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HomeMy WebLinkAboutItem 4.6 - 3353 Sewer Capacity Assistance Program - Mimi's (2) Page 1 of 3 STAFF REPORT CITY COUNCIL DATE: September 15, 2020 TO: Honorable Mayor and City Councilmembers FROM: Linda Smith, City Manager SUBJECT: Agreement Permitting Re-Allocation of Regional and Local Sewer Capacity with The Hungry Flower, LLC Doing Business as Mimi's Chocolates, Tralee Village, LLC, and Dublin San Ramon Services District Prepared by: Suzanne Iarla, Management Analyst II EXECUTIVE SUMMARY: The City Council will consider approving the re-allocation of sewer capacity rights for The Hungry Flower, LLC doing business as Mimi's Chocolates (applicant), Tralee Village, LLC, and Dublin San Ramon Services District to help offset the cost of sewer fees. The applicant is opening a new confectionary shop and cafe at Tralee Village, located at 6601 Dublin Blvd, Suite N. STAFF RECOMMENDATION: Approve the Resolution Approving an Agreement Permitting Re-Allocation of Regional and Local Sewer Capacity Rights with The Hungry Flower, LLC Doing Business as Mimi's Chocolates (applicant), Tralee Village, LLC, and Dublin San Ramon Services District to Help Offset the Cost of Sewer Fees. FINANCIAL IMPACT: The proposed Agreement provides a credit in the form of residential discharge unit equivalencies (DUE) to help offset the cost of local and regional wastewater fees charged by Dublin San Ramon Services District in the amount of 0.32 DUEs to the applicant. These credits are available through the City's Sewer Capacity Assistance Program. DESCRIPTION: On May 4, 2010, the City Council adopted Resolution 53-10 approving a Letter Agreement with the Dublin San Ramon Services District (DSRSD) for the Administration of Unused Sewer Capacity for the City of Dublin. Commonly referred to as the Sewer Capacity Assistance Program, the Program allows the City to market its excess sewer capacity as an economic development incentive program to help stimulate economic growth in the community. The Program is designed Page 2 of 3 to support large and small businesses and encourage the recruitment, renovation, or re- use of properties in Dublin. The Program allows the City to provide a credit of the DSRSD sewer connection fees that would otherwise be paid by the applicant. The Program currently has approximately 22 residential dwelling unit equivalency (DUEs) credits, however 18 DUEs are set aside with the preference for use in the Retail District of the Downtown Dublin Specific Plan area. The Program sunsets on June 30, 2025. The Program currently uses the following criteria (set forth in Resolution 161-14, approved on September 16, 2014) regarding the percentage of DUE assistance available per user type and square footage of the participating business: User Type Citywide Fine Dining Greater than 5,000 sf - 50% Between 3,500 and 5,000 sf - 75% Less than 3,500 sf - 100% Casual Dining (excluding fast food) Greater than 5,000 sf - 25% Between 3,500 and 5,000 sf - 50% Less than 3,500 sf - 75% Specialty Food (Coffee, Deli, Bakery, etc.) Greater than 5,000 sf - 50% Between 3,500 and 5,000 sf - 75% Less than 3,500 sf - 100% Entertainment/Nightlife (Wine Bars/Taprooms, etc.) Greater than 5,000 sf - 50% Between 3,500 and 5,000 sf - 75% Less than 3,500 sf - 100% In August 2020, Staff received a request to participate in the Program from the owner of Mimi’s Chocolates for their new retail space at 6601 Dublin Blvd, Suite N in Tralee Village. Mimi’s Chocolates is a Tri-Valley business that has been in operation since 2016. Their customer base has grown significantly through the years by word of mouth, social media, and quarterly pop-ups at Nordstrom in Stoneridge Mall. The applicant is requesting 0.32 DUEs. The fee estimate from DSRSD for the regional and local sewer connection fees is approximately $10,900 and a credit of 0.32 DUEs would reduce the fees by approximately $5,600. The applicant did not anticipate the high cost of sewer connection fees; in addition, Staff is aware that the business has suffered economic hardship caused by the current COVID-19 pandemic, and that a recent flood caused by a leak in an upstairs apartment has increased the applicant’s expenses to open the confectionary shop and café. The owner has indicated that without assistance from the City’s Program, Mimi’s Chocolates is in jeopardy of not being able to open their first brick and