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HomeMy WebLinkAbout6.1 Assembly Bill 562 (2013) Five-Year Outcome Report on Economic Development Subsidy Provided to Bicentennial Square Partnersr DUBLIN CALIFORNIA STAFF REPORT CITY COUNCIL Agenda Item 6.1 DATE: December 3, 2024 TO: Honorable Mayor and City Councilmembers FROM: Colleen Tribby, City Manager SU B.ECT: Assembly Bill 562 (2013) Five -Year Outcome Report on Economic Development Subsidy Provided to Bicentennial Square Partners Prepared by: Rhonda Franklin, ManagementAnalystll EXECUTIVE SUMMARY: The City Council will hold a required public hearing to receive comments on the outcome of the first five-year period of the economic development business incentive, Sales Tax Reimbursement Program, with Bicentennial Square Partners for the retention of Graybar Electric Company. STAFF RECOMMENDATION: Conduct the public hearing, deliberate, and accept the report. FINANCIAL IMPACT: None. DESCRIPTION: As a result of the adoption of California Assembly Bill 562 (2013), effective January 1, 2014, Government Code 53083 requires cities or counties granting economic development subsidies of $100,000 or more to provide public notification and a hearing regarding the subsidy which includes: name of beneficiary, subsidy amounts, beginning and ending dates, a projection of the tax revenues generated and lost, and an estimate of the number of jobs that will be created. In addition, a report and public hearing on the outcome including amounts expended or lost, jobs created, and net new revenues is required within the first five years of the subsidy as well as the requirement of an additional report and hearing at the conclusion of the subsidy if granted for 10 years or more. The City of Dublin offers a number of economic development business incentives to encourage economic vitality, including business attraction and retention. In support of these efforts, the City Page 1 of 2 1 Council adopted Resolution 127-19 approving an Agreement for Reimbursement of Sales and Use Tax Revenue between the City of Dublin and Bicentennial Square Partners, to assist in retaining Graybar Electric Company in Dublin. Bicentennial Square Partners is the property owner, and Graybar is one of their tenants located at 11505 Dublin Blvd. Graybar is a wholesale distribution business for electrical, communications, and data networking products. They have consistently been among the City's top 25 sales tax revenue generators. The Agreement allows for a reimbursement of up to $800,000, or 50% of the increase in sales and use tax revenue generated by Graybar above a specified base revenue amount, whichever is lower, over a 10-year period. Under the Revenue and Taxation Code, sales tax data must remain confidential; therefore, specific amounts cannot be disclosed. The reimbursements provided to the property owner are used to help offset the costs associated with certain improvements requested by Graybar as part of their business retention in Dublin. Five years have passed since the adoption of the Agreement, and in compliance with California Government Code Section 53083, Staff has prepared and made publicly available the "Outcome Report on Economic Development Subsidy Provided by the City of Dublin to Bicentennial Square Partners." This report states the outcome of the impact of the first five years of the subsidy including amounts expended or lost, jobs created, and net new revenues received. STRATEGIC PLAN INITIATIVE: None. NOTICING REQUIREMENTS/PUBLIC OUTREACH: A Public Hearing Notice was published in the East Bay Times and posted at several locations throughout the City. A copy of this Staff Report was provided to the parties to the Agreement. The outcome report was made available to the public via the City's website at www.dublin.ca.gov/1552. ATTACHMENTS: 1) 2024 Outcome Report on Economic Development Subsidy Provided to Bicentennial Square Partners Page 2 of 2 2 Attachment I CITY OF DUBLIN 2024 OUTCOME REPORT ON ECONOMIC DEVELOPMENT SUBSIDY PROVIDED TO BICENTENNIAL SQUARE PARTNERS The purpose of this report is to provide the information required by California Government Code Section 53083 in regards to an economic development subsidy provided by the City pursuant to an Agreement by and between the City of Dublin and Bicentennial Square Partners. Within the first five years of the term of the economic development subsidy, the City of Dublin must provide all of the following information in written form and available to the public and through the City's website and hold a public hearing to consider any written or oral comments on the information contained in the report. This report shall remain available to the public and posted on the City's website until the end date of the economic development subsidy on or before December 31, 2030. The public hearing to consider any comments on the information contained in this report will be held at the following time and place: Dublin City Council Meeting Tuesday, December 3, 2024, at 7:00 p.m. Council Chamber, 100 Civic Plaza, Dublin CA 94568 At the conclusion of the economic development subsidy, the City of Dublin is obligated to provide another report and hold another public hearing. 