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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />OCTOBER 20, 2015 <br />TITLE: <br />SALES TAX REBATE AGREEMENT <br />WITH VOLVO OF ORANGE COUNTY <br />{STRATEGIC PLAN NO. 3,3C) <br />CITY MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on 1e1 Reading <br />❑ Ordinance on 2n° 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 sales tax rebate agreement <br />with SSF, INC., doing business as Volvo of Orange County for a 50 percent rebate of the <br />increase in new sales tax generated by the dealer above a base year up to total maximum <br />amount of $1,000,000 over a 10 -year period, subject to non - substantive changes approved by the <br />City Manager and City Attorney. <br />DISCUSSION <br />Sales tax rebate assistance is an economic development tool used to encourage the <br />development or expansion of new businesses that create additional sales tax for a City. <br />The City was recently approached by Volvo of Orange County, one of the Santa Ana Auto Mall <br />dealerships, to consider a sales tax rebate assistance agreement to help fund their facility <br />upgrade. The Volvo Group Global, the corporate office of Volvo of Orange County has requested <br />dealerships to complete a remodel (interior and exterior) of their facilities to reposition themselves <br />within the automotive market. Enhancements to the Auto Mall should be supported by the City to <br />keep it competitive and state of the art. <br />The remodel of the facility is estimated to cost $2.5 million dollars and will take approximately six <br />months to complete. With the agreement to remodel, Volvo of Orange County will receive an <br />increase in the allocation of newly designed and highly desired new vehicles for their location. It <br />was indicated that if the facility upgrade did not occur, Volvo of Orange County would be at a <br />competitive disadvantage as compared to other Volvo dealerships in the region. <br />Currently, Volvo of Orange County is one of the top 50 sales tax generators for the City, while <br />other dealers in the Auto Mall are in the top 10. Since 2011, Volvo of Orange County saw a nine <br />percent decrease in sales, while other dealers experienced considerable increases in their sales. <br />Improvements to their facility will only enhance their prosperity for the future. <br />2513-1 <br />