mortar store. Mimi’s Chocolates is considered a “Specialty Food” type with a retail space of approximately 900 square feet, so the business would be eligible for 100% DUE credit if accepted in the Program. Staff believes that the investment of sewer capacity to support this unique confectionary shop and café will further assist in the City’s economic Page 3 of 3 development efforts to bring high quality retail and restaurants to the Dublin community. Staff presented the request to the Economic Development Committee on August 18, 2020, as Program applications fall under the Committee’s purview to provide policy guidance and direction on economic development activities. The Committee was unanimously supportive in recommending that the City Council support the request. STRATEGIC PLAN INITIATIVE: None. NOTICING REQUIREMENTS/PUBLIC OUTREACH: A copy of this Staff Report has been provided to the Applicant. ATTACHMENTS: 1. Resolution Approving an Agreement Permitting Re-Allocation of Regional and Local Sewer Capacity with The Hungry Flower, LLC, Tralee Village, LLC and Dublin San Ramon Services District 2. Exhibit A to the Resolution - Agreement Permitting Re-Allocation of Regional and Local Sewer Capacity Rights RESOLUTION NO. XX – 20 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * APPROVING AN AGREEMENT PERMITTING RE-ALLOCATION OF REGIONAL AND LOCAL SEWER CAPACITY RIGHTS WITH THE HUNGRY FLOWER, LLC DOING BUSINESS AS MIMI’S CHOCOLATES, TRALEE VILLAGE, LLC, AND DUBLIN SAN RAMON SERVICES DISTRICT TO HELP OFFSET THE COST OF SEWER FEES WHEREAS, state and local governments use economic development incentives to attract or retain jobs and/or improve the local tax base; and WHEREAS, on May 4, 2010, the City Council adopted Resolution 53-10 approving a Letter Agreement with Dublin San Ramon Services District for the administration of unused City of Dublin sewer capacity and the creation of a city-wide Sewer Capacity Assistance Program to support businesses that require new or additional sewer capacity; and WHEREAS, the District’s Board of Directors adopted Resolution 9-10 approving refunding unused sewer capacity to the City in accordance with District Code Section 7.2.12.B, and Resolution 14-10 approving and expanding the administrative procedure to reallocate unused sewer capacity to the City as authorized by Resolution N9-10 to include residential units in accordance with District Code Section 7.2.12.B; and WHEREAS, the City Council subsequently amended the Program through adopted Resolution 67-13 on May 21, 2013, adopted Resolution 33-14 on March 18, 2014, adopted Resolution 161-14 on September 16, 2014, and Resolution 34-19 on April 16, 2019; and WHEREAS, a new business, The Hungry Flower, LLC doing business as Mimi’s Chocolates (Applicant) has leased space at 6601 Dublin Blvd, Suite N, in Dublin, CA 94568 (A.P.N. 941-2831-003, Tralee Village) and has requested to participate in the Program in order to support the opening of their new confectionary shop and café; and WHEREAS, the City Council finds that this Agreement serves a public purpose in that increased revenues received from both sales tax revenue that it may not otherwise receive, and from the increase in the property taxes as a result of improvements to the property benefit the City and its residents; 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 a new business is established, or an existing business is expanded. NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve an Agreement Permitting Re-Allocation of Regional and Local Sewer Capacity Rights with The Hungry Flower, LLC doing business as Mimi’s Chocolates, Tralee Village, LLC, and Dublin San Ramon Services District. to provide 0.32 Residential Discharge Equivalencies to the Applicant. BE IT FURTHER RESOLVED that the City Manager is authorized to execute the Agreement, attached hereto as Exhibit A to this Resolution, in substantially the form attached. PASSED, APPROVED AND ADOPTED this 15th day of September 2020, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ______________________________ Mayor ATTEST: ____________________________ City Clerk RECORDING REQUESTED BY: City of Dublin When Recorded Mail To: City Clerk City of Dublin 100 Civic Plaza Dublin, CA 94568 Fee Waived per GC 27383 Space above this line for Recorder’s Use AGREEMENT PERMITTING RE-ALLOCATION OF REGIONAL AND LOCAL SEWER CAPACITY Agreement with Tralee Village, LLC and