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Home My WebLink About25E - DOWNTOWN MERCHANTS FUNDREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: DECEMBER 3, 2019 TITLE APPROVE SECOND AMENDMENTS TO 2020 DOWNTOWN MERCHANTS FUND OPERATING AGREEMENTS WITH DOWNTOWN INC. AND SANTA ANA BUSINESS COUNCIL ($100,000 PER ORGANIZATION) {STRATEGIC PLAN NO. 3, 4F} /s/Kristine Ri CITY MANAGER CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 111 Reading ❑ Ordinance on 2" ° Reading ❑ Implementing Resolution ❑ Set Public Hearing For_ CONTINUED TO �1��►1�1�1:3q:7 RECOMMENDED ACTION 1. Authorize the City Manager to execute the Second Amendment to the Downtown Merchants Fund Operating Agreements for Downtown Inc. in the amount of $100,000 for the period of January 1, 2020 through December 31, 2020, subject to non -substantive changes approved by the City Manager and City Attorney. 2. Authorize the City Manager to execute the Second Amendment to the Downtown Merchants Fund Operating Agreement with Santa Ana Business Council in the amount of $100,000, for the period of January 1, 2020 through December 31, 2020, subject to non - substantive changes approved by the City Manager and City Attorney. DISCUSSION On August 4, 2015, the City Council adopted the Downtown Enhancements and Parking Modernization Plan to address the need to modernize parking structures, enhance public amenities, and address deferred maintenance in the downtown. As part of the Plan, downtown business associations and stakeholders agreed to an increase in parking rates and the implementation of new smart meters in the downtown area with the understanding that increased revenue from these new rates and smart meters would be reinvested back into the downtown. As part of the Plan, it was proposed that a Downtown Merchants Validation Fund be created to fund a validation program for participating business and merchants to reward their customers for using the parking structures. Before implementation, both merchant groups and the City staff determined that a validation program was not feasible due to the administrative burden of such a program. It was recommended that the funds be used by Downtown Inc. and Santa Ana Business Council for continued promotion and marketing of the downtown to complement the annual Business Improvement District funds. 25E-1 Downtown Merchants Fund 2020 December 3, 2019 Page 2 On December 18, 2018, the City Council approved agreements with Downtown Inc. and Santa Ana Business Council in the amount of $100,000 per organization, for the Merchants Fund in lieu of the validation program. These agreements allow for automatic renewal of the terms on a yearly basis upon City Council approval of budgets. The proposed 2020 Merchants Fund Budgets in the amount of $100,000 per organization have been submitted for City Council consideration (Exhibit 1 & 2). Upon City Council approval, this funding will continue to support strong marketing efforts and will allow for successful year-round administration of events for the Downtown as well as additional support during the OC Streetcar construction. In Fiscal Year 2018-19, the Merchants Fund complimented the Business Improvement District funding and brought successful events and promotions that drew thousands of visitors to Downtown Santa Ana. These events and promotions have had significant success through: Monthly First Saturday Artwalk, Savor Santa Ana, Boca De Oro Literary Festival, Santa Ana Media Summit, Santa Ana Sidewalk Sales, and the Downtown Santa Ana newsletter and outreach. Additionally, the funds complement the Downtown Bridal Association, Restaurant Association, Arts Association, and other downtown stakeholder meetings. STRATEGIC PLAN ALIGNMENT Approval of this item allows the City to meet Goal #3 - Economic Development, Objective 4 (Continue to pursue objectives that shape downtown Santa Ana into a thriving, culturally diverse, shopping, dining, and entertainment destination), Strategy F (Partner with downtown business and merchant associations to program events that showcase restaurants, shopping and entertainment venues). FISCAL IMPACT Funds in the amount of $100,000 are available in the Downtown Enhancements and Parking