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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />AUGUST 5, 2013 <br />TITLE: <br />ECONOMIC DEVELOPMENT AGREEMENT <br />WITH IPC TO RELOCATE AND OPERATE <br />IN THE CITY OF SANTA ANA <br />CITY MAN GER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />-00 70 <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on 1" Reading <br />❑ Ordinance on 2nd Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Authorize the City Manager and Clerk of the Council to execute a Relocation Commitment <br />Agreement with IPC (USA), Inc., a California corporation, to secure the relocation and continued <br />operation of the company's California headquarters and sales office in the City of Santa Ana, <br />subject to non - substantive changes approved by the City Manager and City Attorney. <br />DISCUSSION <br />The proposed agreement will result in bringing the California headquarters and sales office of <br />IPC, a chemical and energy business, into the City of Santa Ana. As a result of this relocation, <br />Santa Ana would become the company's principal place of business in California and the City's <br />economy would benefit from the sales taxes generated from the firm's petroleum business, as <br />well as from the creation and maintenance of jobs in the community. The company estimates <br />that it generates approximately $1.4 million a year in local sales tax. As an economic <br />development incentive to secure the relocation and continual operation of the company in Santa <br />Ana, the agreement provides that the City will pay IPC an amount equivalent to 50 percent of the <br />local sales tax generated up to the $1.4 million and 70 percent of the local sales tax generated <br />above the $1.4 million. By approving this agreement, and bringing this new business into Santa <br />Ana, an estimated $700,000 in additional sales tax will annually flow into the City's General Fund. <br />Recently, a representative from IPC contacted City Manager's office to discuss the firm's <br />potential move of their corporate headquarters and sales office into the City of Santa Ana. At the <br />time, IPC was in initial conversations over an office space lease agreement for a property in the <br />City. IPC is an independent wholesale distributor of gasoline, diesel, jet fuel and other refined <br />petroleum products throughout the United States. The company representatives have disclosed <br />that their annual local sales tax generation is approximately $1.4 million dollars. <br />25K -1 <br />