The Hungry Flower, LLC, dba Mimi’s Chocolates Page 1 of 8 AGREEMENT PERMITTING RE-ALLOCATION OF REGIONAL AND LOCAL SEWER CAPACITY RIGHTS This Agreement, made and entered into on September 15, 2020, by and between the DUBLIN SAN RAMON SERVICES DISTRICT, a public agency in the Counties of Alameda and Contra Costa, California (“District”), CITY OF DUBLIN, a general law city in the County of Alameda (“City”), TRALEE VILLAGE, LLC (“Property Owner”) and THE HUNGRY FLOWER, LLC doing business as MIMI’S CHOCOLATES (“Applicant”); WITNESSETH: WHEREAS, on May 4, 2010, the City Council of the City of Dublin adopted Resolution No. 53-10 approving a Letter of Agreement with the District for the administration of unused City of Dublin sewer capacity and the creation of a city-wide Sewer Capacity Assistance Program; and WHEREAS, the District’s Board of Directors adopted Resolution No. 9-10 approving refunding unused sewer capacity to the City in accordance with District Code Section 7.2.12.B, and Resolution No. 14-10 approving and expanding the administrative procedure to reallocate unused sewer capacity to the City as authorized by Resolution No. 9-10 to include residential units in accordance with District Code Section 7.2.12.B; and WHEREAS, on May 21, 2013, the City Council of the City of Dublin adopted Resolution No. 67-13 amending the City’s Sewer Capacity Assistance Program and Establishing Criteria for Program Implementation; and WHEREAS, the City Council of the City of Dublin subsequently amended the Program through adopted Resolution No. 33-14 on March 18, 2014, adopted Resolution No. 161-14 on September 16, 2014, Resolution No. 34-19 on April 16, 2019; and WHEREAS, Applicant has requested and applied for a Certificate of Capacity Rights from the District to receive service from the District’s wastewater facilities; and WHEREAS, City has agreed to allocate City wastewater capacity rights for Applicant’s new, expanding, or relocating business (hereinafter, “project” or “Applicant’s Project”); and WHEREAS, Owner acknowledges the benefits of using such an allocation to support Applicant’s Project, and believes that those benefits outweigh the risk that such an allocation could subsequently be removed from the Owner’s Property if Applicant’s Project is unsuccessful; and WHEREAS, Owner is therefore willing to agree that if Applicant’s Project fails, City may recover the full amount of City’s wastewater capacity rights that City has allocated to Applicant’s project; and WHEREAS, under the circumstances specified in, and pursuant to the provisions of, Resolution No. 09-10, a portion of City’s wastewater capacity rights may be allocated to Applicant’s Project pursuant to written agreement in a form approved by the District’s Board of Directors; and Agreement with Tralee Village, LLC and The Hungry Flower, LLC, dba Mimi’s Chocolates Page 2 of 8 WHEREAS, City, Owner and Applicant desire to enter into such agreement in the form hereof as heretofore approved by the District’s Board of Directors; NOW THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS: 1. Definitions. The following words and terms as used herein shall have the meanings respectively ascribed thereto except to the extent that any one or more of said definition(s) may from time to time be amended or revised by the District’s Board of Directors through amendment of the District Code affecting (and/or renumbering) the provisions referenced below: A. Applicant – hereinabove described. B. Applicant’s Project – Mimi’s Chocolates, a confectionary shop and specialty cafe, leasing approximately 900 square feet at The Shops at Tralee (APN: 941-2831-003) C. BOD – defined in the District Code, Section 1.20.080, as follows: “BOD (biochemical oxygen demand)” means the quantity of dissolved oxygen utilized in the biochemical oxidation of organic matter measured using the standard laboratory method therefor, usually expressed in milligrams per liter (mg/L). D. Capacity Rights – defined in the District Code, Section 1.20.080, with respects to wastewater connection, as follows: “Capacity rights” means the flow, BOD and suspended solids (SS) capacity purchased by a user upon obtaining a certificate of capacity rights, or, if such data is not available, the average month loadings of a user during some prior calendar year when it can be shown to the satisfaction of the District Engineer that such prior year’s average month loadings are more representative of a user’s use of the wastewater system. E. Certificate of Capacity Rights – defined in the District Code, Section 1.20.080, as follows: “Certificate of capacity rights” (formerly known as “connection permit” or “sewer permit”) means a certificate granted by the District to an applicant reserving capacity sufficient to provide potable and/or recycled water service through a specified number of equivalent 5/8-inch water meters to be provided on the parcel which will be served by the District, or to provide the wastewater capacity in terms of flow and strength allocated to the parcel to be served by the District, or both. F. District – hereinabove defined. G. District Code – the District Code of the Dublin San Ramon Services District, as adopted, and as amended from time to time by the District’s Board of Directors. Agreement with Tralee Village, LLC and The Hungry Flower, LLC, dba Mimi’s Chocolates Page 3 of 8 H. Local Wastewater Capacity Fee – defined in the District Code, Section 3.70.010.C.2, as follows: Local wastewater capacity reserve fees for service from and use of the District’s wastewater collection system, based on average daily flow proposed to be discharged to the wastewater system, within the area served by the District or a specified portion thereof, as estimated by the District Engineer. I. Non-transferability of certificate of capacity rights – defined in the District Code, Section 3.60.040, as follows: Capacity rights, when a certificate therefor is issued, shall attach to and run with the lot or parcel of land for which the certificate was issued; capacity rights for multiple parcels, including landscaped parcels along roadways, under common ownership and served by a single irrigation water meter shall attach to and run with the parcels of land for which the certificate was issued. The certificate of capacity rights is not transferable except with the land to which it is attached. J. Owner - hereinabove defined. K. Owner’s Property – 6601 Dublin Blvd, Suite N, Dublin, CA 94568 Assessor’s Parcel No. 941-2831-003 L. Regional Wastewater Capacity Reserve Fee – defined in the District Code, Section 3.70.010.C.1, as follows: Regional wastewater capacity reserve fees for service from and use of the District’s regional wastewater treatment plant, as determined by the District Engineer, based on the average daily flow, BOD and SS proposed to be discharged to the wastewater system within the area served by the District or a specified portion thereof as estimated by the District Engineer. M. Residential Discharge Equivalency – as defined herein, as follows: Residential discharge equivalency means a unit of wastewater discharge equal in volume and strength to the discharge of a typical single-family residential user. This shall be 220 gallons per day of flow, 0.42 lb. per day of BOD, and 0.45 lb. per day of SS. N. SS – defined in the District Code, Section 1.20.080, as follows: “SS (suspended solids)” means solids, as measured using the standard laboratory method therefor, that are in suspension in wastewater and which are largely removable by laboratory filtration procedures. Agreement with Tralee Village, LLC and The Hungry Flower, LLC, dba Mimi’s Chocolates Page 4 of 8 Notwithstanding any implication to the contrary, this Agreement shall remain in effect despite the revision or repeal of any of the sections of the District Code, including without limitation those referenced above. 2. Allocated Wastewater Capacity Rights. In response to the Applicant’s request City shall, subject to the right to terminate set forth in Paragraph 4, allocate Wastewater Capacity Rights to Owner’s Property in the amount of 70 gpd (gallons per day) flow, 0.3438 pounds per day BOD and 0.3678 pounds per day SS [or, 0.32 Residential Discharge Equivalencies, as applicable]. Said allocation shall be provided to Applicant as an equivalent portion of credit toward both Regional Wastewater Capacity Reserve Fee and Local Wastewater Capacity Reserve Fee due for Applicant’s Project. Said allocation shall become effective upon Applicant’s payment of the remainder of fees due and District issuance to Applicant a Certificate of Capacity Rights for Applicant’s Project. In recognition of the benefits flowing from the allocation of additional Capacity Rights to Owner’s Property as specified in this Agreement, Owner expressly waives the protections that would otherwise be afforded to Owner by the District Code, including without limitation those sections referenced above, to the extent they are determined by the District to be inconsistent with the provisions of this Agreement. 