HomeMy WebLinkAboutItem 7.2 Sales Tax Reimb ExtensionG~~~ O~ DU~~~
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~~~,,~~1 DUBLIN CITY COUNCIL File # ^[~]0^p -~D~
DATE: December 7, 2010
TO: Honorable Mayor and City Councilmembers
FROM: T Joni Pattillo, City Manager
SUBJE . Extension of the City's Sales Tax Reimbursement Program
Prepared By: Linda Maurer, Economic Development Director
EXECUTIVE SUMMARY:
Staff is seeking to extend the termination date of the City's Sales Tax Reimbursement Program
from January 9, 2011 to January 9, 2013.
FINANCIAL IMPACT:
None
RECOMMENDATION:
Staff recommends that the City Council adopt a Resolution Extending the Termination Date of
the Sales Tax Reimbursement Program until January 9, 2013.
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Submitted By Review y
Economic Development Director Assistant City Manager
Page 1 of 2 ITEM NO. 7~- ~~
DESCRIPTION:
The City Council adopted a Sales Tax Reimbursement Program in January 2009 (Resolution
09-09) as one of several measures designed to encourage economic investment in the City of
Dublin. To date, the City has completed two Sales Tax Reimbursement Agreements, resulting
in the creation of new jobs and sales tax revenue to the City.
The Sales Tax Reimbursement Program was revised by the City Council on October 6, 2009
(Resolution 149-09 - Attachment 1). The Program revision provided for a two-tier
reimbursement period (from five years to 10 years) depending on the potential revenue ($10
million in taxable sales and above; and $50 million in taxable sales and above) derived from the
prospective use. With the original approval and subsequent revision, the termination date for
the Program was set for January 9, 2011, unless modified by the City Council.
Staff is recommending the City Council modify the termination date for the Sales Tax
Reimbursement Program from January 9, 2011 to January 9, 2013, a two-year extension from
the original termination date. Staff believes that the.Program's objectives (listed below) remain
valid and that the Program continues to be necessary in order to improve the economic climate
in Dublin.
Program Objectives
• The objective of this Sales Tax Reimbursement Program ("Program") is to:
o(a) improve the aesthetic nature and physical appearance of existing buildings and
promote site improvements to commercial properties in the existing
commercial/office/industrial areas of Dublin;
o(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;
o(c) generate additional sales tax revenue for the City by encouraging businesses to
establish a presence in the City; and
o(d) attract new jobs to the City.
The proposed Program extension (Attachment 2) would not change any other aspect or
limitation of the current Program and would not be in conflict with any current law.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None
ATTACHMENTS: 1. Resolution 149-09
2. Resolution Approving an Extension to the Termination Date for the
Sales Tax Reimbursement Program from January 9, 2011 to January
9, 2013
Page 2 of 2
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RESOLUTION NO. 149 - 09
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
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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 is to develop an Economic Incentive Program; and
WHEREAS, in January 2009, the City Council adopted Resolution No. 9-09, establishing
the Sales Tax Reimbursement Program ("Program") to stimulate economic development
activities in the City; and
WHEREAS, the adopted Program permits certain companies who have satisfied the
City's requirements for participation in the program to receive reimbursement over a five (5)
year reimbursement period for pre-approved exterior improvements (painting, faCade repair,
replacement signage), interior improvements (tenant improvements), and site improvements
(parking lots, driveways, landscaping, etc.} provided that the Program participants generate
$100,000 in new sales tax revenue to the City each year, in order to receive reimbursement for
that year; and
WHEREAS, this Resolution would revise the Program to give 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, this revision will provide additional, targeted assistance to the City's
economic development efforts to backfill large vacancies in the Downtown and attract users in
other areas within the City that allow for regional or general commercial development; and
WHEREAS, the City Council of the City of Dublin wishes to revise the Sales Tax
Reimbursement Program as described above, 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 objective of this Sales Tax Reimbursement Program ("Program") is to: (a) improve
the aesthetic nature and physical appearance of existing buildings and 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.
Page 1 of 3 ~~ I~..~~ -/Y~
ATTACHMENT 1
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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. Agreements entered into pursuant to 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 the property site. The eligible reimbursement amount shall be
certified by the provision of documentation showing the amount actually paid for the eligible
improvements. Eligible improvements are:
a) Exterior improvements (including painting, fa~ade repair, replacement signage)
b) Interior improvements to the building
c) Site improvements (including parking lots, driveways, landscaping, etc.).
d) 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.
4. 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.
5. There will be two general categories of agreements under 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.
a) 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 annuat 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.
b) 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 wilt be required to certify, by providing copies of sales tax returns, that
the business genera#ed at least $500,000 in sales tax revenue for the City in the
preceding year.
Page 2 of 3
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6. The Program shall terminate on January 5, 2011, absent further action by the City
Council modifying the termination date.
PASSED, APPROVED AND ADOPTED this 6th day of October, 2009 by the following
vote:
AYES: Councilmembers Biddle, Hart, Hildenbrand, Scholz, and Mayor Sbranti
NOES: None
ABSENT: None
ABSTAIN: None
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Mayor
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City Clerk
Reso No. 149-09, Adopted 10-6-09, Item 8.2 Page 3 of 3
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RESOLUTION NO. XX-10
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
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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 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, Resolution No. 149-09 established a termination date for the Program of
January 9, 2011.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does
hereby amend Resolution No. 149-09 to provide that the Program shall terminate on January 9,
2013.
PASSED, APPROVED AND ADOPTED this 7t" day of December, 2010 by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
City Clerk
1555518.1
Mayor
ATTACHMENT 2