HomeMy WebLinkAbout2012-03-13 - AGENDA REPORTS - ECONOMIC GROWTH PGM (2)Agenda Item: I"
CITY OF SANTA CLARITA
AGENDA REPORT
NEW BUSINESS City Manager Approval:
Item to be presented by: Ken Pulskamp
DATE: March 13, 2012
SUBJECT: SANTA CLARITA ECONOMIC GROWTH PROGRAM
DEPARTMENT: City Manager's Office
RECOMMENDED ACTION
City Council approve the Santa Clarita Economic Growth Program and direct staff to move
forward with its implementation.
BACKGROUND
Per the City Council's commitment to support the local economy, the 21 -Point Business Plan for
Progress program was created in 2009, and aimed to enhance local business partnerships,
encourage quality job creation in the area, and develop marketing programs to bolster retail
spending and attract external dollars to the community.
The Plan was a collaborative effort joined by partners in the community including the Santa
Clarita Valley Chamber of Commerce, Valley Industry Association, College of the Canyons, and
Santa Clarita Valley Economic Development Corporation.
Following the successes of this plan, the Santa Clarita Economic Growth Program will continue
this momentum and work to help local businesses, spur the economy, and generate jobs for
residents. Many details of the programs included were refined based upon feedback and
evaluation of the successes of the 21 -Point Plan.
There are eight programs included in the Santa Clarita Economic Growth Program:
1. Unified Development Code (UDC) Update
City staff is conducting meetings with local businesses to receive input on changes to the UDC to
reduce both the cost and bureaucracy for non-residential projects. Some examples of potential
updates to the UDC include:
• Reducing non -adjacent appeals to Planning Commission
• Extending expiration dates for project approvals
• Modifying the Minor Use Permit (MUP) process to streamline review
• Making the UDC document as a whole more user-friendly
• Incorporating One Valley One Vision (OVOV) policies into the document
• Establishing a corridor plan for Lyons Avenue and Soledad Canyon
It is anticipated that these changes will be brought to City Council later in the year. The intent is
to streamline the process to allow for appropriate projects to move more quickly, saving the
businesses time and money and ultimately resulting in the business opening sooner.
Cost: N/A
2. Development Fee Deferment
As part of the 21 -Point Plan, the City Council deferred the collection of Quimby, B&T, and
Transit Impact fees until later in the development process, at the building permit issuance, to help
businesses access the necessary funds early in the process to start projects. Helping projects to
get started today assists with creating construction jobs now. In the case of office and industrial
projects, it leads to permanent jobs sooner. The City Council has temporarily extended this
program through June 30, 2012, and the recommendation is to continue the extension of fee
deferment through June 20, 2013.
Cost: N/A
3. Use Tax Rebate Program Partnership
The Use Tax Rebate program was created as part of the 21 -Point Plan and results in new revenue
to the City. A business that makes significant out-of-state purchases, thereby generating `use
tax,' and completes the appropriate paperwork, allows the City to receive the full I% of that tax,
rather than a formula allocation that provides only approximately 3% of that 1%.
The City currently motivates local businesses to participate in the program by refundinga
percentage of that money back to the participating business, resulting in new money to the City
and to the business.
Currently, there are two options available to businesses that take advantage of the Use Tax
Rebate Program with the City:
1) Cash Rebate equal to 30% of the net new use tax
2) Business Expansion Credit equal to 50% of the net new use tax generated
Participation by local businesses has not been as strong as the City would like to see. To help
market the program to the businesses, and hopefully increase participation, this new program
allows for a `commission' to be paid to an organization that secures a businesses participation.
That organization would received 10% of the new monies, 5% from the City and 5% from the
business.
Under the new proposed Use Tax Rebate Partnership Program the options would be revised, if a
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consultant is responsible:
1) Cash Rebate — 25% Business, 10% Organization, 65% City
2) Business Expansion Credit — 45% Business, 10% Organization, 45% City
It is recommended that the City partner with Santa Clarita Valley Chamber of Commerce, Santa
Clarita Valley Economic Development Corporation, and Valley Industry Association, among
other local organizations to market the Use Tax Rebate program to businesses.
Cost: N/A; potential increase in revenue
4. Film Local
City Council created a location film incentive as part of the 21 -Point Plan. To date, local
productions have saved over $140,000 on their permit fees and 2011 was the most filmed year
for Santa Clarita. The program has already been extended through June 30, 2012, but staff
recommends extending the Film Incentive Program until June 30, 2015. Doing so would provide
greater confidence in the program to productions relocating to studios in Santa Clarita, thus
increasing the amount of film -related jobs in the community.
Cost: $50, 000 for FY 12-13, and $50, 000 each FY 13-14 and FY 14-15 (General Fund)
5. Movie Ranch Overlay Zone
City Council created a Movie Ranch Overlay Zone in 2011. The City has been approached by a
number of movie ranches adjacent to City boundaries, in the north Saugus area, about being
included in the zone. It is recommended that the City subsidize the cost for these movie ranches
to be annexed into the City.