3. Term of Agreement; Effect of Termination. This Agreement shall become effective upon the date first hereinabove written, or the date a lease is executed between the Applicant and Owner, whichever date is later, and shall expire ten (10) years from the date of issuance of a Certificate of Occupancy pertaining to the Applicant’s Project located on Owner’s Property, unless earlier terminated pursuant to Paragraphs 4 or 6 hereof. If a lease is not executed within six months of the signing of this Agreement, the Agreement shall become null and void. In the event of termination by District pursuant to Paragraph 4 or Paragraph 6 of this Agreement, all rights and privileges of Owner and Applicant hereunder shall cease and terminate, and all Wastewater Capacity Rights allocated pursuant to this Agreement shall forthwith revert to City, and become the property of City, and the Certificate of Capacity Rights issued hereunder shall be amended to reflect the re-allocation to City of all Wastewater Capacity Rights allocated pursuant to this Agreement and the commensurate reduction in Wastewater Capacity Rights allocated to Owner’s Property. District or City may, but shall not be required to, record a Notice of Termination against the Owner’s Property upon which the Applicant’s Project is or was located. Notwithstanding the foregoing, the Wastewater Capacity Rights allocated to Owner’s Property by virtue of the Wastewater Capacity Reserve Fees paid by Applicant shall remain allocated to Owner’s Property and shall run with such land, subject to the provisions of to the District Code relating to the reduction, expiration, or termination of Sewer Permits and Capacity Rights. 4. Allocation Expressly Conditional on Continuing Operations: During the term of this Agreement, should the City determine that Applicant’s Project has ceased operations, all rights and privileges of Owner and Applicant under this Agreement, shall cease and, upon the written request of City, the District may terminate this Agreement upon five (5) days’ Agreement with Tralee Village, LLC and The Hungry Flower, LLC, dba Mimi’s Chocolates Page 5 of 8 written notice, whereupon all Wastewater Capacity Rights allocated pursuant to the Certificate of Capacity Rights issued hereunder shall, as specified in Paragraph 3 (Term of Agreement; Effect of Termination), revert to City, and become the property of City. District’s right of termination under this Paragraph 4 is in addition to, and separate from, District’s right of termination pursuant to Paragraph 6 (Hold Harmless). 5. Non-Assignability. Neither this Agreement, nor any interest herein, may be assigned, conveyed, or in any manner transferred by Owner or Applicant to anyone, including any successor to the Owner (of the Owner’s Property) or any successor to the owner of Applicant’s Project, or to or by one or more tenants thereof, without the prior written consent thereto signed by the City Manager and the District’s General Manager, which consent may be conditioned upon the signature of the successor(s) upon a recordable instrument by which the successor(s) assume(s) all of the rights and obligations of its predecessor under this Agreement, which shall, at the election of either the City of the District, be recorded against the Owner’s Property upon which the Applicant’s Project is or was located. District and City shall not unreasonably withhold its consent to an assignment to the successive owner(s) of Owner’s Property or to the successive owner(s) of Applicant’s Project. Notwithstanding the foregoing, no assignment of the Certificate of Capacity Rights issued hereunder, or the Capacity Rights pertaining thereto, shall be made with respect to any other property than Owner’s Property hereinabove defined except as specified in Paragraphs 2 or 4 above. 