HomeMy WebLinkAboutMINUTES - 11062007 - C.111 TO: BOARD OF SUPERVISORS
Contra
FROM: DENNIS M. BARRY, AICP Costa
COMMUNITY DEVELOPMENT DIRECTOR `,UU�
'J County
DATE: November 6, 2007
SUBJECT: ADOPT Resolution for the joint Application with the City of Pittsburg for a State
Enterprise Zone in the Unincorporated Area of Bay Point and in the City of Pittsburg.
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION
ADOPT Resolution Supporting and Authorizing the submittal of an Application to the
California Department of Housing & Community Development Department
for an Enterprise Zone for the Bay Point area, jointly with the City of Pittsburg; and
AUTHORIZE the Deputy Director— Redevelopment to execute the required documents.
APPROVE the Memorandum of Understanding (MOU) between the County, it's
Redevelopment Agency and the City of Pittsburg for the purpose of submitting an
aNN;;-,ation to the California Department of Housing & Community Development for the
proposed Enterprise Zone and AUTHORIZE the Deputy Director— Redevelopment to
execute the MOU. '
CONTINUED ON ATTACHMENT: X YES SIGNATURE
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDAT N F BOAREYOMMITTEE
APPROVE OTHER
SIGNATURE(S)-.
ACTION OF BOARD ON GoEz PPROVED AS RECOMMENDED
VQTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND
UNANIMOUS(ABSENTt14L)1 CORRECT COPY OF AN ACTION TAKEN AND
AYES: NOES; ENTERED ON THE MINUTES OF THE BOARD OF
ABSENT: ABSTAIN: SUPERVISORS ON THE DATE SHOWN
Contact: Maureen Toms ATTESTED
cc: Community Development(CDD) JOHN CULLEN, CLERK OF THE BOARD OF
County Administrator SUPERVISO S AND COUNTY ADMINISTRATOR
County Counsel
City of Pittsburg
BY DEPUTY
C'. !l
November 6, 2007
Board of Supervisors
Enterprise Zone Application
Page 2
FISCAL IMPACT
NONE to the County. The cost associated with the Application and Administration of
the program is budgeted in the 2007/08 Bay Point Redevelopment Agency budget.
BACKGROUND/REASONS FOR RECOMMENDATION
PURPOSE OF RESOLUTION
Contra Costa County and the City of Pittsburg are engaged in the task of completing
a joint Application to designate portions of the City of Pittsburg and the
unincorporated community of Bay Point as a State Enterprise Zone.. The applicatoin
is due to the California Housing and Community Development (HCD) Department by
November 16, 2007. HCD has a Request for Proposals (RFP) for new applications
by local governments to be designated as Enterprise Zones (EZs). They have done
so because eight EZs expire in 2008. Since Pittsburg's EZ is one that is set to
expire, there is an opportunity to both extend and expand the EZ.
BACKGROUND ON EZ PROGRAM
The EZ Program is intended to provide state and local incentives for businesses to
invest and locate in economically distressed areas of California. State law currently
authorizes forty-two enterprise zones in California. In addition, the law allows
existing zones to expand up to 15% in geographic size.
The legislative purpose .of the EZ Program is to "stimulate business and industrial
growth in the depressed areas of the State." The other purposes are to establish a
program "to help attract business and industry to the state, to help retain and expand
existing state business and industry, and to create increased job opportunities for all
Californians."
Essentially, EZs are competitively designated based upon distress criteria (primarily
poverty.and unemployment levels) and the local government's capacity to carry out
an economic development program. They must provide additional local incentives,
and the EZs are designated for 15 years.
BENEFITS OF THE EZ PROGRAM
A primary benefit of being in an EZ is potential eligibility, for individual or corporate
state tax incentives. Businesses can'also receive local incentives, including local
regulatory relief. EZ state tax benefits include the following:
• Credit for hiring certain disadvantaged individuals. Qualified hires must fall
within one of 14 categories, including economically disadvantaged, dislocated
workers, veterans, or individuals receiving public assistance. Credits are 50%
for the first year of wages, 40% of second year wages, 30% of third year
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November 6, 2007
Board of Supervisors
Enterprise Zone Application
Page 3
wages, 20% of fourth year wages, and 10% of fifth year wages. The
maximum credit is about $35,000 per qualified hire over a 5-year period.
