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. (Refer to Item No. 14-343)
Body
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 capital improvements that result in 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.
In the case of Westlake Shopping Center, the developer first started with a property tax SSA. In 2010, Westlake Limited Partnership (the developer) entered into an agreement with the City whereby an additional property tax was levied against the shopping center. The proceeds of this additional tax were transferred to the developer, who in turn used them to repay a loan that had be acquired in order to make a major investment in the property. The switch to a sales tax SSA (though still backed by a property tax levy) allowed the developer to refinance its loan on the first project and continue the improvements at the shopping center.
It would...
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