6. Hold Harmless. Applicant shall hold harmless, defend, and indemnify District, its Board of Directors, officers, employees, consultants, and agents from and against any and all claims, suits, causes of action, or other proceedings for damages, injuries, losses, costs (including attorneys’ fees and costs of suit or other dispute resolution processes), or any other liability arising out of, or in connection with, the performance, or failure to perform, any of the duties and obligations of Applicant hereunder. The duty to defend shall include provision for all costs and fees, including attorneys’ fees, associated with such defense, and the selection of defense counsel for District, its Board, officers, employees, consultants, and agents shall be by District. The duty of Applicant to indemnify District shall include the duty to defend as set forth in California Civil Code Section 2778; provided that nothing herein contained shall require Applicant to defend against claims for a liability excluded under the provisions of California Civil Code Section 2782. 7. Successors. If, and to the extent, approved by the City Manager and the District’s General Manager pursuant to Paragraph 5 hereof, entitled Non-Assignability, the duties, responsibilities, and rights pertaining and accruing to the parties hereto, shall run with the land, and be binding upon and inure to the benefit of the successors, administrators, assigns, and transferees of the respective parties hereto, subject to the provisions of to the District Code relating to the reduction, expiration, or termination of Certificate of Capacity Rights and Capacity Rights. Agreement with Tralee Village, LLC and The Hungry Flower, LLC, dba Mimi’s Chocolates Page 6 of 8 8. Notices. All notices, necessary or convenient to the performance of the parties hereunder, shall be in writing, and may be given to the parties by personal delivery, or by mail, first class (or equivalent) postage prepaid, addressed in the case of District as follows: in the case of District, as follows: Dublin San Ramon Services District 7051 Dublin Boulevard Dublin, CA 94568-3018 Attention: General Manager Telephone: (925) 828-0515 in the case of City, as follows: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager Telephone: 925-833-6650 Email: city.manager@dublin.ca.gov in the case of Owner, as follows: Tralee Village, LLC P.O. Box 2053 Dublin, CA 94568 Attention: Tiana Jenkins, COO or Gabriel Chiu, Manager Telephone: 925-997-8881 Email: tianacjenkins@gmail.com and in the case of Applicant, as follows: Mimi’s Chocolates 309 Stanforth Court San Ramon, CA 94582 Attention: Mia Fleury Jenkins, Owner Telephone: 510-508-6727 Email: fleury.m@mimischocolates.com 9. Recordation. This Agreement shall be submitted by the District to the County Recorder’s Office for the county in which the Owner’s Property is located, for recordation in the Official Records thereof, to give notice of the Agreement in the public records. Upon recordation, the terms, conditions and obligations of the Agreement shall run with such land, subject to the provisions of to the District Code relating to the reduction, expiration, or termination of Certificate of Capacity Rights and Capacity Rights. Agreement with Tralee Village, LLC and The Hungry Flower, LLC, dba Mimi’s Chocolates Page 7 of 8 10. Paragraph Headings. Paragraph headings as used herein are for convenience and shall not be deemed to alter or amend the paragraphs headed thereby. 11. Integration. This Agreement comprises the entire agreement between the parties with respect to the subject matter thereof, and supersedes and replaces any and all prior understandings, oral or written, between the parties. [No further text on this page.] Agreement with Tralee Village, LLC and The Hungry Flower, LLC, dba Mimi’s Chocolates Page 8 of 8 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and effective as of the date first hereinabove written. [Countersigned as part of the Agreement Permitting Re-Allocation of Regional and Local Sewer Capacity Rights entered into on September 15, 2020] DUBLIN SAN RAMON SERVICES DISTRICT, a public agency of the State of California By: ________________________________________ Daniel McIntyre, General Manager Date: _______________________________________ ATTEST: By: ________________________ Nicole Genzale, District Secretary CITY OF DUBLIN, By: ________________________________________ Linda Smith, City Manager Date: _______________________________________ ATTEST: By: ________________________ Marsha Moore, City Clerk TRALEE VILLAGE, LLC, By: ________________________________________ Tiana Jenkins, COO Date: _______________________________________ THE HUNGRY FLOWER, LLC By: ________________________________________ Mia Fleury Jenkins, Owner Date: _______________________________________