HomeMy WebLinkAboutRES 2022-068RESOLUTION NO. 2022-68
' A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM DESERT, CALIFORNIA, RESCINDING RESOLUTION
2020-14 AND APPROVING RESOLUTION NO. 2022-68,
REESTABLISHING THE 'INVEST PALM DESERT"
ECONOMIC DEVELOPMENT INCENTIVE PROGRAM
WHEREAS, since the elimination of redevelopment, which provided
numerous tools and strategies to further the elimination of blight and stimulate
economic growth, cities throughout California have struggled to find creative ways of
stimulating economic development within their jurisdiction;
WHEREAS, the State Legislature approved SB 470 (Chap 659, Wright) in
2013 which states it is the intent of the Legislature to (a) promote economic
development on a local level so that communities can enact local strategies to
increase jobs, create economic opportunity, and generate tax revenue for all levels
of government; (b) give local governments tools, at no cost to the state, that allow
local governments to use their funds in a manner that promotes economic
opportunity; and (c) cities need to continue certain powers afforded to
redevelopment agencies that were critical to economic development.
WHEREAS, SB 470 declared to be the policy of the state: (a) to protect and
' promote the sound development of economic opportunity in cities and the general
welfare of the inhabitants of those communities through the employment of all
appropriate means; and (b) that whenever the creation of economic opportunity in
cities cannot be accomplished by private enterprise alone, without public
participation and assistance in the acquisition of land, in planning and in the
financing of land assembly, in the work of clearance, and in the making of
improvements necessary therefor, it is in the public interest to advance or expend
public funds for these purposes, and to provide a means by which economic
opportunity can be created.
WHEREAS, SB 470 explicitly authorizes a city to establish a program under
which it loans funds to owners or tenants for the purpose of rehabilitating
commercial buildings or structures.
WHEREAS, the City of Palm Desert, like many other communities in
California, has struggled to find innovative strategies to further economic growth
within the City, which has seen a decline in staff, services, and other resources;
WHEREAS, the City has also experienced ever-increasing rates of vacancies
in commercial and retail establishments along major corridors of the City, as existing
businesses, once thriving and benefitting from the use of tax increment financing,
face dwindling economic activity and depressed conditions;
WHEREAS, the City believes that retaining and improving the tax base of the
city is critical to the economic growth of the City and provides a clear benefit to
residents who utilize city services and programs;
RESOLUTION NO. 2022-68
WHEREAS, on January 24, 2019 the City Council of the City of Palm Desert
adopted their 2019 Annual Goals that included direction to the City Manager to '
establish and promote a business incentive program that would stimulate economic
development in the City of Palm Desert;
WHEREAS, Resolution 2020-14 approved the Invest Palm Desert program
until June 1, 2022, and the City Council desires to reestablish the program in
perpetuity;
WHEREAS, the City of Palm Desert General Plan identifies transformative
Focus Areas which call for redevelopment and reinvestment to create a town with
great neighborhoods, anchored by a true and vibrant downtown;
WHEREAS, the City Council of the City of Palm Desert wishes to use its
authority and power in order to provide any number of incentives, including but not
limited to, fee moratorium, loans, grants, and other various financial and non-
financial incentive programs for the benefit of Citywide community and economic
development, which will, in turn, increase its tax base and serve the economic well-
being of the City.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Palm Desert as follows:
SECTION 1. That the City Council of the City of Palm Desert approves the '
"Invest Palm Desert - the City of Palm Desert Incentive Program" (the "Incentive
Program") as described in Exhibit A, and accompanying Exhibits.
SECTION 2. This Resolution shall take effect immediately upon its adoption
by the City Council, and the Clerk of the Council shall attest to and certify the vote
adopting this Resolution.
SECTION 3 This Resolution shall authorize the City Manager to implement
the Incentive Program and all its administrative requirements
SECTION 4 This resolution shall authorize the Finance Director to re -allocate
funds from Unite Palm Desert (Acct. No. 4254430-4393000) to Invest Palm Desert (Acct.
