City of Culver City, California
Agenda Item Report
Meeting Date: 03/22/10 Item Number: A-1
REDEVELOPMENT AGENCY BOARD AGENDA ITEM: Authorization to Modify
Provisions of the Fee Incentive Program.
Contact Person/Dept.: Kriss Casanova Phone Number: 310.253.5769
Fiscal Impact: Yes [X] No [] General Fund: Yes [] No [X]
Public Hearing: [] Action Item: [] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Meetings and Agendas – Redevelopment Agency (03/17/10),
The Culver City Chamber of Commerce (03/17/10).
Department Approval:
Sol Blumenfeld (03/16/10)
Agency General Counsel Approval:
Murray Kane: (03/09/10)
Chief Financial Officer Approval:
Mark Scott (by N. Kimball) (03/17/10)
Executive Director Approval:
Mark Scott (03/17/10)
RECOMMENDATION:
Staff recommends that the Culver City Redevelopment Agency Board (the “Board”)
authorize modifications to the Fee Incentive Program (the “Program).
BACKGROUND:
Businesses play an influential role in the economic success of the City by increasing
the tax base, improving the quality of life, and revitalizing economically challenged
areas. Since its inception, the Agency has actively worked to retain and attract
preferred businesses that create a diverse economy, generate quality job
opportunities, market Culver City and provide an economic benefit to the City. To
retain and attract preferred businesses, the Agency has used a variety of financial
incentives that include tax increment rebates, low interest loans, fee
reimbursements, and commercial rehabilitation grants.
In 1993 the Agency formalized fee reimbursements through the Program. The
Program initially focused on downtown and east Washington Boulevard, and was
later expanded to include all properties within the Redevelopment Project Area. The
purpose of the Program is to reimburse business owners for their costs of City
permit fees and Los Angeles County Health Department permit fees. The Program
includes small businesses, offices and/or preferred pedestrian generating
businesses; non-profit entities are excluded|1010|. Typical fee reimbursements have
ranged from $10,000 - $15,000 depending on the total valuation of the work that was
completed.
The Program can be used to attract, retain and enhance businesses, improve the
City’s economic base and improve the appearance of buildings within the City. City of Culver City, California
Agenda Item Report
Successful businesses in attractive business districts generate additional tax dollars,
employment opportunities, caché and notoriety.
DISCUSSION:
Staff believes the Program’s guidelines are too general and is recommending the
following revisions:
1. Revise list of “preferred” businesses.
• Specify Target Areas for Restaurants - For the past several years, the
Program has primarily been marketed to prospective downtown tenants,
where key leasing activity in the City has taken place. The Program mostly
assisted restaurants with costly permit fees (e.g., sewer impact fees). Staff
recommends that the Program be revised to exclude restaurants in the
Commercial Downtown Zone where an abundance of restaurants currently
exist, and instead incentivize restaurant uses in underserved commercial
areas such as West Washington Blvd., East Washington Blvd., and
Sepulveda Blvd. Higher quality restaurants in underserved areas may also
help the Agency attract other unique tenants within that area.
• Art Galleries – Many of the art galleries located on East Washington
Boulevard (the “Art District”) occupy buildings that have not been seismically
retrofitted for assembly purposes. Staff proposes that the Program allow
existing or new art galleries to apply for fee incentive monies to assist with
seismic retrofits.
• Revise the list of Preferred Uses - Staff recommends that the businesses
listed below be better defined:
o Industrial & Manufacturing uses should be encouraged when they
satisfy goals outlined elsewhere in this report.
o Outdoor Dining technically is not a business, but a component of a
restaurant use and will be encouraged in specific target areas;
o Neighborhood-Oriented Service uses such as beauty salons, barber
shops, pharmacies and dry cleaners are important, but staff does not
believe they need to be incentivized;
o Commercial and professional businesses or offices should be
encouraged when they satisfy goals outlined elsewhere in this report.
• Eliminate reference to “small” businesses – Staff recommends that reference
to small businesses be eliminated so that businesses that fulfill the Agency
goal of creating quality job opportunities are able to take advantage of the
Program.
2. Promote the following uses and activities through the Program. City of Culver City, California
Agenda Item Report
• Incentivize the “creative community” – Staff recommends using the incentive
to promote a Culver City community in which talented and creative people
want to live, work and play. The creative class includes "creative
professionals" such as: scientists, engineers, innovators, artists, designers,
writers, musicians, art production studios, photography studios, film and
recording studios, post production studios and other similar uses, computer,
internet, graphic, architectural, interior design and other similar design
studios. Using fee reimbursements to attract the “creative class” may also
facilitate synergy between the Program and promotion of City events (such as
past City events IndieCade and Mercedes Benz Fashion week). Others to
assist may include craft, artisanal and design services.
• Retail Uses and Point of Sale Uses – Adding retail and point of sale uses to
the Program in order to encourage sales tax generating businesses to locate
in Culver City. This incentive will allow the Agency to be more proactive in
attracting retail stores and sales tax generating businesses.
• Building Revitalization – Applicants participating in the Program should make
a substantial investment in the property with noticeable building
improvements with environmentally efficient design.
• Business Expansion – The Program should also be used to help encourage
existing businesses to expand.
3. Economic Development Incentives may be combined with other Agency
Incentives. Staff recommends that the Program may be used in conjunction with
the Façade Matching Grant Program, the Gap Closer Program or with any other
financial assistance from the Redevelopment Agency if applicable as approved
by the Executive Director.
4. Create a Process to Approve Eligible Participants. The Program is currently
informally organized. Staff recommends establishing an approval process by
which applicants are authorized to participate in the Program and funds are
allocated prior to project construction.
Information about the Program would be available on the City’s Business
webpage, provided to businesses inquiring about Agency incentives and to
businesses that the Agency is trying to attract. To confirm eligibility, applicants
would need to complete and submit an application. The application includes
project information, proposed improvements, City benefits, and a set of proposed
plans.
Approved businesses must promote the Program’s goals and objectives.
Applications will be approved for businesses but no agreement is signed
between the two parties. Depending upon the scope of the project, a licensed City of Culver City, California
Agenda Item Report
general contractor may be required. Photographic documentation of the
completed project, copies of final permits, approved plans and paid permit
invoices would be submitted after project completion to receive reimbursement.
FISCAL ANALYSIS:
Approximately $100,000 in funds were appropriated for fiscal year 2009-10 in
account 55090200.618400 (Rehabilitation Grants – Fee Incentive). However, these
fees have been reduced to $50,000 with a budget transfer to help fund the approved
Tenant Improvement Loan at the former Crest House restaurant. Staff plans to
promote the Program in the upcoming year once modifications have been made and
new funds have been allocated for FY 2010-11.
MOTION:
That the Redevelopment Agency:
Authorize modifications to the Fee Incentive Program.
NOTES:
1
Over the past several years, the Program has assisted approximately 75-100 businesses (5-10 per
year). The Program information sheet states that the Agency will reimburse up to $15,000 in permit
fees for small, preferred businesses that are located in a redevelopment project area and generate
Culver City business taxes. The Program is marketed on a limited basis due to the limited amount of
funds ($100,000 annually).