The Movie Ranch Overlay Zone designation reinforces confidence in the pro -filming emphasis
of the City, guaranteeing the City's commitment and stability to the film industry. This
ultimately provides an incentive for film productions to relocate to Santa Clarita, thereby creating
film -related jobs.
Cost: up to $60, 000 (General Fund)
6. Conference Center
There has been discussion of building a conference center in Santa Clarita for many years. The
City hired PKF Consulting to conduct a feasibility study last year and their analysis concluded
that there was sufficient demand for a 40,000-60,000 square foot facility that could be designed
to meet the needs of the local community and regional business demand.
The next step in the process is to form a Master Plan of the proposed project.
Phase 1 — Site Selection
Phase 2 — Master Plan, conceptual design, elevations, simulations
Phase 3 — Funding recommendations
Conceptual .ideas will be obtained through the master plan process and deemed feasible by the
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PKF report into a general design of a conference center on the recommended site. This provides
City Council with community input opportunity on a general design of the conference center,
including elements that may be included (i.e. incorporating arts center, sports uses) and also
show how it will work in the location.
Similar to the master plan process for a community park, recreation center, or library, inclusion
of as many stakeholders in the process as possible will result in the best design/structure for its
users. While the PKF feasibility study did include some feedback from stakeholders such as
hotels, staff, and tourism partners, we will need to expand upon this process prior to the
architectural build out to include all community interest.
This would also include further research on funding options. Conference centers generate room
nights at local hotels, provide local venues for residents and businesses, create jobs, increase
visitation and subsequently revenues and tax dollars to the city and bolster city identity while
improving market position within the county. Given low or negative Internal Rate of Return,
funding options that would be explored include public/private partnerships such as bond
issuance, cash contribution, increase in TOT or other assessment, TOT redirection, property tax
abatement, favorable ground lease terms, etc.
Cost: $50, 000 (Tourism Marketing District Fund)
7. Business Incubator
Business incubators and accelerators provide essential resources and counsel that entrepreneurs
need to become successful, self-sufficient businesses. Additionally, they reduce the risk of failure
by offering affordable space and shared facilities along with an array of advisors that are
invaluable for companies just starting out. Incubators offer management guidance, technical
assistance, and consulting tailored to young, growing companies as well as providing clients
access to appropriate space, shared basic business services and equipment technology, support
services and assistance in obtaining the financing necessary for company growth.
Incubator graduates create jobs, revitalize neighborhoods, and commercialize new technologies
thus strengthening the local economy. Research has shown that for every $1 of estimated public
operating subsidy provided the incubator, clients generate approximately $30 in local tax
revenue. Approximately 84% of incubator graduates stay in their community and the National
Business Incubator Association (MBIA) reports that 87% of all firms that graduated from
incubators are still in business after five years.
Under this program, the City would partner with College of the Canyons (COC) and the Small
Business Development Center (SBDC) to provide space and support for business start-ups. COC
would provide on-site business start-up counseling through grant funding and the SBDC would
provide regular workshops, guidance and access to business mentors, investors. The City would
provide the space and pay for the utilities to incubate up to 10 start-up businesses, focusing on
the creative/technology businesses sector.
An ideal location for the business incubator is. in Old Town Newhall, to tie in with the larger
plans of transforming the area into an arts and entertainment district. There are other potential
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opportunities to partner with California Institute of the Arts, as their graduates could fall in our
targeted "creative" industries, including animation, special effects, and video gaming.
The recommendation is to fund the program for three years and then evaluate successes.
Cost: $90, 000 for FY 12-13, up to $50, 000 each FY 13-14 and FY 14-15 (CDBG Funds)
8. County Business Licenses
Los Angeles County currently issues business licenses for approximately 125 business types in
Santa Clarita. Of these, staff feels that 12 of the business types, including massage parlors, pawn
shops, tattoo -piercing, and adult businesses need greater regulation and inspections. .
The increase in staff time will result in increased fees to recoup costs. The remaining 100+
businesses would benefit from a streamlined process, less bureaucracy, and reduced fees. Staff
recommends replacing the County Business License with a City -issued Community Preservation
Permit.
This will streamline the process and allows for the appropriate oversight from the City, which
will benefit the businesses such as restaurants, book stores, auto repair, and arcades by reducing
fees and regulations, allowing businesses to better focus on their core business.
Cost: N/A revenue neutral
Upon approval of the Program, staff will work with our community partners such as the Chamber
of Commerce, Valley Industry Association, and the S.C.V. Economic Development Corporation,
to refine the components and seek opportunities to partner and collaborate.
ALTERNATIVE ACTIONS
Other action as determined by Council.
FISCAL IMPACT
All money will be requested to be appropriated through the budget process.
The fiscal impact for FY 12-13 is:
$ 110,000 General Fund
$ 90,000 Community Development Block Grant
$ 50,000 Tourism Marketing District
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