. The City is proposing to provide financial assistance in the form of an economic development subsidy to Bicentennial Square Partners as described in the Agreement for Reimbursement of Sales and Use Tax Revenue. Pursuant to Section 53083(a) of the California Government Code (AB562) the following information will be posted on the City’s website: Name and address of any business entity benefiting from the subsidy: Bicentennial Square Partners 15671 Stanton Road, Grass Valley, CA 95949 Graybar Electric Company Inc. 34 N. Meramec Ave., Clayton MO 63105 doing business at 11505 Dublin Blvd., Dublin CA 94568 Start and end dates for the subsidy: Commencing on December 3, 2019 and ending approximately December 31, 2030, the City proposes to reimburse Bicentennial Square Partners through twice-annual payments paid over a period of ten (10) years. Description of the subsidy and estimated total amount of the expenditure of public funds, or revenue lost, as a result of the subsidy: Over the ten (10) year term, the City estimates to reimburse Bicentennial Square Partners up to Eight Hundred Thousand dollars ($800,000), or fifty percent (50%) of the increase between sales and use tax revenue received by the City generated by Tenant compared to a base revenue amount set by the City, whichever is less. Statement of public purpose: To continue to expand and enhance economic opportunities for businesses in the City, continue to expand the City’s employment base, and continue to generate Sales Tax that the City can utilize to fund general governmental services such as police, fire, street maintenance, and parks and recreations programs. Projected tax revenue to the city as a result of the subsidy: The City of Dublin is estimating to receive between $4 million to $10 million in tax revenue over the ten (10) year period. Estimated number of jobs created by the subsidy broken down by full-time, part-time and temporary positions. It is estimate that the Agreement will retain 118 full-time jobs in the City.