• Net operating losses 100% of losses can be carried over for 15 years.
• Credit for sales/use tax paid on the first $1 million in purchases (for
individuals) or first $20 million (for corporations).
• Business expense deduction - 40% of property costs (personal property,
equipment, furnishings) can qualify as a business expense, rather than as a
capital expense subject to depreciation.
• Net interest deduction for lenders, based upon the net interest received from
loans made to EZ businesses.
DISCUSSION
The City of Pittsburg is taking the lead in the preparation of the application. The are
working with Snodgrass & Micheli, LLC and Tassa Consulting Group, LLC to prepare
the Application for an EZ Designation. The proposed geographic boundaries include
areas in the City of Pittsburg and the unincorporated community of Bay Point (see
attached map).
In this resolution, the Board of Supervisors must adopt the boundary proposed for the
new EZ, which is based upon census tract data and meeting specified eligibility
criteria set forth in HCD's request for proposals. Additionally, the first year budget is
provided in line-item form, which is also required by HCD as part of the application
process.
The resolution also makes specified findings concerning the application area,
essentially that this area is economically depressed area and designation as an EZ is
needed in order to attract private sector investment to the application area. In
addition, we must demonstrate our commitment to and support for economic
development in the area and provide adequate staffing.
CONSEQUENSES OF NEGATIVE ACTION
The Bay Point Community will not be included in the application for Enterprise Zone
designation.
MEMORANDUM OF UNDERSTANDING FOR APPLICATION
FOR DESIGNATION OF THEPITTSBURG/BAY POINT ENTERPRISE ZONE
This memorandum of understanding is for the purpose of coordinating the
submission of an application for designation as an enterprise zone to the
California Department of Housing and Community Development for the proposed
Pittsburg/Bay Point Enterprise Zone. This MOU is made and entered into on the
day of November, 2007, by and among the City of Pittsburg ("City"), the
County of Contra Costa ("County), and the Contra Costa County Redevelopment
Agency (the "RDA").
WHEREAS, the parties desire to encourage economic development and
growth by supporting businesses and industries to expand or locate in that
certain contiguous area of City and the unincorporated area of Bay Point (as
shown on Exhibit A attached hereto, the "EZ"), as well as provide jobs, goods
and services to the inhabitants of this area.
WHEREAS, the parties wish to have certain planned commercial and
industrial areas of their respective jurisdictions designated as part of the EZ
.because of the potential for new and existing businesses within the EZ to claim
certain state tax benefits, including a sliding scale credit for hiring certain.
disadvantaged workers, a sales tax credit for the purchase of specified
manufacturing-related machinery and equipment, a net operating loss deduction,
an accelerated expensing deduction, and other benefits which may be provided
by the EZ.
WHEREAS, in order to receive the benefits of an enterprise zone, the
governing boards of the geographic area may enter into an administrative
agreement, and the parties to this MOU wish to enter into this MOU in regard to
the specific commitments made in the EZ application submitted to the HCD.
WHEREAS, City has received support from County, and City is- hereby
recognized as the lead administrative entity for operation of the EZ, and has
agreed to take'the lead role in coordinating the overall application process and
administration of the EZ on behalf of the parties listed herein.
NOW, THEREFORE, in consideration of their mutual promises.as set forth
herein, the parties hereby agree to the following:
1. Term. This MOU will remain in full force and effect from the date first
written above until the earlier to occur of (a) the date the State of California
Department of Housing and Community Development (the "HCD") notifies the
parties that the EZ has not been selected as a final applicant, or (b) ninety (90)
days after. the date the HCD notifies the parties that the EZ has received final
designation as an enterprise zone. In the event the HCD designates the EZ as
an enterprise zone, the parties shall cooperate in negotiating a Joint Powers
Authority agreement (the "JPA"), commencing with notification from the HCD that
the EZ has been finally designated as an enterprise zone and the JPA shall
replace this MOU.