No. 4254430-43875000)
[SIGNATURES TO FOLLOW ON THE NEXT PAGE]
RESOLUTION NO. 2022-68
' PASSED, APPROVED AND ADOPTED by the City Council of the City of Palm Desert,
California this 14th day of July, 2022 by the following vote:
AYES: JONATHAN, KELLY, QUINTANILLA, and HARNIK
NOES: NONE
ABSENT: NESTANDE
ABSTAIN: NONE
fY CLERK
, CALIFORNIA
r
`S._lC/F, / � ,/l� ,Yc
J CHAR IK , MAYOR
RESOLUTION NO. 2022-68
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RESOLUTION NO. 2022-68
EXHIBIT A
City of Palm Desert
Incentives Program
In order to encourage community and economic development that meet specified
criteria, the City of Palm Desert establishes the following program: "Invest Palm
Desert - The City of Palm Desert Incentive Program" (the "Incentive Program").
The Incentive Program is established to enhance the City's ability to promote
economic development, facilitate the growth of Palm Desert businesses and housing
that provide high quality jobs and a strong economic base to support services to its
residents, aid in the diversification of the City's economy, and promote an improved
quality of life within the City.
Questions regarding this program should be directed to the City's Economic
Development Director at 760-346-0611.
A, Minimum Elinibility Criteria
In order to be eligible for the Incentive Program, an applicant must meet the
following criteria:
' 1. Be a business, business owner, lessor, developer or real property owner
within the boundaries of the City of Palm Desert, and in good standing with
the City of Palm Desert. Improvements must be of architectural significance
or must add a minimum of 20% of the current square footage of an existing
location, or 1,000 square feet.
2. The business, project or development must be located or provide evidence
that it will locate within the Desert Willow Golf Resort, University Park or the
following zoning districts within the boundaries of the City of Palm Desert;
Downtown ("O"), Downtown Overlay ("DO"), Downtown Edge ("DE"), Planned
Commercial ("PC") or Service Industrial ("SI").
3. Demonstrate financial need and offer a clear state of public purpose for
participation and consideration to the City in the Incentive Program, including
documentation demonstrating a feasibility gap analysis, project shortfalls or
other evidence stating the public purpose for participation in the Incentive
Program. The applicant must recognize that participation in the program will
trigger prevailing wage.
4. Satisfy at least one of the two of following criteria (and meet program
category criteria):
' a. 1 new permanent full-time jobs with salaries equal to or greater than
100% of the most recently published Area Median Income (AMI) for a 1-
RESOLUTION NO. 2022-68
person household in Riverside County, as reported by the California
Department of Housing and Community Development (HCD) per I
$100,000 of incentive; or
b. 2 new permanent full-time jobs with salaries equal to or greater than
90% of the most recently published AMI for 1-person household in
Riverside County as reported by HCD per $100,000 of incentive.
5. Applicants must receive their entitlements and associated permits after the
date of adoption of this resolution by the City Council.
6. Applicants must agree to commence their improvements within 6-months of
funding approval from the City. In the event an applicant is approved for an
incentive and does not commence improvements prior to that time, the
applicant forfeits the entirety of the awarded incentive.
IL Incentives (subject to "Requirements and Limitations" in Section E.)
1. Development & Plan Check Fee Rebate:
Applicants may request a rebate of certain City -administered development
fees in an amount not to exceed 100% of the total City development fees
typically required by the applicant and depending on the character of the
project. The amount of applicant's fees to be rebated will be calculated '
rebated to the applicant upon completion of the project. Fees that may be
reduced are:
a. Initial or Expedited Plan Check Fees
b. Planning Fees
c. Certain Development Fees
2. Capital Improvements Grant:
Applicants may apply for a matching grant of 1:1 from the City up to a dollar
amount that totals 50% of the requested hard costs of permanent capital
improvements or rehabilitation. Permanent capital improvements can include
elements such as facade enhancements, interior capital improvements, or
other hard costs associated with rehabilitation, renovation or redevelopment
of a commercial or industrial building or structure. The improvements must be
constructed within the zoning districts defined in Section A, herein. Approval
of participation and terms of the Capital Improvements Grant program is at
the sole and case -by -case discretion of the City Council.
a. The San Pablo Caoital Imorovements Grant: For properties located
along the San Pablo commercial corridor improvements (within in zoning
districts Downtown ("D"), Downtown Edge ("DE") and Downtown Overlay
("DO") Hwy 111 and Fred Waring Drive, and with a portion of site '
frontage along San Pablo Avenue and located within attached map,
Exhibit B, a matching grant of 2:1 up to a dollar amount that totals up to
RESOLUTION NO. 2022-68
66% requested hard costs of permanent capital improvements or
' rehabilitation will be considered.
