Chapter 4.105 — SALES TAX INCENTIVES

This chapter may be cited as the city "sales tax incentive law."

(Ord. 6374 § 1 (part), 1990)

A.

It is necessary and essential to the health, safety and welfare of the citizens of Pasadena to provide financial assistance to promote economic development in the city thereby creating employment opportunities for all residents of the city.

B.

A key component in the city's plan to economically revitalize the community is the expansion of the city's commercial base.

C.

The availability of the financial assistance authorized by this chapter will serve the legitimate public purposes and municipal affairs of the city, and implement the comprehensive general plan of the city, by providing qualified businesses with new methods of financing certain costs that are beneficial to the city and its residents and by ensuring that economic development within the city will:

Reflect the community's needs and objectives;

Be environmentally optimum with respect to both the physical and social environment of the city.

D.

Without the financial assistance authorized by this chapter, certain qualified businesses will be forced to relocate outside the city and others will be unable to locate within the boundaries of the city, thereby increasing or perpetuating building vacancies and increasing the potential for blight.

E.

The financial assistance authorized by this chapter will assist in facilitating the location of qualified businesses within the boundaries of the city and in preventing the out-migration of qualified business and thus reduce an adverse economic impact on the city's ability to provide essential public services to its residents.

F.

Promoting economic development within the city will serve the following public purposes and municipal affairs of the city:

The full and gainful employment of residents of the city;

The full and efficient utilization and modernization of existing commercial and business facilities;

The development of new commercial and business facilities;

The growth of the city's tax base through increased property values and consumer purchasing;

The reduction of the need for the costs of welfare and other remedial programs;

The reduction of urban ills such as crime attributable in part to inadequate economic opportunities;

The stability and diversification of the city's economy;

The enhancement of the general economic prosperity, and the health, safety and welfare of the residents of the city.

G.

The utilization of local resources in stimulating the resurgence of private investment and in promoting the growth and retention of employment opportunities within the city is of peculiar and unique concern to the city.

H.

Encouraging commercial development pursuant to this chapter:

Promotes the public health, safety and welfare, and will improve the social, moral, economic and physical condition of the community;

Constitutes a municipal affair of the city, a valid exercise of the police powers of the city and a public purpose in which the city has a peculiar and unique interest.

(Ord. 6532 § 2, 1993: Ord. 6374 § 1 (part), 1990)

Unless the context otherwise requires, the terms used in this chapter shall have the following meanings:

A.

"Costs" as applied to a project assisted under the provisions of this chapter, means and includes any and all reasonable or necessary costs incurred by or on behalf of a qualified business to carry out all works and undertakings and to obtain all rights and powers necessary or incident to the acquisition, construction, installation, reconstruction, rehabilitation or improvement of a project. Costs may include but are not limited to all costs of studies, surveys, architectural and engineering services; interest on indebtedness incurred to implement a project prior to, during and for a reasonable period following construction of a project; reserves for debt service and for repairs, replacements, additions and improvements to a project; and other working capital incidental to the operation of a project.

B.

"Business" means any organization, individual, association, corporation, partnership, venture or other entity, its subsidiary or affiliate which exists for profitmaking purposes or to otherwise secure economic advantage, which is approved by the city to enter into a contract authorized by this chapter.

C.

"Business improvement district" means a parking and business improvement area established under the Parking and Business Improvement Area Law of 1989 (commencing with Section 36500 of the Streets and Highways Code), as amended

from time to time.

D.

"Current Index" means the Index as of April 1, 1990.

E.

"Index" means the Consumer Price Index for all Urban Consumers (All Items) as published by the United States Department of Labor, Bureau of Labor Statistics for the Los Angeles/Long Beach/Riverside Consolidated Metropolitan Statistical Area (1982-84 100 Base).

F.

"New Index" means, with respect to determining whether a business is a qualified business, the Index for the calendar month in which a prospective qualified business submits a completed application pursuant to Section 4.105.060.

G.

"Project" means any structure or building or any portion thereof (and the land on which the same is located) located within the city, except to the extent such project may lawfully be located outside the city, and all real and personal property, including operating equipment and machinery (but not inventory) deemed useful in connection therewith, which shall be suitable for any undertaking involving the acquisition, construction, reconstruction and use or reuse of facilities or buildings by a qualified business.

H.

"Qualified business" means a business (1) that generates a minimum of $100,000.00 in sales tax revenue per year to the city, or (2) that desires to expand its facilities and/or buildings to the extent that such expansion would generate a minimum of $100,000.00 per year in new sales tax revenues to the city, or (3) that desires to locate a project within the city which would generate a minimum of $100,000.00 per year in sales tax revenues to the city, which minimum sales tax revenue amounts shall be increased, but not decreased, for the purpose of qualifying a business as a qualified business at the time of submittal of an application pursuant to Section 4.105.060 to the product obtained by multiplying the minimum sales tax revenue amounts set forth in this subsection by the quotient obtained by dividing the Current Index into the then-new Index.

I.

