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HomeMy WebLinkAbout2021-05-25 - AGENDA REPORTS - SCEDC CONTR (2)O Agenda Item: 4 P CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR CITY MANAGER APPROVAL:1 DATE: May 25, 2021 SUBJECT: CONTRACT EXTENSION WITH THE SANTA CLARITA ECONOMIC DEVELOPMENT CORPORATION DEPARTMENT: Community Development PRESENTER: Jason Crawford RECOMMENDED ACTION City Council: 1. Authorize expenditures for the renewal of support for the Santa Clarita Valley Economic Development Corporation for three consecutive Fiscal Years (FY 2021-22, FY 2022-23, FY 2023-24) in the amount of $200,000 annually. 2. Authorize the City Manager or his designee to negotiate and execute a three-year renewal agreement with the Santa Clarita Valley Economic Development Corporation, subject to City Attorney approval. BACKGROUND On November 10, 2009, the City Council approved an agreement between the City of Santa Clarita (City) and the Santa Clarita Valley Economic Development Corporation (SCVEDC) in the amount of $200,000 for initial start-up costs and creation of a local economic development corporation. Subsequently, the City Council has consistently approved additional annual investments in the amount of $200,000. Beginning in 2013, the City Council authorized three- year commitments to provide the SCVEDC with financial certainty in order to strategically plan for the future. Since its inception, the SCVEDC has been instrumental in business attraction, business retention, job creation opportunities, and support for the local startup community. The SCVEDC focuses on target industries, including biomedical and medical devices, aerospace and defense, advanced manufacturing, digital media and entertainment, and information technology. In their report to the City Council on March 9, 2021, the SCVEDC included highlights of the noteworthy business attraction and expansion projects, such as: Page 1 Packet Pg. 29 O • Santa Clarita Studios and L.A. North Studio expansions to add new soundstages, bringing the total to over 40 soundstages in City. • Illumination Dynamics, a rental and services provider of lighting and power generation equipment for filming, sports broadcastings, and special events markets, securing a 67,600 square -foot state -of -the art facility, with 40 new jobs. • Bay Center Foods, a highly -automated foods processing facility owned by Chick-Fil-A, securing a 187,540 square -foot state -of -the art facility, with 100 new jobs. • Lief Labs expansion, a premier formulation, product development, and manufacturer of dietary supplements, with 170 employees. • Two Amazon fulfillment centers that total 255,000 square feet of warehouse space and support up to 580 new jobs in the facilities. • DrinkPak, a premiere West Coast contract manufacturer of premium alcoholic and non- alcoholic beverages, securing a 572,419 square -foot of state -of -the art contract manufacturing facility, with 200 new jobs. • Spencer Aerospace Manufacturing, an industry leader in high -precision hydraulic fluid fitting, expanded their operation into a 46,275 square -foot facility, resulting in 70 new jobs. SCVEDC has also continued expansion of its Business Assistance program to serve local businesses, including the launch of a free job board, LiveWorkSCV.com, to connect local talent with Santa Clarita job opportunities. With the onset of the COVID-19 pandemic in 2020, SCVEDC's business assistance efforts shifted to supporting and servicing businesses spanning retail, restaurant, hospitality, and other consumer -facing businesses, in addition to companies in their target industries of advanced manufacturing, medical devices, entertainment and digital media, and technology. The SCVEDC also partnered with the City on the 2020 Santa Clarita Small Business COVID Relief Grant Program, aimed to help local small businesses by providing a one-time financial reimbursement up to $5,000 for expenses incurred from business interruption due to COVID-19 impacts. The SCVEDC increased their contribution to ensure every eligible business that applied within City limits and in the unincorporated areas of Los Angeles County could receive funding. The overall financial goal of the SCVEDC is to continue to raise private capital so as to decrease the amount of public capital investment needed to support the organization. By working through the SCVEDC, business and community leaders are supporting regional economic development. Each member of the SCVEDC Board is also an investor, sharing his or her time, financial support, and leadership ability. The expectation continues to be that the SCVEDC's efforts complement the City's efforts and do not compete with the existing economic development efforts and investments of the City, Los Angeles County, the Chamber of Commerce, the Valencia Industry Association, and College of the Canyons, as well as the commercial real estate professionals involved in economic Page 2 Packet Pg. 30 O development efforts in the Santa Clarita Valley. Additionally, it is expected that the City will obtain a return on its investment that is greater than the annual commitments through the matching commitments and leveraging of public and private dollars. In 2009, when support for the SCVEDC was first approved by City Council, the intention was that public sector investment would decrease as private sector funding increased. Any future investment beyond this agreement would be determined by the City Council and would be contingent upon the measurable successes of the SCVEDC, future City priorities, and the amount of public and private capital raised to support the organization. The letter from the SCVEDC requesting a contract extension for three consecutive