Modernization Plan account (no. 02710133-62300) for expenditure in FY 19-20. Funds in the amount of $100,000 for the second half of the agreement term will be included and budgeted in the FY 20-21 budget. APPROVED AS TO FUNDS AND ACCOUNTS: Steven A. Mendoza Kathryn Downs, CPA Executive Director Executive Director Community Development Agency Finance and Management Services Agency Exhibits: 1. Second Amendment Merchant Fund for Downtown Inc. 2020 2. Second Amendment Merchant Fund for Santa Ana Business Council 2020 25E-2 EXHIBIT 1 SECOND AMENDMENT TO THE DOWNTOWN MERCHANTS FUND OPERATING AGREEMENT FOR DOWNTOWN INC. THIS SECOND AMENDMENT TO THE DOWNTOWN MERCHANTS FUND OPERATING AGREEMENT is entered into this Yd day of December, 2019, by and between the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California ("City"), and the Downtown Inc., a California non-profit corporation ("DTI"). RECITALS A. On January 10, 2018, the City entered into the Downtown Merchants Fund Operating Agreement #A-2017-326 with DTI to create the Downtown Merchants Fund ("DMF") from a portion of downtown parking revenues for continued promotion of the downtown ("said Agreement"). The intent of said Agreement is for DTI to receive $100,000 from the DMF each calendar year that such funding is approved by City Council. B. On December 18, 2018, the City entered into a First Amendment to said Agreement with DTI in order to extend the term, add funding, and incorporate the annual budget for 2019. C. The City hereby approves an additional $100,000 in DMF funds for use by DTI in 2020 pursuant to the terms and conditions of said Agreement. Additionally, the City hereby approves DTI's 2020 DMF Annual Budget. D. In accordance with the terms and conditions of said Agreement, the parties desire to amend said Agreement to extend the term of said Agreement, add an additional $100,000 in DMF funding for the extended term of said Agreement, and incorporate DTI's 2020 DMF Annual Budget into said Agreement. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions of said Agreement, except as herein modified, the parties agree as follows: 1. Pursuant to the terms of said Agreement, the City Council approved an additional $100,000 in DMF funding for the 2020 calendar year to be utilized by DTI pursuant to DTI's 2020 DMF Annual Budget and the terms of said Agreement. 2. Section 1.02, Term, shall be amended to read as follows: "This Agreement shall commence on the date first written above and terminate on December 31, 2020, unless terminated earlier in accordance with sections 4.02 or 4.05 below." 3. Section 2.01, Annual Budget and Program Report, subsection (a), shall be amended to reflect the City's approval of DTI's 2020 DMF Annual Budget, a true and correct copy of which is attached hereto as Exhibit A and incorporated herein by reference. 25E-3 EXHIBIT 1 4. Except as hereinabove modified, the terms and conditions of said Agreement remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Approval and Amendment to said Agreement the date and year first above written. F.VU-1: &19 DAISY GOMEZ Clerk of the Council APPROVED AS TO FORM: Sonia R. Carvalho City Attorney gjAt::� Ryid O. ge Assistant City Attorney RECOMMENDED FOR APPROVAL: STEVEN A. MENDOZA Executive Director Community Development Agency CITY OF SANTA ANA KRISTINE RIDGE City Manager DOWNTOWN INC.: Ryan Chase President 25E-4 EXHIBIT 1 EXHIBIT A DOWNTOWN MERCHANTS FUND 2020 DOWNTOWN INC. ANNUAL BUDGET LINE ITEMS SUBLINE ITEMS BUDGET Expenditure Plan Personnel 42,500.00 Insurance 2,500.00 Technology 5,000.00 Office Supplies 1,000.00 Communication 7,500.00 Events/Marketing Savor2020 2,500.00 Holidays 3,500.00 Arlwalk/Arts i 12,000.00 Popups 4,000.00 i Meetings ? 4,000.00 Training/Education 1 250.00 Dues & Subscriptions E 1,250.001 .... _.... _.......................... _........... ..... ........... ........... .... ..... ..... ...... ..... ....... ... ..... ..... ....... ..... ..... ..... ..... ..... ..... ..... _ F... .... ..... ..... ..... ..... ..... ..... ......... ..... ..... _i Professional/Contractors i 10,000.00 i ._.............._................__................_...._...._...._...._...._...._........._._...._...._.........._...._...._...._............