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65C - SALES TAX LOAN AGMT
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01/16/2018
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65C - SALES TAX LOAN AGMT
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1/11/2018 7:13:16 PM
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1/11/2018 7:05:16 PM
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City Clerk
Doc Type
Agenda Packet
Agency
Community Development
Item #
65C
Date
1/16/2018
Destruction Year
2023
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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />JANUARY 16, 2018 <br />TITLE: <br />RECEIVE AND FILE REPORT REGARDING <br />PROPOSED SALES TAX LOAN AGREEMENT <br />BETWEEN THE CITY OF SANTA ANA AND THE <br />SANTA ANA AUTO DEALERS ASSOCIATION <br />(STRATEGIC PLAN NO. 3,3C) <br />7 <br />CITAIANAGER <br />RECOMMENDED ACTION <br />Receive and File. <br />DISCUSSION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on 151 Reading <br />❑ Ordinance on 2nd Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For_ <br />CONTINUED TO <br />FILE NUMBER <br />On November 7, 2017, the City Council authorized the City Manager and Clerk of the Council to <br />execute a Sales Tax Loan Agreement between the City of Santa Ana and the Santa Ana Auto <br />Dealers Association, LLC. The Agreement provided for the City to loan the Association <br />$1,032,948 to replace the existing Auto Mall digital sign. The Agreement further provided for the <br />loan to be repaid from increased sales tax received over a 10 year period. The proposed source <br />of funds for the loan was the City's General Fund Operating Reserve. <br />It was brought to staffs attention that prior to the City approving the subsidy for the Auto Mall <br />sign, Government Code Section 53083 requires that the City must hold a public hearing and <br />provide to the public in written form an economic development subsidy report detailing the <br />proposed subsidy. This subsidy report contains information relating to the terms of the <br />agreement, a description of the economic subsidy (including estimated total amount of <br />expenditure of public funds), a public benefit statement, projected tax revenue as a result of the <br />subsidy and the estimated number of jobs that will be created by the subsidy. <br />Since starting in November, the City Manager has reviewed the City's financial outlook. Based <br />upon that review, staff recommends that the structure of the proposed transaction be modified. <br />In lieu of the previously proposed city loan to be repaid from increased sales tax receipts, on <br />February 6th, subject to acceptance by the Santa Ana Auto Dealers Association of the modified <br />terms, staff will propose a new sales tax reimbursement agreement, without an upfront City loan, <br />for City Council consideration. <br />65C-1 <br />
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