b. A lien will be placed upon the real property associated with the
project. In addition to the other requirements listed herein, the applicant
must continue to own and operate the project for a minimum of five
years from the date of Certificate of Occupancy. In the event the
applicant does not perform in accordance with the stated terms of the
Incentive Agreement, the property owner will be required to refund the
City an amount prorated to the number of days deficient of the Incentive
Program requirements.
c. In no case shall the City's contribution exceed $500,000 to an
individual project within the Capital Improvements Grant, and in no case
shall the City's Contribution exceed $200,000 within the San Pablo
Capital Improvements Grant.
3. High Wage "Move In" Incentive:
The City may consider on a case -by -case basis providing assistance to
business that relocate their headquarters operations into Palm Desert from
outside the City or to entities from the Palm Desert iHub that locate their HQ
operations in the City. The City may provide assistance:
' a. In the form of moving assistance of $25,000 per employee (in no
case shall the amount of incentive exceed $500,000). The tech
business must relocate its headquarters operation in its entirety and
remain in operation as a headquarters in its entirety for a minimum
of five years. The business will retain its count of employees for a
minimum of five years. Payments will be paid in arrears after
providing documentation of the following:
i. Jobs must pay 150% of average wage in Palm Desert as of
January 1, 2020 ($48,880 x 150% _ $73,200). Applicant is
required to provide evidence of such salar(ies) in the form of an
anonymized salary roll certified by a third party accountant and
delivered for review to the City Finance Director.
Applicant for Tech invocation incentives must provide evidence of business
operations matching NAICS code(s) in the list in Exhibit C herein. Applicants
that operate a business with a NAICS code not listed must provide a
statement of purpose which clearly identifies the business as tech -based.
Approval of participation and terms of the tech innovation incentive is at the
sole and case -by -base discretion of the City Council.
' 4. Site Specific Revenue Sharing:
Applicants may apply for a partial rebate of new incremental revenue
generated by the Applicants business at a specified development site.
RESOLUTION NO. 2022-68
Rebates will be conditioned on City's receipt of the new incremental tax
revenue and will be calculated based on the actual revenues for the '
Applicant's business received by the City. Approval of participation and terms
of the Site Specific Revenue Sharing program is at the sole and case -by -case
discretion of the City Council.
5. New Development Project Assistance
The City may consider on a case -by -case basis providing assistance with
new development projects that include, but are not limited to, land purchase
assistance, gap financing, and other public infrastructure investments that
create, support or enhance the public uses of the project. Approval of
participation and terms of the New Development Project Assistance program
is at the sole discretion of the City Council.
6. Ongoing & Other Incentives:
The City may provide additions and subtractions to the Incentive Program
from time -to -time, the terms of which will be provided at the time of approval.
C. Application Procedures and Review Process:,
1. Any existing Palm Desert business, real property or building owner, lessor
(with owner approval) meeting the minimum eligibility qualifications identified I
in Section A may submit an Incentive Application along with a written
proposal to the Economic Development Director. The proposal shall:
a. Highlight the public purpose and consideration to the City (i.e., jobs,
elimination of hazardous condition, etc.) and clearly identify the project
finance gap, if present.
b. Provide a general description of the proposed project, type of business,
location, number and type of jobs existing and to be added, projected tax
revenue generation (see Section B for qualifying revenue sources), and
any other criteria the City may use to evaluate the public benefit of the
proposed project. This may include both financial benefits as well as
enhancements to the community's overall quality of life and diversification
of the City's economic base.
b. Financial summary of the project including, total cost of project,
including separate identification of hard costs and soft costs and any other
costs associated.
c. A preliminary financial plan, whether the project is funded by equity, or
debt, or a combination of both.
d. Address of the required qualifications of Section A that are being ,
proposed.
RESOLUTION NO. 2022-68
e. Identify the incentives requested and the estimated value of each
' requested.
2. Upon receipt of the proposal, the City Manager will review the request and
forward a copy of the application to the Economic Development Director for
review. The Economic Development Department will complete a fiscal
analysis and review the application and proposal along with the requested
incentives.
3. Based upon the fiscal analysis and review of project by the Director of
Finance, City Attorney and various other City staff, negotiation with the
applicant, and consideration of the overall public benefit of the proposal and
proposed incentives the Economic Development Director shall prepare a
proposed incentive package qualification report for City Manager or City
Council consideration and approval.
