TITLE
Recommendation to authorize City Manager to execute all necessary documents to reinstate a Sales Tax Incentive Program Agreement with HTL Automotive, Inc., dba Hooman Toyota of Long Beach. (District 4)
DISCUSSION
Approval is recommended to reinstate a Sales Tax Incentive Program agreement (Agreement) with HTL Automotive, Inc., dba Hooman Toyota of Long Beach (Hooman Toyota). The term of the Agreement with Hooman Toyota is from October 1, 2009 to September 30, 2013. The purpose of the Agreement is to retain a local business that was significantly affected during an extraordinary economic downturn by offsetting additional advertising and dealer rent expenses.
On March 17, 1992, the City Council approved a Sales Tax . Incentive Program (Program) to encourage large-scale retail development, stimulate private investment in the retail sector and enhance sales tax revenue in the City. New retail businesses or existing businesses planning to expand, which generate more than $5 million in annual sales, may be eligible for the Program. For an expanding business, the City may return up to 50 percent of the sales tax generated in excess of an agreed upon base.
The City has entered into sales tax agreements when a significant financing gap exists that would result in the failure to retain or attract a key business. A number of . conditions can trigger the financing gap including the marketing or operational costs above national ratios. According to a report prepared by Keyser Marston Associates, Hooman Toyota is currently paying higher than the national average in lease payments, and advertising costs are significantly above average. The advertising gap will narrow as the business reaches its stabilization year.
On December 17, 1996, the City Council approved a Sales Tax Incentive Program Agreement to provide financial assistance to retain Salta, LLC dba Beach Toyota (Attachment A). The Agreement provided for a 50/50 sharing of sales tax over a base of $135,413 to...
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