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(3) A description of the economic development subsidy, including the estimated total <br />amount of the expenditure of public funds by, or of revenue lost to, the local agency <br />as a result of the economic development subsidy. <br />The economic development subsidy to Santa Ana residents and businesses is $500 per <br />vehicle purchased for a maximum subsidy of $1,700,000 for each of the five year proposed <br />term, with a maximum during the subsidy period of $8,500,000. <br />(4) A statement of the public purposes for the economic development subsidy. <br />With the new sales tax measure recently passed in Santa Ana, local dealerships stated that <br />the citywide sales tax increase could lead to decreases in the number of cars sold to <br />residents. The VIP Program has been developed in order to address the serious leakage of <br />local automotive purchases to outside jurisdictions. This represents a serious shifting of local <br />revenues, as well as the loss of funds needed for vital City services, to outside jurisdictions, <br />resulting in a negative impact on the City's local economy. This affect is further compounded, <br />as is the resulting downward pressure on dealer expansion and job growth, by the loss of <br />revenue that is typically generated by servicing of these vehicles that could have been <br />performed at Santa Ana's local dealerships. To spur residents to continue to purchase from <br />Santa Ana dealerships, the Resident VIP incentive has been proposed. <br />(5) Projected tax revenue to the local agency as a result of the economic development <br />subsidy. <br />With marketing of the program, staff is expecting that the number of new, leased, and used <br />autos cars sold to local residents, and entitled to the incentive, will increase and could <br />reach up to 3,500 vehicles. This is estimated at 337 new vehicles sold and 227 used <br />vehicles sold. With the average new vehicle purchase price of $37,557 and used vehicle <br />purchase price of $17,705, this could generate an additional $417,000 in sales tax revenue <br />to the City. <br />(6) Estimated number of jobs created by the economic development subsidy, broken <br />down by full-time, part-time, and temporary positions. <br />The proposed Agreement will assist in retaining approximately 50 jobs at the auto dealers <br />and attract over 10 new positions to meet the increased demand of sales. <br />75B-14 <br />