TITLE
Recommendation to authorize City Manager to execute all related documents to implement a Sales Tax Incentive Agreement with Cabe Brothers for the expansion of the Toyota dealership located at
2895 Long Beach Boulevard. (District 6)
DISCUSSION
Approval is recommended to enter into a Sales Tax Incentive Agreement (Agreement) with Cabe Brothers (Cabe) to support expansion of the Toyota dealership located at 2895 Long Beach Boulevard. Cabe has been in business since 1966.
On March 17, 1992, the City Council approved a Sales Tax Incentive Program (Program) to encourage large-scale development, stimulate private investment in the retail sector, and enhance sales tax revenue to the City of Long Beach (City). New or existing retail businesses planning to expand, that generate more than $5 million in taxable sales, may be eligible for the Program. For expanding businesses, the City may agree to share up to 50 percent of the sales tax generated in excess of a predetermined sales tax base. Cabe’s annual taxable sales have averaged $25 million since 1999.
Cabe has submitted conceptual plans to improve and expand its existing facility to a total of 38,000 square feet. The total cost of the proposed improvement and expansion is estimated at $5 million. Keyser Marston Associates (KMA) conducted an independent analysis of Cabe’s operating expenses and revenues. Based on an analysis of Cabe’s current revenues and expenses, KMA has found that the cost of the expansion and improvements are not economically feasible, and a $3 million funding gap exists. Cabe recently completed the purchase of real property located immediately south of their existing location to allow for expansion and will incur significant predevelopment costs to realize the expansion. As such, it is being recommended that the reimbursement provisions of the proposed Agreement commence in advance of completion of construction.
It is proposed that the City enter into a Sales Tax Incentive Agreement with...
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