HomeMy WebLinkAboutItem 21 - Public Hearing for Five-Year Economic Development Subsidy Report for TACenergy Community Development Agency
www.santa-ana.org/community-development
Item # 21
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
March 4, 2025
TOPIC: Public Hearing for Five-Year Economic Development Subsidy Report for
TACenergy
AGENDA TITLE
Public Hearing for Five-Year Economic Development Subsidy Report for TACenergy
Legal notice published in the OC Reporter on February 21, 2025.
RECOMMENDED ACTION
1. Conduct public hearing to consider any written or oral comments on the information
contained in the Five-Year Economic Development Subsidy report for TACenergy.
2. Receive and file report.
GOVERNMENT CODE §84308 APPLIES: No
DISCUSSION
On March 3, 2020, the City Council approved a sales tax sharing agreement with
TACenergy, one of the largest national wholesale fuel suppliers in the country, with
annual sales exceeding 2.7 billion gallons and more than $5 billion in revenue. During
the term of the 25-year agreement, the City shares 50% of the sales tax generated by
TACenergy.
Government Code Section 53083 requires that the City Council must hold a noticed
public hearing and, prior to the public hearing, provide information to the public through
the City's website regarding the proposed economic development subsidy. As part of
the approval process, an economic development subsidy report was completed and
submitted detailing the structure of the public subsidy, projected tax benefits, and
estimated number of jobs that would be created by the subsidy. This report has been
available to the public and posted on the City's website until the end date of the
economic development subsidy.
Government Code 53083 also requires that within five-years of the approval of the
subsidy, the City must prepare a new subsidy report that includes the original subsidy
information plus net tax revenue and net number of jobs created by the subsidy. The
purpose of this public hearing is to consider written or oral comments on the information
contained in the subsidy report.
Public Hearing Five-Year Subsidy Report TACenergy
March 4, 2025
Page 2
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1
The City has prepared the Five-Year Subsidy Report (Exhibit 1) which includes the
following key points for TACenergy:
•The Agreement term is for twenty-five years (through December 31, 2045);
•The City has retained $2,048,530 of total sales tax revenues;
•The City has provided TACenergy with $2,048,530 of sales tax rebates;
•A total of 20 full time jobs were added in association with the economic subsidy.
Economic Development Division staff continue to oversee compliance, ensuring that all
requirements are met in accordance with the terms of the agreement. As required by
law, a notice of public hearing was published and the Five-Year Economic Development
Subsidy report has been posted on the City’s website: https://www.santa-
ana.org/subsidy-reports/.
FISCAL IMPACT
There is no fiscal impact associated with this action.
EXHIBIT(S)
1. Five-Year Subsidy Report - TACenergy
2. Proof of Publication
Submitted By: Michael L. Garcia, Executive Director of Community Development
Approved By: Alvaro Nuñez, City Manager
Five-Year Economic Development Subsidy Report
Pursuant to Government Code Section 53083
For a Sales Tax Sharing Agreement between the City of Santa Ana and
TACenergy at 4 Hutton Centre, Ste 700, Santa Ana, CA
Pursuant to Government Code Section 53083, the City Council of the City of Santa Ana
must hold a noticed public hearing and, prior to the public hearing and within five-years
of approval of the subsidy, provide all of the following information in written form and
available to the public through the City’s website regarding a proposed economic
development subsidy provided by the City pursuant to a Sales Tax Sharing Agreement
between the City of Santa Ana and TACenergy (Agreement). Notice was published
on the City’s website for a public hearing to be held on March 4, 2025
The purpose of this report is to provide the information required pursuant to Government
Code Section 53083 in regards to the Agreement. This report shall remain available to
the public and posted on the City’s website until the end date of the economic
development subsidy, as further described in number 2 below.
(1)The name and address of all corporations or any other business entities,
except for sole proprietorships, that are the beneficiary of the economic
development subsidy, if applicable.
The Agreement is with TACenergy, who owns and operates the existing business that
will benefit for the economic subsidy:
TACenergy
4 Hutton Centre Dr, Ste 700
Santa Ana, CA 92707
(2)The start and end dates and schedule, if applicable, for the economic
development subsidy.
Upon City Council approval, the proposed agreement commenced on April 1, 2020,
and ends on December 31, 2045. The economic development subsidy be paid
quarterly within thirty days of receipt from TACenergy of the required documentation
per executed Agreement.
(3)A description of the economic development subsidy, including the estimated
total amount of the expenditure of public funds by, or of revenue lost to, the
local agency as a result of the economic development subsidy.
The economic development subsidy is equal to fifty percent (50%) of the sales tax
received by the City quarterly, for each year, during the 25-year agreement period.
No expenditure of public funds is anticipated by this agreement.
EXHIBIT 1
(4) A statement of the public purposes for the economic development subsidy.
On August 5, 2013, the City Council approved the execution of a sales tax sharing
agreement with IPC (USA), Inc., an independent wholesale distributor of gasoline,
diesel, jet fuel, and other refined petroleum products throughout the United States.
The Agreement provided for a 50 percent sharing of local sales tax generation, plus
a 70 percent (IPC) and 30 percent (City) sharing of additional sales tax generation
above $1.4 million dollars. On November 1, 2019, IPC (USA), Inc. was acquired by
TACenergy, one of the largest national wholesale fuel suppliers in the county, with
annual sales exceeding 2.7 billion gallons and more than $5 billion in revenue.
Since the agreements execution, IPC has been a top ten sales tax producer for the
City. This sales tax generated is directly deposited into the City’s General Fund which
is primarily used to fund police, fire, homeless reduction, and parks and recreational
services for the City’s residents.
Without this agreement, several of the City’s general services may be cut or reduced
for its residents.
(5) The net tax revenue accruing to the local agency as a result of the economic
development subsidy.
Since the commencement of the Agreement, $4,097,060 in total sales tax has been
generated by TACenergy. The City has retained 50% of that amount: $2,048,530.
(6) The net number of jobs created by the economic development subsidy, broken
down by full-time, part-time and temporary positions.
The Agreement has retained approximately 20 positions. The company has reported
that challenges arising from the COVID-19 pandemic, along with regulatory changes
at both the Federal and State levels, have impacted the fuel sales sector. However,
their overall growth has aligned with the broader trends in transportation fuel demand,
and it is expected that further hiring will take place in the near future.
EXHIBIT 1
This space for filing stamp only
OR #:
O R A N G E C O U N T Y R E P O R T E R
~ SINCE 1921 ~
600 W. Santa Ana Blvd., Suite 205, Santa Ana, California 92701-4542
Telephone (714) 543-2027 / Fax (714) 542-6841
PROOF OF PUBLICATION
(2015.5 C.C.P.)
State of Calif ornia )
County of Orange ) ss
Notice Type:
Ad Description:
I am a citizen of the United States and a resident of the State of California; I am
over the age of eighteen years, and not a party to or interested in the above
entitled matter. I am the principal clerk of the printer and publisher of the
ORANGE COUNTY REPORTER, a newspaper published in the English
language in the City of Santa Ana, and adjudged a newspaper of general
circulation as defined by the laws of the State of California by the Superior
Court of the County of Orange, State of California, under date of June 2, 1922,
Case No. 13,421. That the notice, of which the annexed is a printed copy, has
been published in each regular and entire issue of said newspaper and not in
any supplement thereof on the following dates, to-wit:
Executed on: 10/10/2004
At Los Angeles, California
I certify (or declare) under penalty of perjury that the foregoing is true and
correct.
Signature
O R A N G E C O U N T Y R E P O R T E R
~ SINCE 1921 ~
600 W SANTA ANA BLVD STE 812, SANTA ANA, CA 92701
(714) 543-2027 (714) 542-6841
OR 3896990
JENNIFER HALL
CITY OF SANTA ANA/CITY CLERK
20 CIVIC CENTER PLAZA M-30
SANTA ANA, CA - 92701
HRG - NOTICE OF HEARING
PH Notice - TACenergy
I am a citizen of the United States and a resident of the State of California; I am
over the age of eighteen years, and not a party to or interested in the above
entitled matter. I am the principal clerk of the printer and publisher of the
ORANGE COUNTY REPORTER, a newspaper published in the English
language in the city of SANTA ANA, county of ORANGE, and adjudged a
newspaper of general circulation as defined by the laws of the State of
California by the Superior Court of the County of ORANGE, State of California,
under date 06/20/1922, Case No. 13421. That the notice, of which the
annexed is a printed copy, has been published in each regular and entire issue
of said newspaper and not in any supplement thereof on the following dates,
to-wit:
02/21/2025
02/21/2025
ORANGE
!A000007031734!
Email
NOTICE OF PUBLIC HEARING
BEFORE THE SANTA ANA CITY
COUNCIL OF THE CITY OF SANTA
ANA
NOTICE IS HEREBY GIVEN -The City
Council of the City of Santa Ana will hold
a public hearing to consider a Five-Year
Economic Development Subsidy Report
for TACenergy in conformance with
California Government Code, Section
53083.
TAC Energy Project Description:The
economic development subsidy is equal
to fifty percent (50%) of the sales tax
received by the City quarterly, for each
year, during the 25-year agreement
period. The subsidy report will be made
available online before the scheduled
Public Hearing at: https://www.santa-
ana.org/cd/economic-development-
subsidy-reports
Meeting Time and Date- This public
hearing will be held on Tuesday, March 4,
2025, at 5:30 p.m. , or as soon thereafter
as the matter may be heard, in the City
Council Chamber, 22 Civic Center Plaza,
Santa Ana, CA 92701.Members of the
public may attend this meeting in-
person or join via Zoom.For the most
up to date information on how to
participate virtually in this meeting, please
visit https://www.santa-ana.org/agendas-
and-minutes/.
Written Comments:If you are unable to
participate in the meeting, you may send
written comments by e-mail to
eComment@santa-ana.org (reference the
Agenda Item #in the subject line) or mail
to Jennifer L. Hall, City Clerk, City of
Santa Ana, 20 Civic Center Plaza – M30,
Santa Ana, CA 92701. Deadline to submit
written comments is 4:00 p.m.on the day
ofthe meeting. Comments received after
the deadline may not be distributed to the
City Council but will be made part of the
record.
Where To Get More Information - All
staff reports regarding any item on this
agenda are available for public inspection
in the City Clerk's Office during regular
business hours and posted on the City's
website the Tuesday prior to the Council
meeting at: www.santa-ana.org/agendas-
and-minutes.
Who To Contact For Questions - Should
you have any questions, please contact
Marc Morley at (714) 647-5477 or you can
send an email to mmorley@santa-
ana.org.
Si tiene preguntas en español, favor de
llamar al 714-647-6520. N u c n liên l c
b ng ti ng Vi t, xin i n tho i cho
Kristie Ha s (714) 667-2206.
If you challenge the decision on the above
matter, you may be limited to raising only
those issues you or someone else raised
at the public hearing described in this
notice, or in written correspondence
delivered to the City Council of the City of
Santa Ana at, or prior to, the public
hearing.
Jennifer L. Hall, CMC
City Clerk
2/19/2025
2/21/25
OR-3896990#
EXHIBIT 2