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HomeMy WebLinkAbout12/02/2003, C3 - AMENDMENTS TO THE 1999 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM TO REALLOCATE EVC LOAN FUND 1 council D3 j acEnaa Report tk.i CITY OF SAN LUIS O B I S P O FROM: John Mandeville, Community velopment Director Prepared By: Jeff Hook, Associate Plann SUBJECT: AMENDMENTS TO THE 1999 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM TO REALLOCATE EVC LOAN FUNDS FOR A NEW ECONOMIC DEVELOPMENT/JOB RETENTION ACTIVITY CAO RECOMMENDATION As recommended by the Human Relations Commission, adopt a resolution recommending the San Luis Obispo County Board of Supervisors amend the 1999 Urban County Consolidated Plan by reallocating $40,600 of CDBG funds for the EVC Revolving Loan fund to a new activity, Economic Development/Job Retention for Cole Motors. DISCUSSION Background Stanley Motors plans to relocate from its Downtown location of 53 years. For many years, the dealership has sought to relocate from their present location to a more conducive location within the community. They have attempted to do so in a way desired by the City and have been remarkably patient. Thus far, they have resisted efforts to attract them to other communities and have remained loyal to their"hometown roots". However, the dealership has simply reached a point where another site must be secured without further delay. They identified a new in-city site on Broad Street at Capitolio Way (former Von's Market site) and plan to relocate the business in 2004. Therefore, after many years of searching and failing to find an acceptable and feasible site, with some direction from the Council — and with the possibility of City incentives — Stanley Motors zeroed in on the Broad Street site. The relocation of Stanley Motors (to be known as Cole Motors in the new location) creates an opportunity for multiple community benefits: to retain a long-time community business, to retain low-income jobs in the City, to help achieve Downtown land use goals (to relocate auto sales out of the Downtown), and to enhance City sales tax revenues. The business move will, however, require significant capital outlay and investment by Stanley Motors. To help retain this critically important business and preserve local jobs, the City Council supported the concept of using. CDBG funds to offset the Inclusionary Housing In-Lieu Fee for the Cole Motors Project (Council Minutes and Agenda Report attached). Housing in-lieu fees must be paid prior to or at building occupancy. Because relocation is planned for Spring 2004, an amendment to a previous year's CDBG program is needed to allow timely CDBG funding. A request for 2004 CDBG funding for this purpose could probably not be funded before August 2004. e3A I Council Agenda Report—Amendments to the 1999 CDBG Program Page 2 Human Relations Commission Action On November 5, 2003, the Human Relations Commission (HRC) held a public meeting to consider this amendment. There was no public testimony on this item. The Commission recommended amending the City's 1999 CDBG Program. As described in the attached minutes, the Commission voted 4:2 (Wolff, Lamb) with one commissioner absent, to support the reallocation of $40,600 in unused CDBG Revolving Loan Funds for a new activity — economic development/job retention for Cole Motors. Most Commissioners felt the amendment was consistent with City CDBG funding priorities and would help retain low- and moderate- income jobs in the City. Commissioners Wolff and Lamb dissented and felt the proposed CDBG grant for Cole Motors was not necessary to retain jobs and would reduce funding for affordable housing. Previous Council Direction At its August 19`h, 2003 public hearing, Council considered relocation and retention incentives for Stanley Motors (Cole Motors) in the broader context of General Plan policies and Major Council Goals. On a unanimous vote, Council members: a) approved using City Community Development Block Grant funds to offset the project's Inclusionary Housing Fee, and 2) approved the calculation of the Cole Motors Project's Building Permit fees at the rates applicable on July 7, 2003, the date the Project application was deemed complete by the Community Development Department. What's Proposed Based on the estimated construction costs for the new auto dealership building, the required in-lieu housing fee will be $40,600. Staff proposes reallocating 1999 CDBG funds already allocated to economic development to offset the fee. The proposed amendments are shown in Table 1: Table 1: 1999 CDBG Program Year Amendments Grantee Activity Existing Proposed Funding Funding Economic Revolving Loan Fund' $90,056 $49,456 Vitality Corp. City of SLO Economic Development/Job' $0 $40,600 Retention, Stanley/Cole Motors 'Includes $20,000 in Loan Administration funds. 'New activity for 1999 Program Year. The reallocation would take funds already earmarked for economic development and reallocate them to another economic development purpose. It would not reduce CDBG funding for affordable housing. Prior to occupancy of its new dealership, Cole Motors would pay the In- 3 �� I • I Council Agenda Report—Amendments to the 1999 CDBG Program Page 3 Lieu housing fee of $40,600. The City would then reimburse Cole Motors using the proposed CDBG funding. The proposed use of CDBG funds for economic development/job retention meets a National Objective by benefiting low- or moderate-income persons and is an eligible activity under HUD rules. The proposed use of CDBG funds would retain 17 low or moderate-income level jobs, including six full-time and 11 part-time jobs, within the City of San Luis Obispo. But for this offer of City economic assistance, Stanley Motors would have moved its business location outside the City of San Luis Obispo, taking with it low- and moderate-income jobs. The proposed amendment would leave about $49,000 in EVC Revolving Loan Funds to continue to make small business loans in San Luis Obispo City. EVC Loan funds have been used very slowly in the last four years, and the remaining balance should be adequate to continue this activity at current levels. The EVC is aware of the proposed reallocation of CDBG funds. What's Next? This reallocation is proposed as a mid-year Consolidated Plan amendment. If the Council supports the amendment, the item will be considered, along with several other program amendments for the Urban County, at the Board of Supervisors meeting on December 9'". ALTERNATIVES Council may choose not to amend the 1999 CDBG program or to reallocate a different amount of CDBG funding. A decision not to use CDBG funds leaves open the question of how to fund the approved incentive, since General Fund monies have not been budgeted for this purpose. ATTACHMENTS 1. Draft Council Resolution 2. Letter From Stanley Motors 3. Draft HRC Minutes 4. City Council Action Minutes, August 19, 2003 5. Quarterly Report, 1999 CDBG Program Year Jh/CDBGI1999 CDBGProgr mamend.Colemotors.ccrpt c 3- 3 Attachment RESOLUTION NO. (2003 Series) 1 A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING AMENDMENTS TO THE 2003 CDBG PROGRAM WHEREAS, the City of San Luis Obispo is a participating jurisdiction in the San Luis Obispo Urban County, along with the cities of Arroyo Grande, Atascadero, Grover Beach, and Paso Robles, and the County of San Luis Obispo; and WHEREAS, said cities and County cooperatively administer several federal grant programs under the provisions of the Cooperative Agreement approved by the San Luis Obispo City Council on July 13, 1999 and as amended on September 7, 1999, and under applicable U.S. Department of Housing and Urban Development Department (HUD) rules, including the Community Development Block Grant (CDBG) Program; and WHEREAS, the Human Relations Commission held a public hearing on a request to amend the City's 1999 CDBG Program to reallocate $40,600 in Economic Vitality Corporation Revolving Loan Funds to a new activity to be added in 1999 entitled "Economic Development/Job Retention for Stanley/Cole Motors", and at said meeting, voted to recommend that the Council approve the amendment and forward a recommendation to the San Luis Obispo County Board of Supervisors to amend the 1999 Urban County Consolidated Plan to implement the amendments; and WHEREAS, the Council has held a public hearing to consider the amendment request, pursuant to procedures in the Urban County's Community Participation Plan, and has considered the Human Relations Commission's recommendation and comments, public testimony, staff reports, previous Council actions, and approved 1999 CDBG Program; and WHEREAS, the Council intends that the proposed amendments be included with multi- year, countywide amendments to the Urban County's Consolidated Plans being considered by the Board of Supervisors at its December 9, 2003 public meeting. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Environmental Determination. The Council hereby determines that the proposed funding actions are not "projects" as defined by Section 21065 of the California Environmental Quality Act (CEQA), since they will not cause a direct or indirect physical change in the environment and do not involve the issuance of a lease, permit, license, certificate or other entitlement. Consequently, no further environmental review is necessary. SECTION 2. Amendments to the 1999 Community Development Block Program. The City's 1999 Community Development Block Program is hereby amended, as shown in Exhibit A. SECTION 3. Board of Supervisors Consideration. The Council hereby directs staff to forward the above actions to the San Luis Obispo County Board of Supervisors for consideration prior to the Board's final action on amendments to the Urban County's 1999 Consolidated Plan. C34 Resolution No. (2003 Series) Attachment 1 Page 2 Upon motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was adopted this 2nd day of December, 2003. Mayor Dave Romero ATTEST: Lee Price, City Clerk APPROVED AS TO FORM: Jon than ell, City Attorney Exhibits: A. Amendments to the 1999 CDBG Program for the City of San Luis Obispo jh/Ucdbg/councilmsolution l2-2-03 C3�� Resolution No. (2003 Series) Attachment i Page 3 Exhibit A City of San Luis Obispo Amendments to the 1999 CDBG Program Grantee Activity Existing Proposed Funding Funding Economic Revolving Loan Fund' $90,056 $49,456 Vitality Corp. City of SLO Economic Development/Job $0 $40,600 Retention, Stanley/Cole Motors' 'Includes $20,000 in Loan Administration funds. 'New activity for 1999 Program Year. U:3�� FSTANLE SEP 2. 3 2003 On the road to driving excellence. 1330 Monterey St., PO Box 191,San Luis Obispo,CA 93406-0191 - (805) 543-7321 4 (800) 549-8500• FAX(805) 543-1949 www.stanleymotors.com• EMAIL info@stanleymotors.com Attachment 2 September 22, 2003 - - --- - Shelly Stanwyck City of San Luis Obispo 990 Palm Street San Luis Obispo, CA. 93401 Dear Shelly: I am writing this letter for the sole purpose of requesting the City to provide funds in the amount of$40,600 for the retention of our business and jobs within the City of San Luis Obispo. As you know, we have been in business for over fifty years. Without help from the City, we would have been forced to move our business to either Atascadero or Pismo Beach /Arroyo Grande. This would have resulted in the loss of 40 plus jobs. We have diligently been trying to relocate within this City for over twelve (12) years to no avail. The location on Broad Street is our last chance, but we must have your help! We currently have seventeen (17) low or moderate-income level jobs that will be retained if we remain in San Luis Obispo. This includes six (6) full time and eleven (11) part time. According to Federal and State guidelines, low or moderate income is a person earning less than $32,300 per year. We appreciate any help the City can provide us. 7ey ole President JAC/Ir FIVE STAR Ofelf OfOoOi CHRYSLER Plymouths De ue HUMAN RELATIONS COMMISSION DRAFT MINUTES Attachment 3 November 5, 2003 5:00 P.M. City Hall Council Hearing Room 990 Palm Street CALL TO ORDER: PRESENT: Chairperson Janna Nichols, Vice Chairperson Lamb, Commissioners Maureen Forsberg, Bryan Gingg, Tom Hutchings, and Paul Wolff ABSENT: Commissioner Elise Wheeler STAFF PRESENT: Jill Sylvain, Human Resources Analyst; Jeff Hook, Associate Planner, Wendy George, Assistant City Administrative Officer; and Mary Kopecky, Human Resources Executive Assistant CONSIDERATION OF MINUTES: October 1, 2003 ACTION`. Moved by Lamb/Hutchings to approve the minutes of October 1, 2003 as submitted; motion carried 7:0. PUBLIC COMMENT There were no public comments. Item 1. AMENDMENTS