75A - PH 75 FT DIGITAL PYLON AUTO MALL

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Zoning Ordinance Amendment No. 2017-03 — Amend Specific Development No. 60 for Santa Ana Auto Mall Digital Sign October 17, 2017 Page 3 The Sign is estimated to increase revenue for the Auto Mall which is projected to increase approximately 8% to 12% (Exhibit D) of Sales Tax for the City. A review of the previously completed five fiscal years disclosed the average sales tax received by the City (from the Auto Mall) is approximately $2.8 million. An analysis conducted by the Auto Mall anticipates the Loan to be repaid the City (General Fund) in approximately six years. The assistance requested by the Auto Mall is as follows: • Payment of the Sign - $1,032,948 • Term - 10 years • Payable - 50% increase in Sales Tax over Base Year • Base Year - Calendar Year 2016 • Other — Remaining loan balance will be repaid by the Auto Mall if increase in Sales Tax is not incurred As noted if the projected sales tax increase is not received by the City, the Auto Mall will be responsible for repaying the remaining loan balance at the end of the loan term including accrued interest. Funding of the Loan The Loan to the Auto Mall will be funded, from the City's Operating Reserve which as of June 30, 2017 maintained a balance of $42,397,974. The funding of this loan will reduce the Operating Reserve•to $41,364,446. When the repayment of the Loan occurs, via fifty percent of the sales tax received over and above the base year, the Operating Reserve will be increased by the amount of the repayment earned in the given year. Payment to EMI Signs EMI (Electric Media, Inc.) is the vendor designated by the Auto Mall to demolish the existing sign; and install the new sign (see Exhibit E). The City's sole responsibility is to furnish payment on behalf of the Auto Mall. Subsequently the Auto Mall will be responsible for the operation, maintenance and liability of the Sign. As noted above, the Sign costs will be $1,032,948. In addition, Auto Mall has also agreed to provide the City access to sign for the purpose of marketing City sponsored events (e.g. Council or Commission or Special events). The programming would assist in increasing notification efforts to the public for City business and recreational events. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #3 - Economic Development, Objective #2 (create new opportunities for business/job growth and encourage private development through new General Plan and Zoning Ordinance policies). 75A-3