1L Value of Incentives and Approval Process;
1. The total value of the incentives offered to the applicant will depend on the
particular attributes of each proposal, and shall be determined on a case -by -
case basis, with importance placed on the public economic benefits that will
accrue to the City by expansion of the existing business or employees. The
City retains the right in its sole discretion to reject any proposal.
' 2. After review of the application by the City's Economic Development
Department shall perform an analysis of the applicant's requested incentives.
Applicants are encouraged to provide economic impact studies or analysis for
the City's consideration. The City may undertake those studies or analyses at
the City's or, with consent of the applicant, applicant's cost (to be deducted
from the amount received by the applicant and/or reimbursed to the applicant
from the City).
3. After review by the Economic Development Director, recommendations will be
provided to the City Manager or City Council for further qualification
consistent with the Incentive Program and any applicable laws. If the
applicant meets the criteria established by Section A of Incentive Program
and sufficient information is gathered to justify the City's provision of an
incentive package, the Economic Development Director shall cause to be
prepared an Incentives Funding Agreement that shall be signed by the City
Manager, or Mayor, as applicable.
4. Applications requesting less than $25,000 may be approved by the City
Manager. However, the City Manager may require City Council approval of
any applications, including those less than $25,000. Any incentive listed as
case -by -case or combination of incentives requested that include those listed
as case -by -case will require review and approval by the City Council. City
Manager approvals will not exceed $250,000 in aggregate for any given year
of the Program (however, no one applicant will be approved for more than
$25,000 without the City Council's approval).
RESOLUTION NO. 2022-68
5. Any incentive valued at $100,000 or more must be approved consistent with
the requirements of Government Code 53083 (effective January 1, 2014). In '
no case shall the City provide incentive in violation of 53084 and 53084.5.
6. The applicant must receive all other project entitlements and permits as
required.
E. Requirements and Limitations:
1. Incentives are offered on a case -by -case basis and at the sole discretion of
the City Council.
2. Incentives will be offered and based upon the availability of City funds as
appropriate by Council on a year-to-year basis. Applications that qualify when
funds are no longer available may be placed on wait list for future fund
availability, but are not guaranteed funding.
3. Applicants must commence the project as described within 6 months of City
funding approval. In the event an applicant receives entitlements after the
date of adoption and does not commence the project within 6 months the
applicant is no longer eligible for the incentives and agrees to forfeit any and
all incentives awarded.
4. The incentives herein may not be applied retroactively except for when ,
allowed as described herein.
5. Incentives and/or incentive packages may trigger a requirement to pay
prevailing wages. Applicants are required to abide by prevailing wage laws,
which apply to construction projects funded in whole or in part with public
funds, by State law. Applicants will be required to agree to indemnify, defend
and hold the City harmless for any claim that prevailing wage was applicable
and not adhered to. Applicants should seek professional advice regarding
prevailing wages requirements.
6. City reserves the right to reject any or all proposals.
7. Applicants are highly encouraged to seek legal representation to pursue an
incentive under this Program.
F. Reauired Aareement Provisions:
1. To receive an incentive under the Incentive Program, Applicants will be
required to enter into an agreement with the City.
2. Agreements prepared in furtherance of Incentive Program may include the
following provisions and others in the discretion of the City: I
RESOLUTION NO. 2022-68
a. Terms and Conditions of the incentive package, including timelines for
' payment due, reimbursements to be made, etc., as may be applicable
to the incentive package.
b. Annual Monitoring: Sufficient monitoring of the applicant's continued
eligibility of the incentives offered under the Incentive Program. For
example, for applicants receiving incentives for the creation of
additional jobs, paycheck stubs or other proof that individuals continue
to be employed will be required, for a length of time deemed
appropriate for the parties. Data provided can support reporting under
Government Code 53083 requirements, however, a separate and
annual report must be filed with the City and are the responsibility of
such report lies solely with the applicant. Failure to report can result in
forfeit of incentives. Applicants seeking Capital Improvements agree to
regular inspections by City staff and will require review upon
completion that the design agreed upon was constructed.
c. Records Open to Inspection: The City will have a right to inspect, upon
a minimum of 48 hour advance notice, financial records maintained by
the applicant pertaining to incentives under the Incentive Program.
d. Indemnification: Applicant shall indemnify the City for claims related to
implementation of the agreement.