_...._...._...._...._F.._...._...._...._..__...._..__.._...._..__...._...._� Audits/Financial Reports ..... ..... ..... .... ..... ...... .... ...... ..... ........... .... ..... .... ..... ...... .................. _.._...._............ ..... ..... ..... ..... _.... i ..... .... .. ..._...._...._...._...._...._...._........__.._...._.. I 4,250.001, Misc. Expenses ! 750.001. TOTAL 100,000.00 ! 25E-5 EXHIBIT 2 SECOND AMENDMENT TO THE DOWNTOWN MERCHANTS FUND OPERATING AGREEMENT FOR SANTA ANA BUSINESS COUNCIL THIS SECOND AMENDMENT TO THE DOWNTOWN MERCHANTS FUND OPERATING AGREEMENT is entered into this 3'a day of December, 2019, by and between the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California ("City"), and the Santa Ana Business Council, a California non-profit corporation ("SABC"). RECITALS A. On January 11, 2018, the City entered into the Downtown Merchants Fund Operating Agreement #A-2017-327 with SABC to create the Downtown Merchants Fund ("DMF") from a portion of downtown parking revenues for continued promotion of the downtown ("said Agreement"). The intent of said Agreement is for SABC to receive $100,000 from the DMF each calendar year that such funding is approved by City Council. B. On December 18, 2018, the City entered into a First Amendment to said Agreement with SABC in order to extend the term, add funding, and incorporate the annual budget for 2019. C. The City hereby approves an additional $100,000 in DMF funds for use by SABC in 2020 pursuant to the terms and conditions of said Agreement. Additionally, the City hereby approves SABC 's 2020 DMF Annual Budget. D. hi accordance with the terms and conditions of said Agreement, the parties desire to amend said Agreement to extend the term of said Agreement, add an additional $100,000 in DMF funding for the extended term of said Agreement, and incorporate SABC's 2020 DMF Annual Budget into said Agreement. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions of said Agreement, except as herein modified, the parties agree as follows: 1. Pursuant to the terms of said Agreement, the City Council approved an additional $100,000 in DMF funding for the 2020 calendar year to be utilized by SABC pursuant to SABC 's 2020 DMF Annual Budget and the terms of said Agreement. 2. Section 1.02, Term, shall be amended to read as follows: "This Agreement shall commence on the date first written above and terminate on December 31, 2020, unless terminated earlier in accordance with sections 4.02 or 4.05 below." 25E-6 EXHIBIT 2 Section 2.01, Annual Budget and Program Report, subsection (a), shall be amended to reflect the City's approval of SABC's 2020 DMF Annual Budget, a true and correct copy of which is attached hereto as Exhibit A and incorporated herein by reference. 4. Except as hereinabove modified, the terms and conditions of said Agreement remain unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Approval and Amendment to said Agreement the date and year first above written. ATTEST: DAISY GOMEZ Cleric of the Council APPROVED AS TO FORM: Sonia R. Carvalho City Attorney RyAdO. H ge Assistant City Attorney RECOMMENDED FOR APPROVAL: STEVEN A. MENDOZA Executive Director Community Development Agency CITY OF SANTA ANA KRISTINE RIDGE City Manager SANTA ANA BUSINESS COUNCIL.: l I � Rdul Yank President 25E-7 EXHIBIT 2 EXHIBIT A DOWNTOWN MERCHANTS FUND 2020 SANTA ANA BUSINESS COUNCIL ANNUAL BUDGET SUBLINE ITEMS BUDGET Expenditure Plan Professional/Contractors 46,950.00 Professional Services 7,800.00 Office & Administration 700.00 Books & Subscriptions 600.00 Meetings & Education 3,750.00 Printing 3,000.00 Events/Marketing Regional Food Event Savor202O 2,500 Regional Education Event Boca de Oro 2,500 Regional Media Event ke: Santa Ana Media Summit 1,500 City Wide Arts Event Le: Art Round Tables 1,000 Downtown Business Event Downtown Annual Forum 2,500 Downtown Retail Event ke: Bridal Expo 2.500 Educational Pipeline Event i.e: Downtown Threads Fashion Show 2,000 Downtown Place Making i.e: Banners, Plants, Parklets, Lights 2,500 City Wide Community Event i.e: Santa Ana Street Breakfast 2.500 Miscellaneous Event Pop-Up/Event Opportunity 2,000 Marketing 10,000.00 Sponsorships S,700.00 TOTAL 100,000.00 25E-8