ACTION REQUESTED:
Title
Communication from the City Manager with a Request to Provide Direction Regarding the Creation of a POLICY Governing the Establishment of SALES TAX SPECIAL SERVICE AREAS for SHOPPING CENTERS.
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BACKGROUND: On June 24, 2014, the City Council approved an amendment to the Westlake Shopping Center Special Service Area (SSA) that would impose an additional 0.75% sales tax on purchases made within that shopping center. The proceeds from this additional tax would be conveyed to the shopping center owner who would use them in chief to repay a loan acquired in order to make major physical and aesthetic improvements to the shopping center. At that meeting, the City Council asked staff to return with policy recommendations to guide the future creation of similar SSAs in other parts of the City.
Staff has assembled a set of parameters that should be considered by the City Council. These recommendations are based on the position that sales tax SSAs should be created only to incentivize major physical upgrades to a shopping center rather than be a revenue source for property owners that merely wish to pay for "routine" maintenance. The improvements should be noticeable and enjoyable by both customers and the general public. Many, but not all, of the elements listed below are present in the recent Westlake SSA.
Suggested Parameters
1. Property owner can request a sales tax levy between 0.25% and 0.75%.
2. Additional tax runs for 20 years maximum.
3. Property must be a shopping center, as defined in the Zoning Code:
a. "A unified group of commercial establishments sharing a common building or buildings, off-street plaza, site access, signage, and/or parking area to which such commercial establishments are oriented on a site of a minimum of three (3) acres."
4. Property owner must present written proof that at least 90% of tenants approve. Further, owner must disclose presence of SSA to any prospective tenant through the life of the SSA.
5. Project must be well defined. Application must include a detailed plan that becomes part of the agreement. The plan must include a cost estimate.
6. Project limited to visible improvements to the "public areas" (enjoyed by the public, like a parking lot or landscaping, or seen by the public, like paint). Installation of external security cameras allowable.
7. Cannot be used for signage.
8. Cannot be used for common area maintenance.
9. Minimum investment of $1,000,000 to be spent within two years of adoption of SSA ordinances.
10. Project funding must be securely financed with a bank loan or cash investment by property owner.
11. Property must be free of code violations at time of approval. Proceeds cannot be used to correct code violations.
12. Applicant cannot have any open code violations at other property within the City nor be in arrears to the City for any fees, fines, etc.
13. Applicant must submit all plans to Site Plan Review Board prior to project commencement. All work must be done with a permit, if required.
14. Sales tax SSA must be backstopped by a property tax SSA.
15. The City has the right to charge a reasonable, on-going administrative fee to cover the cost of managing the program.
16. Property owner must keep records indicating work done and costs incurred that can be reviewable by the City on demand.
17. The City shall charge a $5,000 non-refundable fee to process the application.
Staff will take feedback and direction provided by the Council and craft a formal policy for adoption at a future meeting.
FINANCIAL IMPACT: Sales tax SSAs are revenue neutral to the City, but the parameters as outlined include small administrative charges that will generate modest revenue.
NEIGHBORHOOD CONCERNS: Not applicable. There was no opposition to the Westlake sales tax SSA.
IMPACT IF APPROVED: Not applicable (policy discussion only).
IMPACT IF DENIED: Not applicable (policy discussion only).
ALTERNATIVES: Council can modify, delete or add other parameters to the policy.
EEO CERTIFICATION NUMBER: Not applicable (policy discussion only).
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL'S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Attractive Neighborhoods with Character: Safe and Livable
2. Grow Peoria: Businesses, Jobs, and Population
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Grow employers and jobs.
DEPARTMENT: City Manager's Office