2. Party's Responsibilities. The following are general actions to be
undertaken through this MOU by the parties named herein concerning the
submission of an application for designation of the EZ as an enterprise zone:
City will administer and coordinate all aspects of the application process
for the EZ with regular input from all parties to this MOU as to the content, level .
of activity and participation. City, as lead agency of the EZ, shall have the
authority to make all final decisions related to the EZ including content, level of
activity and participation, so long as the determination does not bind County or
the RDA to fiscal and/or operational commitments without explicit consent.
City. will coordinate business attraction and local business outreach
programs with all parties to the MOU to include objectives, deliverables and
expected outcomes, including quarterly progress reports concerning EZ
activities.
City will conduct .economic development activities in mutual cooperation
and coordination with all parties to the MOU in order to encourage the
development of new businesses, including attracting and assisting businesses
with location decisions.
City will provide ongoing, updated reports relative to the progress of
implementing the EZ, and will monitor various .levels of benefits as generated by
the businesses located in the EZ.
City will provide direct staff assistance in the vouchering of all eligible new
hires as submitted by businesses located within the EZ, including full
documentation for verification of eligibility.
City will assist EZ businesses with screening, job placement, and hiring
credit eligibility screening, so that individuals can be certified as "qualified
employees" for vouchering purposes.
City and County will coordinate and equitably share all future costs related
to providing the required and timely staff support needed to prepare and submit
the preliminary and final application to the HCD.
City and County will coordinate and equitably share all future costs.related
to marketing efforts to attract and retain businesses focused on the benefits of
the EZ.
C./tl
11-0�-07
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City and County will cooperate to provide current and relevant data as it
relates to any changes in land use issues, infrastructure upgrades and planning,
zoning within the EZ, fee structure, and any other jurisdictional actions that would
impact the ability to assist existing businesses or new businesses locating in the
EZ.
City and County will encourage elected officials to engage in active
support of business development and job creation within the EZ.
City and County will facilitate the access and assistance to EZ businesses
for permitting, infrastructure, expansion, and general business issues as they
related to the operation and benefits of the EZ.
City and County will.coordinate and equitably share all future costs related
to marketing the EZ to existing and prospective businesses in order to attract
investment and job creation in the EZ.
City and County will coordinate and equally share all costs related to the
application process for the initial EZ designation, including but not limited to
expenses related to preparation of the required application materials
("Application Costs"). City and County will each contribute funds not to exceed
Fifty Thousand Dollars ($50,000) toward the Application Costs.
Upon approval of the enterprise zone application and designation as an
official enterprise zone, the EZ will continue to incur costs related to the
administration and operation of the EZ ("Operational Costs"). City and County
agree to coordinate and equitably share all future EZ Operational Costs,
including but not limited to EZ staffing, supervision, marketing, consultant fees,
legal fees, and incidental expenses and will provide for the specific allocation of
these costs among themselves in the JPA. City shall continue to serve as the
lead administrative agency for the EZ ,upon official designation and throughout
the life of the EZ as designated by HCD.
This MOU sets forth the intention of City, County and the RDA with
respect to the submission of an application for designation of the EZ as an
enterprise zone. It is the further intent of the parties to provide a general
understanding of the levels of responsibility and interaction for each party to this
agreement. This MOU-is intended to serve as a guideline in accordance with the
requirements of the HCD Enterprise Zone Tax Incentives Program and will be
superseded by the JPA in the event the EZ. receives final enterprise zone
designation.
This MOU is consistent with the legislative intent of the Enterprise Zone
Tax Incentives Program and the EZ. The costs incurred to submit the application
for enterprise zone designation will be supported by the parties as identified in
the MOU.
IN WITNESS WHEREOF, the parties hereto have executed this MOU as of the
date first set forth above.
