El Segundo Municipal Code Ch. 2 Business Attraction Program

This chapter shall be known as the BUSINESS ATTRACTION PROGRAM OF THE CITY. (Ord. 1252, 4-9-1996)

This chapter sets forth a mechanism for establishing financial incentives to businesses to facilitate business attraction in the city. (Ord. 1252, 4-9-1996)

"Business" as used in this chapter is defined as a business proposing to locate in the city which meets most of the following criteria and is eligible for consideration for the incentives established under this chapter:

A. The business is engaged in a primary or secondary target industry as identified in the city economic development strategic plan dated September 23, 1993, as amended from time to time by the city council.

B. The business has developed a business plan for long-term growth.

C. The business will provide the city with a return on investment within three (3) years or a longer term if approved by the city council. The method used to determine the return on investment for the city shall consider the costs of city services provided to the business and the revenue and other benefits that the business provides to the city. The revenue and benefits provided to the city shall include, but not be limited to, the following factors: increase in number of jobs, increase in square footage occupied, increase in sales and use tax revenue, increase in utility users tax revenue, increase in franchise fees, and increase in any other taxes or fees paid to the city.

D. Commitment of the business to stay in the city for a minimum of six (6) years.

E. Business has the capability of utilizing existing businesses located in the city or attracting support industries into the city. (Ord. 1252, 4-9-1996)

A. The authority granted to the city manager to approve financial incentives to businesses under sections 3-2-5 and 3-2-6 of this chapter is limited to an aggregate amount of twelve thousand five hundred dollars ($12,500.00) per eligible business. The city council shall have the exclusive authority to approve incentives to businesses under sections 3-2-5 and 3-2-6 of this chapter which exceed the aggregate amount of twelve thousand five hundred dollars ($12,500.00) per eligible business.

B. In the event a business seeks an incentive which requires city council approval under subsection A of this section and such business needs a land use approval which is subject to city council review, the council shall only consider the request for the incentive concurrently with or subsequent to the council's review of the land use application; or, in the event city council's potential review of the land use application is only by way of appeal and no appeal is filed within the time limits established by the El Segundo municipal code, subsequent to the expiration of time to file the appeal.

C. An incentive requiring city council approval under this section shall be placed on the consent calendar section of the city council meeting agenda. (Ord. 1324, 9-19-2000)

A. Tax Credit: A business subject to the tax imposed by this chapter is entitled to a tax credit against the tax imposed by section 4-2-4 of this chapter whenever it generates sales and/or use tax in the year immediately preceding the year in which the tax is due. The credit is applied to the business registration tax due for the following year.

B. Percentage Of Tax: The tax credit referred to in subsection A of this section, will equal up to forty percent (40%) of the sales or use tax generated by the business and received by the city during the twelve-month period ending on June 30 preceding the date the tax is due.

C. Amount Of Tax Credit: Under no circumstances can the amount of the tax credit for any year be calculated to be greater than the total amount of tax due for any year under this chapter.

D. A business may only be granted business license tax credits under this section for the first three (3) consecutive years after the initial year of issuance of the business license or such longer term as determined pursuant to subsection 3-2-3C of this chapter.

E. In no event may a tax credit granted to any business pursuant to this section exceed a cumulative total of twenty-five thousand dollars ($25,000.00). Any business that has received a business license tax credit totaling more than twenty-five thousand dollars ($25,000.00) as of December 1, 2023, shall not be entitled to any additional business license tax credit under this section. (Ord. 1252, 4-9-1996; amd. Ord. 1643, 12-13-2022)

The city manager, or his or her designee, is hereby authorized to negotiate and enter into a tax credit agreement which grants to a business a credit on the utility users tax imposed by the city for a period not to exceed three (3) years following the date of the agreement or such longer term as determined pursuant to subsection 3-2-3C of this chapter. The credit shall be calculated annually and shall be applied to the utility users tax owed for the next fiscal year only; provided, that, in no event, shall the credit exceed the amount of tax owed. (Ord. 1252, 4-9-1996)

A. Fee Reduction: Director of community development or his or her designee, is hereby authorized to negotiate an agreement which reduces the planning and/or building fees applicable to a project developed by a business in an amount not to exceed fifty percent (50%) of the fees imposed. The fee reduction shall only apply to projects specified in the agreement. Said agreement shall be approved by the city manager.

B. Completion Timetable: The director of community development or his or her designee, is hereby authorized to negotiate an agreement which establishes a timetable for the completion of the review, approval and inspection process conducted by the city in connection with a project developed by a business. Under said agreement, the planning and/or building fees applicable to the project shall be refunded and/or waived if the failure to meet the timetable is solely caused by city inaction. The fee refund and/or waiver shall only apply to the project specified in the agreement. Said agreement shall be approved by the city manager.

C. Fees Defined: For the purpose of this section, "planning and/or building fees" is defined as any or all of the fees imposed by the city under the zoning, subdivision, building, electric, plumbing, and mechanical codes of the city. (Ord. 1252, 4-9-1996; amd. Ord. 1315, 1-18-2000; Ord. 1639, 9-20-2022)

The city council has the authority to: a) provide for the suspension of taxes collected under this title and title 4 of this code; and b) provide for a reduction in the tax rates assessed under this title and title 4 of this code. (Ord. 1252, 4-9-1996)