HomeMy WebLinkAbout65C - SALES TAX LOAN AGMTREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JANUARY 16, 2018
TITLE:
RECEIVE AND FILE REPORT REGARDING
PROPOSED SALES TAX LOAN AGREEMENT
BETWEEN THE CITY OF SANTA ANA AND THE
SANTA ANA AUTO DEALERS ASSOCIATION
(STRATEGIC PLAN NO. 3,3C)
7
CITAIANAGER
RECOMMENDED ACTION
Receive and File.
DISCUSSION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 151 Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For_
CONTINUED TO
FILE NUMBER
On November 7, 2017, the City Council authorized the City Manager and Clerk of the Council to
execute a Sales Tax Loan Agreement between the City of Santa Ana and the Santa Ana Auto
Dealers Association, LLC. The Agreement provided for the City to loan the Association
$1,032,948 to replace the existing Auto Mall digital sign. The Agreement further provided for the
loan to be repaid from increased sales tax received over a 10 year period. The proposed source
of funds for the loan was the City's General Fund Operating Reserve.
It was brought to staffs attention that prior to the City approving the subsidy for the Auto Mall
sign, Government Code Section 53083 requires that the City must hold a public hearing and
provide to the public in written form an economic development subsidy report detailing the
proposed subsidy. This subsidy report contains information relating to the terms of the
agreement, a description of the economic subsidy (including estimated total amount of
expenditure of public funds), a public benefit statement, projected tax revenue as a result of the
subsidy and the estimated number of jobs that will be created by the subsidy.
Since starting in November, the City Manager has reviewed the City's financial outlook. Based
upon that review, staff recommends that the structure of the proposed transaction be modified.
In lieu of the previously proposed city loan to be repaid from increased sales tax receipts, on
February 6th, subject to acceptance by the Santa Ana Auto Dealers Association of the modified
terms, staff will propose a new sales tax reimbursement agreement, without an upfront City loan,
for City Council consideration.
65C-1
Sales Tax Loan Agreement with Santa Ana Auto Dealers Association
January 16, 2018
Page 2
STRATEGIC PLAN ALIGNMENT
This item supports the City's efforts to meet Goal #3 Economic Development, Objective #3,
(Promote a solutions -based customer focus in all efforts to facilitate development and investment
in the community), Strategy C (Explore opportunities to encourage a business friendly
environment within the city through the reduction of non-essential regulatory requirements,
improved coordination between agencies for development review and addition of monetary
incentives).
FISCAL IMPACT
There is no fiscal impact associated with this Council action.
R bert M. Z ScKmi de +
Interim Executive ire for
Community Develop—Ment Agency
65C-2