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SUBJECT: RESOLUTION NO. 34, SERIES 2015 <br />DATE: JUNE 2, 2015 <br />PAGE 2 OF 3 <br />The company meets the general criteria by which assistance may be granted in <br />accordance with the Business Assistance Policy. Hope Foods is not currently looking at <br />other municipalities for this project, but staff believes the threat of a company leaving <br />town is not necessary for consideration for incentives. The retention of existing jobs, <br />expansion of jobs, and utilizing existing buildings are all criteria stated in the Business <br />Assistance Program language. Staff will be preparing an amendment to the Business <br />Assistance Program to more clearly state that assistance to encourage existing <br />employers to expand is a qualifying project. <br />The company's average wages as a whole are higher than the County average wage. <br />However, the average wages of jobs created in this project are not above the County's <br />average wage. The assistance would be funded by permit fees, construction use tax, <br />and consumer use taxes from the construction of the tenant improvements and <br />equipment purchases at the project location. <br />City staff estimates Hope Foods will generate new revenue of approximately $305,000 <br />from building permit fees, construction use taxes, and consumer use taxes directly to <br />the City in the three year project, given the anticipated investment. Approximately <br />$42,000 of that amount is fees designated for Open Space and Historic Preservation <br />purposes. <br />Based upon the estimated revenue projection, staff recommends the following: <br />Proposed Assistance <br />Building Permit -Fee Rebate <br />50% rebate on permit fees for tenant finish <br />(Excludes tap fees) <br />Building Use Tax Rebate <br />50% rebate on Building Use Tax for Tenant finish <br />(excludes 0.375 % Open Space tax <br />and 0.125% Historic Preservation tax) <br />Consumer Use /Sales Tax Rebate on durable goods <br />50% rebate on Consumer Use Tax /Sales tax paid on <br />Durable goods through June 30, 2018 <br />Capped at $130,000 <br />Approximate <br />Value <br />$6,200 <br />$6,700 <br />$118,000 <br />Total Estimated Assistance $130,900 <br />Staff suggests the assistance be provided at 50% of the actual Building Use Tax, and <br />Building Permit Fees, for the project. The agreement is void if the company does not <br />CITY COUNCIL COMMUNICATION <br />34 <br />