TO THE 1999 COMMUNITY DEVELOPMENT BLOC_ K GRANT-PROGRAM ICDBGI.YEAR TO REALLOCATE $40,660 IN ECONOMIC VITALITY CORPORATION LOAN FUNDS FOR ECONOMIC DEVELOPMENT/JOB RETENTION FOR COLE MOTORS. (HOOK) Associate Planner Hook summarized the recommended amendments to the 1999 Community Development Block Grant Program to reallocate EVC funds already earmarked for economic development to another economic purpose. The funds are planned to help retain an important business (Stanley [Cole] Motors) and preserve local jobs by using CDBG funds to pay the Inclusionary Housing In-Lieu Fee for Cole Motors. CADocuments and Settings\jhook\Local SettingsUempWovember 5,2003 minutes.doc C3=8 I Human Relations Commission Minutes Attachment 3 November 5, 2003 Page 2 Lengthy Human Relations Commission discussion ensued. Commissioner Wolff opposed the amendment. He expressed concern that adoption of this amendment would set a precedent and disagreed with the criteria used in formulating amendment recommendations. Vice Chairperson Lamb opposed the amendment. He hoped EVC funds could be distributed differently and expressed concern that approval of this amendment would hurt funding for affordable housing in the City. Assistant City Administrative Officer George noted that Council supported retaining auto dealers in San Luis Obispo. She stated that it was very common for cities to use grant money as an incentive to retain businesses. She affirmed that the funds were allocated for economic development and that approving the amendment would not divert funding away from housing. Commissioner Hutchings inquired if the City had a commitment from Cole Motors to retain the seventeen jobs that would be lost if the business left San Luis Obispo. Assistant City Administrative Officer George noted the jobs were part of the auto dealership's operation. She stated the dealership had been in business in San Luis Obispo for 52 years and the jobs would be retained. Chairperson Nichols inquired if the EVC were supportive of reallocating the funds. Assistant City Administrative Officer George indicated they favored the reallocation. ACTION: Moved by Hutchings/ Gingg to support an amendment to the 1999 CDBG Program Funding: 1) reallocating $40,600 from the Economic Vitality Corporation Revolving Loan Fund to the City of San Luis Obispo Economic Development Program; 2) Using the reallocated funds to pay the required in-lieu housing fee for Stanley (Cole) Motors; motion carried 4:2 (Wolff and Lamb) Item 2. QUARTERLY REPORT- HOMELESS SHELTER. (MANNING) Catherine Manning, EOC Director of Homeless Services, summarized events, statistics, and needs of the Homeless Shelter for the past quarter. She invited the HRC to provide a meal during the Holidays. Brief HRC discussion ensued. August 18, 2003 - CITY COUNCIL MINUTES Attachment 4 BUSINESS ITEM 2. STANLEY MOTORS (COLE MOTORS) RELOCATION AND RETENTION. Economic Development Manager Stanwyck presented the staff report. Council questions followed. Public Comments Andrew Carter, 1283 Woodside, stated that he does not support the inclusionary housing fee waiver because financial incentives should come from the General Fund and not from the City's special funds. He supports the use of Community Development Block Grant (CDBG) funds. Mary Beth Schroeder , 2085 Wilding Lane, spoke in favor of retaining Cole Motors. Carol Florence, representing Cole Motors, spoke in support of the staff recommendation. ---end of public comments--- ACTION: Moved by Schwartz/Ewan to support the relocation and retention of Stanley Motors by: a) the City agreeing to pay the project's inclusionary housing fee using Community Development Block Grant Economic Development Funds; and b) approving the calculation of the Cole Motors Project's Building Permit fees at the rates applicable on July 7, 2003, the date the Project application was deemed complete by the Community Development Department; motion carried 5:0. C3- 1D G i p � v� p G ,� o o N fq Attachment56 C G c>d N � cr H a0 0 0 0 0 0 0 0 0 0 O 42 N 70 Q Q A Q U ER 4 Q) > O 7 •N C � a � 4 0 G v} oM = ? � opo o -• o no a 00O 0.. Cf) 7 Gcn y O N 7 7 00 O OO Q O N 7 r- E ccz 0 0 0 cD 'IT. 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