fiscal years (FY 2021-22, FY 2022-23, and FY 2023-24), and the Sponsorship Agreement between the City and the SCVEDC are attached for reference. ALTERNATIVE ACTION Other actions as determined by City Council. FISCAL IMPACT Adequate funds are available in the base budget for Expenditure Account 11301-5171.005 (Economic Incentives Programs) to support the recommended action. Payment is contingent upon successful annual updates to the City Council, pursuant to the terms of the agreement. ATTACHMENTS Letter - SCVEDC Request for Contract Extension SCVEDC Sponsorship Agreement Page 3 Packet Pg. 31 4.a May 10, 2021 Mr. Ken Striplin City Manager, City of Santa Clarita 23920 Valencia Blvd. Santa Clarita, CA 91355 Dear Ken, In the years since the Santa Clarita Valley Economic Development Corporation was formed, SCVEDC has become the leading business organization in the Santa Clarita Valley focused on growing the job base. SCVEDC has become a vital community resource, actively working to chart a course for the future prosperity of the Santa Clarita Valley. SCVEDC focuses on four priorities: 1) Business Attraction and Expansion, particularly to attract our target business clusters of Aerospace & Defense, Medical Devices, Advanced Manufacturing, Information Technology, and Digital Media & Entertainment. We also seek Corporate HQ and the professional services firm needed to service our business community. 2) Business Assistance and Retention, to support growth in local business and identify at -risk companies. 3) Community Marketing, to help business leaders inside the Valley and beyond understand why the Santa Clarita Valley is Still Golden'. 4) Economic Information, to provide our leaders with the information they need to make decisions for future success of their businesses and for our Valley. As a partnership between the City of Santa Clarita, the County of Los Angeles, local business leaders, and the College of the Canyons, SCVEDC is positioned to serve as the single point of contact to help businesses access incentives and resources that help them be globally competitive. This structure is uniquely designed to make us the most effective organization we can be. We respectfully request that the City of Santa Clarita renew its support for SCVEDC by authorizing $200,000 annually for the next three years. These funds are matched by an equal amount from the County of Los Angeles and by private sector contributions from the Board of Directors. If desired, we will continue to provide an annual report on accomplishments to the City Council. Thank you for your consideration. Sincerely, w Roger Seaver SCVEDC Co -Chair Calvin Hedman SCVEDC Co -Chair 26455 Rockwell Canyon Road I University Center, Suite 263 1 Santa Clarita, CA 91355 Phone (661) 288-4400 1 Fax (661) 288-4414 1 www.scvedc.org Packet Pg. 32 4.b Sponsorship Agreement between the City of Santa Clarita and the Santa Clarita Valley Economic Development Corporation L Purpose. Pursuant to the direction of the Santa Clarita City Council on May 25, 2021, the City of Santa Clarita ("City"), a municipal corporation, will provide the Santa Clarita Valley Economic Development Corporation ("SCVEDC"), a 501(c)(3) corporation, an investment in the amount up to $200,000 annually for three consecutive fiscal years (FY 2021/2022, FY 2022/2023, and FY 2023/2024). IL Restrictions. This renewal of financial investment in the SCVEDC will be provided as follows: • $200,000 upon full execution of this document for FY 2021/2022. • The SCVEDC will provide the City Council with an annual performance update on accomplishments during a regularly -scheduled City Council meeting. The annual update should take place during the first quarter of every calendar year during the terms of this Sponsorship Agreement (Agreement). • $200,000 upon successful annual update to City Council each year (FY 2022/2023 and FY 2023/2024). • The City reserves the right to terminate the Agreement if the annual performance update is deemed unsatisfactory by City Council. III. Appointment. The SCVEDC agrees and the City hereby accepts a position as a Director on the SCVEDC Board of Directors and as a member of the SCVEDC Executive Committee. The position may be filled by the City Manager or, in the City Manager's absence, the designee of the City Manager. IV. Term. This support is a pledge of a three-year commitment of investment in the following amounts: $200,000 annually for three consecutive fiscal years (FY 2021/2022, FY 2022/2023, and FY 2023/2024), for a total investment amount not to exceed $600,000. IV. Indemnification. The SCVEDC agrees to indemnify and hold the City harmless from and against any claim, action, damages, costs (including, without limitation, attorney's fees), injuries, or liability, arising out of the performance of this Agreement by the SCVEDC. Should the City be named in any suit, or should any claim be brought against it by suit or otherwise, arising out of performance by the SCVEDC of services rendered pursuant to this Agreement, the SCVEDC will defend the City (at the City request's and with counsel satisfactory to the City) and will indemnify the City for any judgment rendered against it or any sums paid out in settlement or costs incurred in defense otherwise. Packet Pg. 33 4.b V. Entire Agreement/Amendments. This Agreement constitutes the entire agreement between the parties and supersedes prior negotiations, drafts, or discussions. Any amendments to this Agreement must be in writing and signed by authorized representatives of the SCVEDC and the City, respectively. SCV Economic Development Corporation Holly Schroeder President and CEO Date: Un Date: City of Santa Clarita Kenneth W. Striplin City Manager Packet Pg. 34