2024 OUTCOME REPORT ON ECONOMIC DEVELOPMENT SUBSIDY PROVIDED TO BICENTENNIAL SQUARE PARTNERS Statement of the public purposes for the economic development subsidy: The public purposes for the economic development subsidy are to: • continue to expand and enhance economic opportunities for businesses in the City • continue to expand the City's employment base, and • continue to generate hereinafter defined Sales Tax that the City can utilize to fund general governmental services such as police, fire, street maintenance, and parks and recreations programs. 1. The name and address of all corporations or any other business entities, except for sole proprietorships that are beneficiary of the economic development subsidy: The City continues to provide financial assistance in the form of an economic development subsidy to Bicentennial Square Partners (property owner) as described in the Agreement for Reimbursement of Sales and Use Tax Revenue with Bicentennial Square Partners (Agreement). 3 Bicentennial Square Partners 15671 Stanton Road Grass Valley, CA 95949 Graybar Electric Company Inc. 34 N. Meramec Ave., St. Louis, MO 63105 Doing business at 11505 Dublin Blvd., Dublin, CA 94568 2. The start and end dates (term) for the economic subsidy: The start and end of the economic subsidy is as follows: Effective December 3, 2019, and ending approximately December 31, 2030. 3. A description of the economic development subsidy, including the estimated total amount of the expenditure of public funds by, or of revenue lost to, the local agency as a result of the economic development subsidy: Over the 10-year term, the City estimates to reimburse Bicentennial Square Partners up to Eight Hundred Thousand dollars ($800,000), or fifty percent (50%) of the increase between sales and use tax revenue received by the City generated by Tenant compared to a base revenue amount set by the City, whichever is less. 4. The net tax revenue accruing to the local agency as a result of the economic development subsidy: The City has received the expected annual tax revenue of at least $100,000 of sales tax each year as estimated in the Agreement. Note: Revenue and Taxation Code Section 7056 requires that sales tax data be kept confidential since that information would reveal the business affairs or operations of a business. Thus, it is unlawful for the City to disclose specific amounts of tax revenue received from a single business or property. 5. The number of jobs created by the economic development subsidy, broken down by full-time, part-time, and temporary positions: The Agreement has retained 89 full-time positions and created 3 temporary positions. 4 Assembly Bill 562 (2013) Five - Year Outcome Report on Economic Development Subsidies December 3, 2024 DUBLIN CALIFORNIA 5 Assembly Bill 562 (2013) Background • AB 562 (2013) requires cities and counties granting economic development subsidies of $100,000 or more to provide public hearing reports on: — The initial consideration of the subsidy (12/3/2019). — Five-year outcome of the subsidy (12/3/2024). — Outcome at the conclusion of the subsidy (est. 2030). 6 Subsidy Background • On December 3, 2019, City Council approved an Agreement for Reimbursement of Sales and Use Tax Revenue between the City of Dublin and Bicentennial Square Partners to assist in retaining Graybar Electric Company in Dublin. • Graybar has consistently been among the City's top 25 sales tax revenue generators and is a Fortune 500 company. 7 Subsidy Background, 2 • The Agreement allows for a reimbursement of up to $800,000 or 50% of the increase in sales use tax revenue generated by Graybar. • Sales tax data must remain confidential. • Five years have passed since the approval of the Agreement. • Outcome Report on Economic Development Subsidy. 8 Five -Year Outcome Report • City has received the expected annual tax revenue of at least $100,000 as anticipated. • 89 full-time jobs have been retained. 9 Conclusion • The next report is due at the conclusion of the Agreement term, by December 2030 if not sooner. • Questions?