CONTRA COSTA COUNTY: CITY OF PITTSBURG
By: Marc Grisham
City Manager
CONTRA COSTA COUNTY ATTEST:
REDEVELOPMENT AGENCY:
By: Alice E. Evenson
City Clerk
APPROVED AS TO FORM: APPROVED AS TO FORM:
Silvano B. Marchesi,
County Counsel
Ruthann G. Ziegler
City Attorney
By:
Eric S. Gelston,
Deputy County Counsel
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THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Resolution on A& 6 2oeZ by the following vote: sE L
AYES: f!j- i`o i Za LQ l kb n ; l,'a� (yLd J ec -nc2d Pi yko
NOES: /V0►1
ABSENT:
�s�A,couK't't
ABSTAIN:
In the Matter of: RESOLUTION NO. 07- 6S3
RESOLUTION OF CONTRA COSTA COUNTY AUTHORIZING SUBMISSION OF AN
APPLICATION TO THE CALIFORNIA HOUSING AND COMMUNITY DEVELOPMENT
DEPARTMENT FOR AN ENTERPRISE ZONE DESIGNATION FOR BAY POINT AND DIRECTING
THE DEPUTY DIRECTOR—REDEVELOPMENT TO EXECUTE ANY NECESSARY DOCUMENTS
AND AGREEMENTS THERETO.
The Board of Supervisors for Contra Costa County DOES RESOLVE as follows:
WHEREAS, the California Housing & Community Development Department (the "HCD")
oversees the Enterprise Zone Tax Incentives Program the goal of which is to stimulate growth in
economically depressed-areas of the State; and
WHEREAS, the County wishes that a certain area of unincorporated Bay Point be
designated as an enterprise zone; and
WHEREAS, a certain area of the city of Pittsburg contiguous with the area of Bay Point
proposed to be designated as an enterprise zone is currently designated as an enterprise zone and
such designation will expire in 2008; and
WHEREAS, Pittsburg and the County each have jurisdiction over a certain area of the
proposed enterprise zone as set forth on Exhibit A attached hereto(the"Enterprise Zone"), and the
Enterprise Zone Act authorizes a city and county to jointly submit an application for a proposed
enterprise zone; and
WHEREAS, the area of Bay Point proposed to be designated as an enterprise zone has a
history of high unemployment and low income and the County supports job development, job
creation, and economic development in that area; and
WHEREAS, the County and the city of Pittsburg desire to enter into a memorandum of
understanding for the purpose of submitting a joint application to the HCD for designation of the
Enterprise Zone.
NOW,THEREFORE, BE IT RESOLVED, by the Contra Costa County Board of Supervisors
THAT:
1. It hereby finds that the County has jurisdiction over that portion of the proposed
Enterprise Zone lying within unincorporated Bay Point.
'a7
2. It hereby finds that the portion of the proposed Enterprise, Zone lying within
unincorporated Bay Point is an economically depressed area and designation of the
area as an enterprise zone is necessary in order to attract private sector investment to
the application area.
3. The boundary of the proposed Enterprise Zone as described in Exhibit A attached
hereto is hereby adopted.
.4. It finds that it is appropriate and necessary for the County to enter into a memorandum
of understanding with the City of Pittsburg (the WOU")for the purpose of submitting a
joint application to the California Department of Housing & Community Development
(the "HCD") for designation of the Enterprise Zone as an enterprise zone.
4. It hereby authorizes James Kennedy, Deputy Director—Redevelopment to execute the
MOU.
5. It hereby authorizes the submission of an application for enterprise zone designation
(the "Application") to be filed with the HCD and the submission of all required
documentation to the HCD for review and approval of the Application.
6. It hereby directs staff to complete all actions stated within the Application that apply to
the County should the Enterprise Zone be awarded a conditional designation.
7. It hereby adopts the overall line-item budget for the first year of the Enterprise Zone
that reflects the sources and uses of funds, as well as staffing, as described in Exhibit
B attached hereto.
8. It hereby authorizes staffing shall be made available to maintain recordkeeping,
monthly updates on Enterprise Zone activities, and to discuss these activities with
program auditors.
I HEREBY CERTIFY that the foregoing resolution was passed and adopted by the Board of
Supervisors at a regular meeting thereof held on November 6, 2007 by the following vote:
PASSED AND ADOPTED by the Board of Supervisors of Contra Costa County at a regular
meeting on
the 6th day of November, 2007, by the following vote:
AYES: ✓d �C.0-�� uc.��2r.��a; / o%�- -,.✓!D2t�. G,-y�/J'Cs�,y -
NOES:
ABSTAINED:
ABSENT: _
I hereby certify that this is a true and correct copy
of an action taken and entered on the minutes of the
Board of Supe rviso ;on the date shown.
ATTESTED:
JOHN CU LN,Clerk of the Board of Supervisors
and Co Administrator
By: