HomeMy WebLinkAbout25I - MOU EMPOWERMENT ZONEREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
SEPTEMBER 2, 2008
TITLE:
EMPOWERMENT ZONE MEMORANDUM OF
AGREEMENT WITH HUD
CI ANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
^ As Recommended
^ As Amended
^ Ordinance on 1ST Reading
^ Ordinance on 2"d Reading
^ Implementing Resolution
^ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Authorize the Mayor to execute an amendment to the Memorandum of
Agreement with the U.S. Department of Housing and Urban Development.
DISCUSSION
In January 1999, the City of Santa Ana received designation as a Round II
Federal Empowerment Zone from the U.S. Department of Housing and Urban
Development (HUD). Santa Ana was one of 15 cities in the nation, and the
only city in California, awarded this urban zone designation.
The City submitted a boundary modification request to HUD to expand the
Empowerment Zone boundaries, specifically Developable Site #3, by 682.8
acres to allow for an increase in job opportunities for Zone residents.
Additionally, the expansion would provide 1,230 businesses with the
opportunity to utilize the federal tax incentives. Statutory regulations
allow Round II Empowerment Zones to have up to three non-contiguous
parcels, not to exceed 2,000 acres that may be developed for commercial
or industrial purposes. Developable Site #3 was the only area that met
the regulatory requirements for expansion.
On July 1, 2008 HUD informed the City of its approval of the City's
request for boundary modification. An amendment to the Memorandum of
Agreement (Exhibit 1) has been prepared by HUD and requires the Mayor's
signature.
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Empowerment Zone MOA with HUD
September 2, 2008
Page 2
FISCAL IMPACT
There is no fiscal impact associated with this action.
Cynthia J. Nelson
Deputy City Manager for Development Services
Community Development Agency
CJN/LAS/kcg
090208 EZ MOA with HUD
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U.S. DEP:~R'r~IEN'T OF HOC'SINL AND URBAN DE~'ELOPJIEN'1'
,•# ~IIIIIII * 1b';\SI II\C;TON. DC '0310-7000
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\tiSltil:\~I I tiP('Kla:\K1' PUIZ
(1)~I~Atl'~Ill~ PI_:AA'~ING :AEI) I~[\PLt1CAII~N f
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The Honorable Miguel A. Pulido
Mayor of the City of Santa Ana
20 Civic Center Plaza
P.O. Box 1988
Santa Aua, California 92702
Dear Mayor Pulido:
Thank you for your letter of June 24, 2008, in filll support of Linda Summers' letter dated
June 5, 2008, requesting a modification to the Santa Ana Empowel•n~ent Zone's Developable Site
#3 to include an additional 682.8 acres, and to withdraw the City's original request to modify
Developable Site #1 as well. No modifications were requested for the Developable Sites identified
as Site # 1 and #2. Thtls, the resulting size of all three sites, upon approval of the modification to
Developable Site # 3, will be 1,742 acres. Reference the enclosed Exhibit A. Before addressing the
details of the Department's review of your expansion request, I am pleased to notify you that your
request to expand Developable Site #3 pursuant to 24 CFR § 598.425(b) has been approved.
Our review of this request focused on the definition of a developable site as provided for in the
Taxpayer Relief Act of 1997 which states that a Round II Empowerment Zone may have up to three
noncontiguous parcels, not to exceed 2,000 acres, and that may be developed for commercial or
industrial purposes. The map found at Exhibit B of your modification request identifies the exact
locations of all three developable sites and clearly shows them as noncontiguous "parcels" within
the meaning of the statutory definition. The attached Exhibit C showing the "Santa Ana
Empowerment Zone Proposed Boundary Modification" for Site #3 supports the City of Santa Ana's
contention that this expansion has a zero population; accordingly, HUD deems the Zone to have met
the population requirements of 24 CFR § 598.100 (a).
In seeking to expand the Zone, the June 5th letter highlighted the benefits that would accrue as a
result of the expansion as well as successfill efforts to date in promoting the $1 1 billion tax incentive
package to your business community. In this regard, the letter also summarizes the strides that the
Santa Ana Empowerment Zone has made in using available federal tax incentives, such as the
issuance of 1,662 wage credit affidavits representing $4.8 million in federal tax savings to your
local businesses and the issuance of five Industrial Development Bonds totaling $27. I million.
In her June 5th letter, Ms. Summers also notes that given the most current economic data, there is
still a real need for increased job opportunities for Zone residents in Santa Ana. This is supported
by a comparison of Santa Ana's 6.9 percent unemployment rate based on February 2008 labor force
data for Local Workforce Investment Areas in California compared to the national rate of
Exhibit 1
~c~~~~.hudgo~' espanol.hud.gov
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-4.` prruunt lur the sanrc pe'I"Il1d. 1'lllllltl"nle)I'C, lhe' request Icltcl' also points out that the expansion of
Slle n; will pru~ ide l,~ ~-1 businesses in the expanded site with the opportunity to take adv.u~ta~e of
the lcder,rl tax inrenti~ es, thereby, increasing the likelihood ufsustaining ecununric gru~~ th ~~ ithin
the 7.unc.
The .lone nth letter also notes that the espansiun ul~Sitc ~~ is in close proximity to thclone's
residential areas Working it geu~~raphically accessible to "Lune residents in search oi~jubs. The City's
analysis ol-businesses located In the expanded Deyelupablc Site ~ ~ ane} su--roundin~, areas ~yithin
and outside of Census Tract 7-i 1.U(~ ~~ as basal on the ezistin~ City zoning district records. This
analysis supports the: City's yie~y that the Site: ~ ~ expansion pl'CSe11IS an excellent nlatl'll for the t~~pe
of labor force pool that is currently available in the Santa :4na Empo~yerment Zone residential areas.
In closing, please have the authorizing officials sign the Amendment and express mail it to
'its. Pamela Giekas Spring, Director, Office of Community Rene~yal, 351 7th Street, SW, Room
7l ~0, ~b'ashin~ton, D.C. 201 U. Since the prompt execution of the enclosed Amendment is critical
to the C'ity's implementation of the Zone's developable site plans, }have signed the Amendment
befo--e the other authorized signatories. If you have questions regarding this matter, please feel tree
to call !~•1r. Robert Duncan, Associate Deputy Assistant Secretary for Economic Development at
?U2-~}0?-qG~ 1.
Sincerely,
General Deputy Assistant Secretary
for Conununity Planning and Development
Enclosures
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AMENDMENT #1 TO THE MEMORANDUM OF AGREEMENT
Santa Ana, California Empowerment Zone
This agreement (the "Amendment") amends the Memorandwn of Agreement for the Santa Ana,
California Empowerment Zone, among the Department of Housing and Urban Development
("HUD"), the State of California and the City of Santa Ana (the "Nominating Entities").
WHEREAS, the Santa A~1a Empowerment Zone as originally designated by HUD
consists of 1990 Census Tracts 744.03; 744.05; 745.01; 746.02; 748.02;
749.01; 749.02; along with three developable sites known as Site #1, Site #2 and Site #3;
WHEREAS, Developable Site #3 has been expanded to include a total of 682.8 acres by
means of a boundary modification request in accordance with 24 CFR 598.425(b);
WHEREAS, developable sites are exempt from poverty criteria pursuant to 24 CFR
598.1 15 (a), but are subject to the population requirements of 24 CFR 598.100 (a);
WHEREAS, Developable Site #3, totaling 682.8 acres has zero population, 24 CFR
598.100(a) is not applicable;
WHEREAS, pursuant to 26 U.S.C. § 1391(g)(3)(A)(iii), 24CFR 598.3 and 24 CFR
598.115(c), an urban Round II Empowerment Zone may have up to three noncontiguous parcels
that may be developed for commercial or industrial purposes, and that the total acreage of all
three sites may not exceed a total of 2000 acres without regard to certain poverty rate
requirements;
WHEREAS, the Santa Ana Empowerment Zone has three noncontiguous developable
sites and the total acres of all three developable sites, including the acres of the area of
Developable Site #3, is 1,742 acres. Further, Site #3 is a commercial area containing an
estimated 1,223 businesses that will have the opportunity to take advantage of the $11 billion tax
incentive package available to EZ/RC businesses and has a zero population;
WHEREAS, the Santa Ana Empowerment Corporation (SAEC) has affirmed that in
February 2005, the Zone's governance board approved the expansion of Developable Site #3
where all governance board meetings are open to the public, and that the expansion has full
community support. Further, this Developable Site #3 expansion is consistent with the HUD
approved Santa Ana's Strategic Plan;
WHEREAS, HUD has determined that the information furnished by the City of Santa
Ana and the Santa Ana Empowerment Corporation Inc. is reasonably accurate and consistent
with the forgoing findings; and
f ^~'
WHEREAS, HUD has, by letter dated' ~~'' `~~ ,modified the designation of the
Santa Ana, California Empowerment Zone by expanding its boundary to include the expanded
area of the Developable Site #3.
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NOW, THEREFORE, in consideration of the mutual obligations effected by this Amendment,
the parties agree as follows:
HUD confirms and the Nominating Entities acknowledge, that the boundary of
the Santa Ana, California Empowerment Zone has been expanded to include an
addition to Developable Site #3 of 682.8 acres.
All references in the Memorandum of Agreement to the Santa Ana, California
Empowerment Zone, and all the obligations of the Nominating Entities stated
in the Memorandum of Agreement that relate to the Zone shall be deemed to
refer to and relate to the Santa Ana, California Empowerment Zone as
expanded to include the expanded area of Developable Site #3.
3. Other than the modifications stated above, all of the provisions of the
Memorandum of Agreement remain unchanged and in full force and effect.
4. of is AJUe~ndm~nay be executed in counterparts and shall be effective as
U.S. Department of Housing and Urban Development
Authorized Signature Title Date
Nelson R. Bregon General Deputy Assistant
Secretary for Community
Planning and Development
State of California
Authorized Signature Title Date
City of Santa Ana, California
Authorized Signature Title Date
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