' e. Security for any loans, grants or deferrals or other incentive.
f. Contractually agree to continue operation for the duration of the
incentive(s) or be required to return the value of the incentive(s)
provided or per terms of the mutually negotiated Incentives Agreement.
g. Applicant shall comply with all local and state regulatory requirements,
e.g. California Environmental Quality Act, local zoning requirements,
etc.
3. Any other agreements required by the incentive package shall be approved
by the City Council and shall be prepared based on the agreement negotiated
by the parties, including but not limited to, deferral and loan agreements, the
Incentive Agreement.
F. General Provisions:
1. No additional incentives will be offered unless a Resolution expanding the
Incentive Program is adopted by the City Council.
2. This Program will provide funds as long as they are available and subject to
' appropriation by the City Council year-to-year and as applications are
deemed eligible by the City. In no case is the City obligated to provide funding
to applications it does not deem in the public benefit, nor for any application
RESOLUTION NO. 2022-68
that exceeds the fund balance. The City, in its sole opinion, reserves the right
to reject any application for any reason. ,
2. The Incentive Program may be modified by the City Council at any time.
RESOLUTION NO. 2022-68
' EXHIBIT 8
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RESOLUTION NO. 2022-68
EXHIBIT C
NA/CS Code - for Qualification in Tech Innovation Grant Program
The following list contains those NAICS codes which most directly involved in the "High
Tech" sector. It is not exhaustive of all possible high tech industries
NAICSN NAICS_LAB
333295 Semiconductor machinery mfg
333315 Photographic and photocopying equipment manufacturing
334111 Electronic computer mfg
334112 Computer storage device mfg
334113 I Computer terminal mfg
3341191 Other computer peripheral equipment mfg
334210 1 Telephone apparatus manufacturing
334220 Broadcast and wireless communications equip.
334413 Semiconductor and related device manufacturing
334511 Search, detection, navigation, guidance, aeronautical, and nautical system and
instrument manufacturing
421430 Computer & peripheral equip & software whsle
421690 Other electronic parts & equipment whsle 1
423430 Computer and computer peripheral equipment and software merchant
wholesalers J
423690 Other electronic parts and equipment merchant wholesalers
9431201
511140
5112101
514210
518210
519130
541330
541511
541512
541513
541519
541710
541711
Computer and software stores
Database and directory publishers
Software publishers
Data processing services
Data processing, hosting, and related services
Internet publishing and broadcasting and web
Engineering services
Custom computer programming services
Computer systems design services
Computer facilities management services
Other computer related services
R&D in physical, engineering & life sciences
Research and development in biotechnology
541712 Research and development in the physical, an,
(except biotechnology)
RESOLUTION NO. 2022-68
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City of Palm Desert
' Economic Development Department
INCENTIVE PROGRAM
73-510 Fred Warins Drive- Palm Desert- California- 92260 • (760)346- 11 • F .x (760) 776-6417
Applicant (person/firm proposing the project):
/el Pphone:
Mailing Address:
- ..x number:
City: State:
Zip:
— — -ul:
Property Owner (land owner):
Telephone:
Il.lailing Address:
_ _ _ Fax number:
City: State:
_Zip- _
Email:
Representative (if different from application):
_Telephone:
Mailing Address:
—
— Fax number: - - - - - - - -
CityState:
Zip. _
Email:
Please send correspondence to (check one): _
Applicant
Property Owner Representative
Please mark the programs applied for and complete questions on separate page(s):
' o Development j: Plan Check Fee Rebate
o Capital Improkement Grant
o Hirt Wage •`Nave In" Grant
o Site Specific Revenue Sharing
o Development Assistance (describe request in narrative;
o Oth er (describe request in narrative)
2. Attach a project narrative, including type of business, whether the applicant or the
applicant's property hill bythe recipient of the funding (i.e., broker is applicant, property
where funding will be spent), what public benefit the applicant believes is being met.
3. In the case of capital improvements, or grant dollars that will be used for relocation or
location assistance, attach project rendering(s). In the case of other, provide tear sheets of
proposed equipment, P.O.
4. Describe# of proposed jobs retained or expanded, along with average annual salary.
I*Legal detail and Signature block to be included*