TITLE
Recommendation to authorize City Manager to enter into a 25-year Location Agreement with Sales Center Development Concepts, LLC, and approving the retailer Office Depot. (Citywide)
DISCUSSION
On September 16, 2008, the City Council agreed to adopt a Location Agreement Program (LAP). LAP is designed to attract new businesses, create jobs and enhance business-to-business sales tax revenue to the City. To qualify for assistance, new businesses would be required to generate sales in excess of $50 million annually. The sales performance of these businesses would be verified by a business evaluation, which would include at least a three-year sales performance analysis. A LAP agreement would remit to an eligible business a negotiated portion of the sales taxes generated by it for an agreed upon period of time. Consistent with this previously approved program, City Council approval is requested to enter into a similar 25-year non-exclusive Location Agreement (Agreement) with Sales Center Development Concepts, LLC (Sales Center). Sales Center represents major national retailers, who may want to locate e-commerce and other types of sales offices in California. While the Agreement is with Sales Center, the sales tax revenues will be generated by retailers, who will enter into a separate client agreement with Sales Center to manage the associated sales tax rebate process.
The Agreement with Sales Center will establish the contractual relationship between Sales Center and the City, as well as some specific requirements for Office Depot. Under the proposed Agreement, the following terms would apply:
· The Agreement would be for 25 years.
· Sales Center would receive 70 percent of the sales tax, and the City would retain 30 percent (of the 1 percent sales tax remitted to the City from the State). Sales Center would distribute their share of the sales tax under the terms of the associated client agreement with Office Depot.
· Office Depot will locate a...
Click here for full text