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HomeMy WebLinkAbout2010-06-22 - AGENDA REPORTS - ENTERPRISE ZONE REQUEST (2)Agenda Item: 65? W CITY OF SANTA CLARITA AGENDA REPORT NEW BUSINESS City Manager Approval: Item to be presented by: Jason Crawford DATE: June 22, 2010 SUBJECT: CONSIDERATION OF REQUEST MADE BY THE SANTA CLARITA VALLEY ECONOMIC DEVELOPMENT CORPORATION RELATING TO THE STATE ENTERPRISE ZONE PROGRAM DEPARTMENT: City Manager's Office RECOMMENDED ACTION City Council support the SCVEDC request to submit an application on September 15, 2010 for a joint City/County Enterprise Zone. The level of support recommended includes providing the consultant hired by the SCVEDC a copy of the 1,000+ page application package completed by Staff in 2006. No City funds or staff time will be provided. BACKGROUND At the June 8, 2010, City Council meeting Mayor Weste requested Staff agendize a discussion relating to the Enterprise Zone program in the Santa Clarita Valley. Mr. Damian Jones, speaking on behalf of the Santa Clarita Valley Economic Development Corporation (SCVEDC), elaborated on Mayor Weste's comments and requested the City consider providing support for a joint application for an Enterprise Zone that would include unincorporated areas of Los Angeles County, including the Valencia Commerce Center. The Enterprise Zone program continues to be one of the most successful business attraction and retention tools the City of Santa Clarita has to offer. Since being designated as an Enterprise Zone in 2007, over 200 Santa Clarita businesses take advantage of this program, 1,700 jobs have been created or retained as a result, and over $60 million in state tax savings has been realized for local businesses. There is a unique opportunity available to receive a designation from the California Department I'PROVED of Housing and Community Development (HCD). The Enterprise Zone program's governing legislation authorizes HCD to designate 42 Enterprise Zones, each for a period of 15 years. When a Zone's 15 year period expires, HCD begins the process of designating new Enterprise Zones. In 2010, two of the 42 Enterprise Zones will expire and a competitive application process is currently underway. Applications are due September 15, 2010. The City of Santa Clarita in partnership with Los Angeles County and the Santa Clarita Valley Economic Development Corporation could provide a joint application for one of the two available Enterprise Zone designations. If the application was successful, the new zone would replace the current Santa Clarita Enterprise Zone boundaries with the boundaries of the newly designated Enterprise Zone. The application submitted would compete with the other applications and must rank in the top two among all applicants in order to be successful. The third ranking application would likely also be designated as an Enterprise Zone to replace the previous Santa Clarita Enterprise Zone and maintain the 42 designations outlined by applicable law. A new designation would allow the City and County to create a new zone to include eligible areas not currently in the City's Enterprise Zone. The City's current Enterprise Zone encompasses over 97 percent of the City's eligible properties. Potential areas in the City that may be added during this process include: • Northpark Shopping Center • Haskell Canyon Plaza • Plum Commerce Center Additionally, areas outside City limits in unincorporated Los Angeles County could be added, including the following areas: • Valencia Commerce Center • Magic Mountain • Sunset Pointe • Valencia Marketplace • Sterling Gateway (proposed) • Disney/ABC Studios at the Ranch (proposed) • Vista Canyon Ranch (proposed) If the joint application was successful, a new expiration date would be issued extending the life of the current Enterprise Zone program. If the joint application was not successful, the City would retain its current Enterprise Zone status. The process of being designated an Enterprise Zone is a time consuming and costly endeavor. When the City went through the process in 2006, more than thirty staff members and a paid consultant spent over six months completing the requirements to submit the application package, in addition to a significant amount of time from dedicated community partners, including College of the Canyons, Santa Clarita Valley Chamber of Commerce, and the Valley Industrial Association. The time available to complete the SCVEDC's request would be less than three o2 months. This round of Enterprise Zones will likely be extremely competitive. At the time of the City's designation, there were 23 opportunities available. In this round of designations, only two are available. The next opportunity is expected to be in the 2012 designation round, where two Enterprise Zones will expire. The SCVEDC would facilitate the proposed application process, including hiring a consultant to assist with the application preparation and fund costs associated with a consultant. It is the intention of the SCVEDC to obtain the funds for the consultant from direct support and sponsorship from local businesses. Proposals received by the SCVEDC to complete the application range from $75,000 to $120,000. In addition to consultant costs, there will also need to be a commitment from both the County of Los Angeles and the City to provide the pertinent information to the consultant. The County has indicated that they are committed to providing assistance with the application process by providing the data to the consultant and limited staff resources only. The County will not be providing direct funds to support the consultant hired by the EDC. If the application is successful, the County proposes to split the administration of the enterprise zone, with the County administering the enterprise zone within the unincorporated areas and the City within the city limits. The County operation would be based out of Monterey Park, the same location where their East Los Angeles Enterprise Zone is currently being administered. Staff recommends City Council support the SCVEDC request to submit an application on September 15, 2010 for a joint City/County Enterprise Zone. The level of support recommended includes providing the consultant hired by the SCVEDC a copy of the 1,000+ page application package completed by Staff in 2006. No City funds or staff time will be provided. The consultant hired by the SCVEDC will need to update the information contained in that package and merge with data provided by the County in order to complete the application. Additionally, the County indicated they would take the lead on preparing the California Environmental Quality Act (CEQA) analysis as well as providing the necessary maps. If City Council agrees to move forward with the SCVEDC's request and the application submitted is successful, the City would continue to administer the program for businesses in City limits. ALTERNATIVE ACTIONS Other action as determined by City Council. FISCAL IMPACT There is no fiscal impact as a result of this item. 13