"Sales tax increment" means (1) that portion of taxes derived by the city and/or from the imposition of the Bradley-Burns Uniform Local Sales and Use Tax Law (commencing with Section 7200 of the California Revenue & Taxation Code) from the commencement of operation of a project less (2) the portion of such taxes derived by the city in the city's fiscal year prior to the commencement of operation of the project; provided, however, that the portion of taxes derived by the city and/or from the imposition of the Bradley-Burns Uniform Local Sales and Use Tax Law shall be adjusted by any increases in the Index.

J.

"Substitute Index" means, in the event the Index is in the future converted, revised or the component elements thereof altered, the index or combination of indices selected by the city finance director from available indices, which, in the sole and absolute discretion of the city finance director, most accurately reflects the increase in sales tax revenues or sales tax increment, as the case may be. If the Bureau of Labor Statistics ceases publication of the Index or indices relating to the foregoing statistical information, the city finance director shall have the right to select any index or combination of indices or similar statistical information published by any nationally recognized publisher of statistical information.

(Ord. 6532 §§ 3, 4, 5, 1993; Ord. 6374 § 1 (part), 1990)

Following approval of an application by the city council, the city council is authorized to enter into agreements with qualified businesses providing for rebates to qualified businesses of up to fifty percent (50%) of the sales tax increment (if any) generated by projects undertaken by qualified businesses. Such rebates shall be for the purpose of reimbursing qualified businesses for costs incurred for projects, and shall expire on the earliest of the following dates: (1) ten (10) years from the commencement of operation of a project; or (2) full reimbursement of the costs incurred by a qualified business for a project; (3) such earlier date as may be agreed to by the city and the qualified business; or (4) the end of the city's then-current fiscal year, unless the city appropriates funds for such obligation for the following fiscal year. Such agreements shall identify the costs incurred or to be incurred by a qualified business for a project. The terms and conditions of such agreements may be as mutually agreed upon, but shall be consistent with the provisions of this chapter and the rules and regulations. Any such agreement shall contain a covenant by the qualified business to complete the project, to maintain and operate the project for such minimum period of time as may be agreed upon by and between the city and each qualified business, not to oppose the formation of a new or amended redevelopment project area or business improvement district which includes the project site for purposes consistent with this chapter, and to attempt to maximize the city as the point-of-sale for goods and services sold as a result of business activities on any portion of the project site consistent with applicable requirements of law. In addition, any such agreement may contain such other terms and conditions as the city may require.

(Ord. 6532 § 6, 1993: Ord. 6374 § 1 (part), 1990)

In addition to all other powers specifically enumerated by this chapter, the city council is authorized to contract for and do all things necessary or convenient to carry out the purposes of this chapter; provided, however, that the city shall not have the power to operate a project under this chapter as a business.

(Ord. 6532 § 7, 1993: Ord. 6374 § 1 (part), 1990)

Any prospective qualified business may apply to the city for an agreement pursuant to this chapter by filing an application with the city in such form and setting forth such information as the city may require in order to enable the city to evaluate the applicant, the project, its proposed costs and public benefits. Such information may include but not be limited to the following:

A.

Information regarding the experience, expertise and financial capability of the qualified business and its contractors, consultants and agents in completing and operating similar projects;

B.

Basic concept plans for the proposed project;

C.

For qualified businesses involved in the sale, lease, manufacture and/or resale of automotive vehicles and/or trucks, the status of agreements with automobile manufacturers for the sale of new cars on the project site; and

D.

An economic proforma detailing the sources and uses of funds, including, but not limited to, estimated development costs, operating income and expenses, sources of financing, and economic returns.

(Ord. 6532 §§ 8, 9, 1993; Ord. 6374 § 1 (part), 1990)

Upon receipt of an application containing all required information, agreements and undertakings, the city council shall at such time as is deemed convenient by it, review such application and the agreement and any staff recommendations with respect thereto, in accordance with the procedures set forth in the rules and regulations. If the city council chooses to approve any application and agreement, it shall adopt a resolution in which it:

A.

Finds and determines that the proposed project described in the application and agreement:

Promotes the long-term employment of residents of the city and/or will prevent blight and significantly contribute to the maintenance, growth or expansion of the economic base of the city,

Constitutes a valid exercise of the police powers of the city, and serves a public purpose in which the city has a peculiar and unique interest,

Substantially relates to a municipal affair of the city;

B.

Accepts and approves such application and agreement and the participation of the city in such project, subject to the provisions of this chapter, the rules and regulations, and the conclusion of all proceedings undertaken to consummate such participation to the satisfaction of the city.

(Ord. 6532 § 10, 1993: Ord. 6374 § 1 (part), 1990)

If the city council chooses to approve an application and agreement of a qualified business involved in the sale, lease, manufacture and/or resale of automotive vehicles and/or trucks in accordance with Section 4.105.070, the city council may, as an additional incentive under this chapter, waive payment of all or a portion of the fees required to be paid under the new development impact fund ordinance. This additional incentive shall only be available to qualified businesses involved in the sale, lease, manufacture and/or resale of automotive vehicles and/or trucks, and the grant thereof, if at all, shall be within the sole discretion of the city council.

(Ord. 6532 § 11, 1993)