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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 e. rte ' IJ -vb- off 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 5 ' 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 N O a o U Q t i� rQ o:. \ ;o. 'O. r t0 d v Its\ t E `° :� r •C ¢ ti. N+ r• 'O 0- tTb .'CA N� • C- 45�i, /`/ 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: