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4551 San Leon Sanford Grant IncentiveOrdinance No. 2020-4551 An ordinance of the City of Sanford, Florida granting an economic incentive to San Leon Sanford, LLC pursuant to the supplemental economic or tourism development program established in Ordinance Number 4526; providing for legislative findings and intent; providing for implementing administrative actions in strict conformity to the provisions of Ordinance Number 4526; providing for conflicts, providing for a savings provision and the effect of the ordinance; providing for severability; providing for non -codification as well as the correction of scrivener's errors; and providing for an effective date. Whereas, the City Commission of the City of Sanford, Florida enacted Ordinance Number 4526 to incentivize economic and tourism development within the City; and Whereas, this Ordinance is enacted pursuant to the home rule powers of the City of Sanford as set forth at Article VIII, Section 2, of the Constitution of the State of Florida; Chapter 163, Florida Statutes; Chapter 166, Florida Statutes; and other applicable controlling law; and Whereas, the City of Sanford has complied with all requirements and procedures of Florida law in processing and advertising this Ordinance. Now Therefore, Be it enacted by the People of the City of Sanford: Section 1. Legislative Findings And Intent. (a). The City Commission of the City of Sanford hereby adopts and incorporates into this Ordinance the recitals (whereas clauses) set forth herein and the provisions of Section 1 of Ordinance Number 4526 as the legislative and administrative findings and intent of the City Commission relating to this Ordinance. (b). Additionally, the City Commission agenda memorandum and related materials are adopted as the basis for the action taken in this Ordinance. (c). It is hereby found and determined that the actions taken herein relative to the incentive award to San Leon Sanford, LLC is authorized by Ordinance Number 4526 and 11Page that the requirements of Ordinance Number 4526 have been met. Section 2. Supplemental Economic Or Tourism Incentive Award; San Leon Sanford, LLC. The City Commission of the City of Sanford hereby enacts the following: (a). The City Commission hereby grants the following incentive under the provisions of Ordinance Number 4526 to San Leon Sanford, LLC: 100% of an amount equal to the sums paid in ad valorem taxes that have been duly paid to the City during the first 5 years in which the incentivized development is placed on the tax rolls of Seminole County calculated on new ad valorem tax revenues consistent with the provisions and intent of Ordinance Number 4526. (b). The City's Finance Director shall issue payments to San Leon Sanford, LLC consistent with the incentive award approved in Subsection (a) of this Section after the new ad valorem tax revenues have been received by the City. Section 3. Implementing Administrative Actions. (a). The City Manager, or designee, is hereby authorized and directed to implement the provisions of this Ordinance and to take any and all necessary administrative actions to bring into effect the provisions of this Ordinance. (b). All actions of an implementing nature shall occur in strict conformity to the provisions of Ordinance Number 4526. Section 4. Conflicts. All ordinances or parts thereof in conflict with this Ordinance are hereby repealed. Section 5. Savings; Effect Of Ordinance. (a). The prior actions of the City of Sanford in terms of the matters relating to any and all actions and activities of the City pertaining to the economic or tourism development of the City, or of an associated nature, are hereby ratified and affirmed. r (b). Nothing in this Ordinance shall be construed to affect any suit or proceeding impending in any court, or any rights acquired, or liability incurred, or any cause of causes of action acquired or existing, under any act or ordinance hereby repealed; nor shall any just or legal right or remedy of any character be lost, impaired or affected by this Ordinance (c). Nothing in this Ordinance shall be construed, in any way, to grant any cause of causes of action to San Leon Sanford, LLC in any respect or under any legal theory. Section 6. Codification; Scrivener's Errors. (a). This Ordinance shall not be codified. (b). Typographical errors and other matters of a similar nature that do not affect the intent of this Ordinance, as determined by the City Clerk and City Attorney, may be corrected with the endorsement of the City Manager, or designee, without the need for a public hearing. Section 7. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance, or application hereof, is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion or application shall be deemed a separate, distinct, and independent provision and such holding shall not affect the validity of the remaining portions thereof. Section 8. Effective Date. This Ordinance shall take effect immediately upon enactment with the incentives being paid only as set forth herein and in no other way and in no other time frame. 31 Page Passed and adopted this 8th day of June, 2020. Attest.* City Commissionf the City of Sanford, Florida. / / � OAkL44pV IJAIMORM- IWAYIIU�1111 Traci Houchin, IAMC, FCRM, City Clerk k*46peft, -Mayo Approved as to form and gyp. F Oli-t) Legality: atom- William L. Colbert, Esquire City Attorney -CITY OF FORD FLORIDA Item No. CITY COMMISSION MEMORANDUM 20-085 JUNE 8, 2020 AGENDA TO: Honorable Mayor and Members of the City Commission PREPARED BY: Sonia Fonseca, MBA, FRA -RA, SCRA Executive Director, Economic Development Project Manager SUBMITTED BY: Norton N. Bonaparte, Jr., City Ma ge SUBJECT: Application of San Leon Sanford, ; Ordinance No. 4551 Granting Incentive STRATEGIC PRIORITIES: ❑ Unify Downtown & the Waterfront ® Promote the City's Distinct Culture Update Regulatory Framework ® Redevelop and Revitalize Disadvantaged Communities SYNOPSIS: Adoption of Ordinance No. 4551, to award the granting incentive to San Leon Sanford, LLC is requested. FISCAL/STAFFING STATEMENT: City funds are not appropriated in this type of action. Funds received as a result of eligible development would be rebated to the grantee. However, the frill benefit of the development would inure to the City at the time any approved rebate expires. The City Commission determines the level of incentive and length of time the tax rebate would be granted to each applicant. The applicant in this case has applied for an incentive in an amount of 100% of the tax revenues that are being generated as a result of the development for the first five years. A return on investment (ROI) analysis has been performed and is attached for review and consideration by the City Commission. BACKGROUND: The "Supplemental Economic or Tourism Development Incentive Program Ordinance" provides that the City Commission, at its discretion and on a case-by-case basis, may enter into an incentive agreement with a person, firm, or corporation providing for incentives in order to encourage and support the development of real property within the City. Each incentive agreement shall be approved by the City Commission by adoption of an ordinance. The City Commission may provide incentives in any amounts and for any period of time (up to 10 years). Incentives may be granted in the form of payments of amounts up to, but in no event in the amount in excess of equal to, the sums paid in fees and taxes that have been duly paid to the City during a specified period of time. Upfront abatements of fees or taxes are prohibited and unlawful. Where incentives continue for a period of more than a year, they may be graduated to increase or decrease year-to-year as the City Commission sees fit, but subject to monitoring by the City to ensure compliance with the terms of any incentive agreement. Funds received through incentive grants may only be used for purposes that are determined to provide for the economic or tourism development of the City. Eligible improvements are improvements that have been included on the tax rolls prior to the effective date of an incentive award ordinance and the costs of land upon which a new business or an expansion of an existing business is to be located. Eligible improvements are up to 100% of the assessed value of all improvements made by or for the use of a development and of all tangible personal property of such development, or up to 100% of the assessed value of all added improvements made to facilitate the qualifying expansion of an existing business and of the net increase in all tangible personal property acquired to facilitate such expansion of an existing business. In order for a development to be eligible to receive incentives, the City Commission must determine that it meets, or upon completion will meet, each of the following criteria: (1). The development must be consistent with the City's Comprehensive Plan as well as the goals set forth in the Ordinance. (2). Absent the provision of incentives, the development would be unlikely to occur or unlikely to occur at the level or scale contemplated by the developer. (3). The development must be located within the incentive area includes, at this time, all properties which the City determines to serve the economic or tourism development purposes of the City, but may be specifically delimited in the future by the City Commission. (4). The development must have: (A). Real property acquisition costs of a significant type or nature, or (B). Significant costs of physical improvements to real property, or (C). Significant costs of capital improvements to City infrastructure; or (D). On a case-by-case basis, any other eligibility criteria that must be met upon completion of a development in order to ensure that the goals are met and that the development provides benefits to the City (and its citizens) in amounts that warrant the implementation of incentives. The referenced "goals" are as follows: (1). To promote the construction of new buildings or the rehabilitation of existing buildings within the Incentive Area; and (2). To support the establishment of the categories of new businesses that the City Commission determines will: (A). Significantly increase the overall commercial activity within the Incentive Area, (B). Attract the City's residents and tourists into the Incentive Area, and (C). Increase the property values within the City as a whole. Other Considerations/Criteria which the City Commission shall be guided by, as determined solely and exclusively by the City Commission, are the following: (1). The minimum expected amount of capital investment of $3,000,000. (2). The current and anticipated volume (in dollars) of business or production. (3). The total length (number of years) of the incentive period being requested. (4). Preference may be given to redevelopment or infill projects. (5). The likely cost and demand for public services. (6). The likelihood that the project relocation or expansion would have occur without the award of an incentive. (7). If any other publicly funded economic development incentives have been granted for the project. No precedent will be implied or inferred by the granting of an incentive. Each application is considered by the City Commission in its legislative capacity on a case-by-case basis, after considering the criteria as set forth in the Supplemental Economic or Tourism Development Incentive Program Ordinance and acting in its sole and absolute discretion. The City Commission recently enacted the "Supplemental Economic or Tourism Development Incentive Program Ordinance". San Leon, LLC is a Florida limited liability company whose headquarters is located at 400 Lakeview St., Orlando, Florida 32804, has applied for an incentive award under the provisions of the Ordinance. The attached ROI analysis results in the conclusion by City staff that the application is one that should be favorably considered by the City Commission. The City Conunission approved the first reading of Ordinance No. 4551 on May 18, 2020. The City Clerk published notice of the 2nd Public Hearing in the Sanford Herald on May 31, 2020. LEGAL REVIEW: The City Attorney's office has assisted in this matter and has no legal objection to the proposed action. RECOMMENDATION: City staff recommends that the City Commission adopt Ordinance No. 4551, granting a Supplemental Economic or Tourism Development Incentive tax rebate to San Leon, LLC in the amount of 100% for the first five years calculated on new tax revenues. SUGGESTED MOTION: "I move to adopt Ordinance No. 4551." Attachments: (1). Supplemental Economic or Tourism Development Incentive Program Ordinance. (2). Fiscal Analysis. (3). Ordinance No. 4551. (4). Application packet. San Leon Sanford LLC 400 Lakeview Street Orlando, Florida 32804-6827 (321) 318-7857 November 12, 2019 City of Sanford 300 N. Park Avenue Sanford, Florida 32771-1244 Attn: Sonia Fonseca Re: Application for Property Tax Rebate Program for 201 Sanford Avenue Dear Ms. Fonseca, On behalf of the owner/developer, San Leon Sanford LLC, I write to apply for the City of Sanford's ad valorem property tax rebate program in connection with the San Leon project, a redevelopment of the site at 201 Sanford Avenue. In addition to the explanations below, enclosed please find: Renderings of the proposed building A confidential and proprietary pro forma for the project An excerpt from the proforma detailing the calculation of the estimated rebate About the Project The San Leon is an urban infill, mixed-use redevelopment project in downtown Sanford. When complete, the San Leon will have ten market -rate, multifamily residential units with ground floor retail. The project is expected to be the first new construction along Sanford Avenue since completion of the Sanford Avenue streetscape. This urban redevelopment site is located in Sanford's Waterfront/Downtown Business District (WDBD) on the site of the now -demolished San Leon Hotel. Located on the southeast corner of Sanford Avenue and E. 2nd Street, the site is directly across Sanford Avenue from the designated Downtown Historic District and within the Entertainment District. The San Leon project is located less than 500 feet from the proposed Heritage Park, the City's "catalyst project" intended to further spur redevelopment in downtown Sanford. While both the Heritage Park and San Leon projects bring mixed-use redevelopment to the City's central business district and promote the City's policy of encouraging urban infill development, they are complementary in that they represent two very different models of urban infill. Most vacant lots in downtown Sanford are small. The San Leon project will show that downtown San Leon Sanford LLC application for City of Sanford ad valorem pax rebate program redevelopment need not be limited to large, multi -block, mega -projects. Rather, smaller, fine-grained projects on much smaller parcels of land are not only possible, but desirable. Another important part of the redevelopment of downtown Sanford is the Historic Downtown Commercial District. The San Leon is located directly across Sanford Avenue from the eastern edge of that historic district, including several contributing historic buildings. While Sanford's LDRs, including Schedule S (Historic Preservation), do not require it, the San Leon is in an architectural style reminiscent of early 20th -century commercial brick storefront buildings, similar to many of the contributing buildings in the district itself. The San Leon will bring this architectural style to a part of the east side of Sanford Avenue where most lots are currently vacant, unproductive and unattractive. Ad Valorem Tax Rebate Program Eligibility Criteria The San Leon project meets the eligibility requirements set forth in the Ordinance: 1. The development is consistent with the City of Sanford Comprehensive Plan as well as the goals set forth in the ordinance establishing the tax rebate program. Consistency with the Comprehensive Plan. The San Leon project advances the goals, policies and objectives of the City's Comprehensive Plan. The City of Sanford Comprehensive Plan (2018 -2030) provides in part: "OBJECTIVE FLU 1.15: Prevent Proliferation of Urban Sprawl and Develop Efficient Systems for Coordinating the Timing and Staging of Public and Private Development. The City shall continue to enforce adopted LDRs which require that proposed land uses be adequately served by requisite public facilities, including water and wastewater services, adequate stormwater management, solid waste disposal and hazardous waste management ... For example, in order to abate urban sprawl and maximize use of existing infrastructure all new development shall be required to hook up to the existing central water and wastewater system. The City's LDRs shall continue to include performance standards ... to prevent the proliferation of urban sprawl and achieve cost effective land development patterns. Urban sprawl shall be further abated through LDRs, including performance standards which shall: Direct future development only to those areas where provision of public facilities necessary to meet levels of service standards are available concurrent with the impacts of the development; Maximize use of existing central potable water and wastewater facilities by requiring that all new development hook up to the City's existing central systems; Page 2 of 5 San Leon Sanford LLC application for City of Sanford ad valorem tax rebate program Avoid expensive development at very low densities surrounding the City's urban core area; • Promote planned mixed use development within ... the Waterfront/Downtown Business District ... Prevent extended strip commercial development within the areas designated planned mixed use development by mandating access and curb cut controls together with required dedication of cross easements to restrict and/or to facilitate well planned access, internal circulation, shared parking, and egress; and • Provide density and intensity threshold which promote infill." The San Leon redevelopment, as a mixed-use development within the Waterfront/Downtown Business District (WDBD), is consistent with this objective as it does not promote urban sprawl, is located in an area served by existing infrastructure, does not propose strip commercial development, and promotes infill by providing for density and intensity in an appropriate location. Similarly, another section of the Comprehensive Plan further encourages urban infill development: "Policy FCU 2.2.7: Promote Urban Infill Redevelopment. The City shall encourage the development and redevelopment of parcels in otherwise built-up areas where public facilities, such as sewer syst ems, roadways, schools, and recreation areas, are already in place through the use of Urban Infill Redevelopment (UIR) projects." As urban infill redevelopment, the San Leon project promotes this policy by virtue of its location in downtown Sanford where all necessary public facilities are already in place. Consistency with the goals set forth in the ordinance. The ordinance sets out the following goals for the City in offering the Incentives: A. Promoting the construction of new building or the rehabilitation of existing buildings within the Incentive Area; and B. Supporting the establishment of... new businesses that will: i. Significantly increase the overall commercial activity within the Incentive Area, ii. Attract the City's residents and tourists into the Incentive Area, and iii. Increase property values within the City as a whole. Page 3 of 5 San Leon Sanford LLC application for City of Sanford ad valorem tdx rebate program The San Leon project is consistent with these goals as it involves the construction of new buildings and, with its residential and retail uses, will increase commercial activity in the Incentive Area, thereby attracting residents and tourists and increasing property values. 2. The development is located within the Incentive Area. The development is located at 201 Sanford Avenue, on the southeast corner of Sanford Avenue and E. 2"d Street, which I understand is located within the Incentive Area. 3. The development has significant costs for (i) real property acquisition, or (ii) physical improvements, or (iii) capital improvements to City infrastructure. The San Leon project had a real property acquisition cost of $260,000. Total project costs are estimated at more than $3 million, the bulk of which is for the construction of a building and other improvements on the site. In addition to the costs of acquisition and physical improvements, the project has some developer -funded capital improvements to City infrastructure, at a minimum a new waterline. The developer and Public Works Department are in discussions as to developer -funded replacement of a sewer line and paving a section of the alley. To satisfy this provision in the ordinance, only one of these three elements needs to be satisfied. 4. Absent the provision of Incentives, the Development would be unlikely to occur or unlikely to occur at the level or scale contemplated by the developer. Over the past two years, the project has been through two significant redesigns to make the project financially feasible. These resulted in the reduction in the number of multifamily units (now 10) and the amount of commercial retail space (now 2,283 sf). To help "bridge the gap" financially, the Downtown Sanford CRA has awarded the San Leon project $50,000 to offset financing interest expense. Additionally, the City has awarded the San Leon project 0.24 water management district stormwater area credits, eliminating the need to build an expensive underground on-site stormwater storage system. Even with the benefit of the CRA award and the stormwater credits, anticipated project revenue still does not adequately support the estimated project costs, even though the developer will charge rents higher than those currently found in the downtown Sanford market. Specifically, the developer intends to charge on average $1,500 per month ($2.08/mo./sf) for each of the ten multifamily units and $29 per square foot ($2.42/mo./sf) for the commercial space. While the developer believes that it will be able to charge and collect this level of rent, these rents without additional support do not generate a return sufficient to justify the risks associated with the project. Page 4 of 5 San Leon Sanford LLC application for City of Sanford ad valorem tax rebate program The developer believes that the City's property tax rebate program, however, would close the finance gap, permitting the project to move forward in its current form. Absent the tax rebate program, the developer may need to further reduce the scope of the project or abandon it altogether. At the rent levels described above (and applying the CRA award), the San Leon project would generate a best case return of 7.8%, well short of the 10% minimum return expected for new construction and a project of this nature. With a ten-year, 100% rebate of the City of Sanford ad valorem taxes not attributable to the land, the project return improves to 9.6% -- a return sufficiently close to the 10% threshold that the developer would willing to move forward with the project as currently designed if the tax abatement incentive were granted. Request For the foregoing reasons, San Leon Sanford LLC requests that the City of Sanford adopt an ordinance pursuant to its ad valorem property tax rebate program for 100% of the assessed value of all improvements made by or for the use of the San Leon development and of all tangible personal property of such development for a period of ten (10) years. Respectfully submitted, SAN LEON SANFORD LLC E A r r tff" By: Pt`' niel R. Matthe s Its Manager Page 5 of 5 Ordinance No. 2019-4526 An ordinance of the City of Sanford, Florida establishing the City of Sanford supplemental economic or tourism development program; providing for legislative findings and intent; providing for implementing administrative actions; providing for conflicts, providing for a savings provision and the effect of the ordinance; providing for severability; providing for codification as well as the correction of scrivener's errors; and providing for an effective date. Whereas, the City Commission of the City of Sanford, Florida has the desire to ensure that the City of Sanford and its environs are desirable for economic or tourism development of a positive nature for the benefit of the citizens of the City of Sanford; and Whereas, Section 166.021(8), Florida Statutes, provides as follows: "(8) (a) The Legislature finds and declares that this state faces increasing competition from other states and other countries for the location and retention of private enterprises within its borders. Furthermore, the Legislature finds that there is a need to enhance and expand economic activity in the municipalities of this state by attracting and retaining manufacturing development, business enterprise management, and other activities conducive to economic promotion, in order to provide a stronger, more balanced, and stable economy in the state, to enhance and preserve purchasing power and employment opportunities for the residents of this state, and to improve the welfare and competitive position of the state. The Legislature declares that it is necessary and in the public interest to facilitate the growth and creation of business enterprises in the municipalities of the state. (b) The governing body of a municipality may expend public funds to attract and retain business enterprises, and the use of public funds toward the achievement of such economic development goals constitutes a public purpose. The provisions of this chapter which confer powers and duties on the governing body of a municipality, including any powers not specifically prohibited by law which can be exercised by the governing body of a municipality, shall be liberally construed in order to effectively carry out the purposes of this subsection. (c) For the purposes of this subsection, it constitutes a public purpose to expend public funds for economic development activities, including, but not limited to, developing or improving local infrastructure, issuing bonds to finance or refinance the cost of capital projects for industrial or manufacturing plants, leasing or conveying real property, and making grants to private enterprises for the expansion of businesses existing in the community or the attraction of new businesses to the community. ; and (d) A contract between the governing body of a municipality or other entity engaged in economic development activities on behalf of the municipality and an economic development agency must require the agency or entity receiving municipal funds to submit a report to the governing body of the municipality detailing how the municipal funds are spent and detailing the results of the economic development agency's or entity's efforts on behalf of the municipality. By January 15, 2011, and annually thereafter, the municipality shall file a copy of the report with the Office of Economic and Demographic Research and post a copy of the report on the municipality's website. (e)1. By January 15, 2011, and annually thereafter, each municipality having annual revenues or expenditures greater than $250,000 shall report to the Office of Economic and Demographic Research the economic development incentives in excess of $25,000 given to any business during the municipality's previous fiscal year. The Office of Economic and Demographic Research shall compile the information from the municipalities into a report and provide the report to the President of the Senate, the Speaker of the House of Representatives, and the Department of Economic Opportunity. Economic development incentives include: a. Direct financial incentives of monetary assistance provided to a business from the municipality or through an organization authorized by the municipality. Such incentives include, but are not limited to, grants, loans, equity investments, loan insurance and guarantees, and training subsidies. b. Indirect incentives in the form of grants and loans provided to businesses and community organizations that provide support to businesses or promote business investment or development. c. Fee-based or tax -based incentives, including, but not limited to, credits, refunds, exemptions, and property tax abatement or assessment reductions. d. Below-market rate leases or deeds for real property. 2. A municipality shall report its economic development incentives in the format specified by the Office of Economic and Demographic Research. 3. The Office of Economic and Demographic Research shall compile the economic development incentives provided by each municipality in a manner that shows the total of each class of economic development incentives provided by each municipality and all municipalities. (f) This subsection does not limit the home rule powers granted by the State Constitution to municipalities." Whereas, Section 187.201(16), Florida Statutes, (part of the State Comprehensive Plan) provides as follows: -(16) URBAN AND DOWNTOWN REVITALIZATION.— (a) Goal.—In recognition of the importance of Florida's vital urban centers and of the need to develop and redevelop downtowns to the state's ability to use existing infrastructure and to accommodate growth ©® �� in an orderly, efficient, and environmentally acceptable manner, Florida shall encourage the centralization of commercial, governmental, retail, residential, and cultural activities within downtown areas. (b) Policies. - 1. Provide incentives to encourage private sector investment in the preservation and enhancement of downtown areas. 2. Assist local governments in the planning, financing, and implementation of development efforts aimed at revitalizing distressed downtown areas. 3. Promote state programs and investments which encourage redevelopment of downtown areas. 4. Promote and encourage communities to engage in a redesign step to include public participation of members of the community in envisioning redevelopment goals and design of the community core before redevelopment. 5. Ensure that local governments have adequate flexibility to determine and address their urban priorities within the state urban policy. 6. Enhance the linkages between land use, water use, and transportation planning in state, regional, and local plans for current and future designated urban areas. 7. Develop concurrency requirements that do not compromise public health and safety for urban areas that promote redevelopment efforts. 8. Promote processes for the state, general purpose local governments, school boards, and local community colleges to coordinate and cooperate regarding educational facilities in urban areas, including planning functions, the development of joint facilities, and the reuse of existing buildings. 9. Encourage the development of mass transit systems for urban centers, including multimodal transportation feeder systems, as a priority of local, metropolitan, regional, and state transportation planning. 10. Locate appropriate public facilities within urban centers to demonstrate public commitment to the centers and to encourage private sector development. 11. Integrate state programs that have been developed to promote economic development and neighborhood revitalization through incentives to promote the development of designated urban infill areas. 12. Promote infill development and redevelopment as an important mechanism to revitalize and sustain urban centers." Whereas, Section 187.201(21), Florida Statutes, (part of the State Comprehensive Plan) provides as follows: "(21) THE ECONOMY. -- (a) Goal. --Florida shall promote an economic climate which provides economic stability, maximizes job opportunities, and increases per capita income for its residents. (b) Policies. -- 1. Attract new job -producing industries, corporate headquarters, distribution and service centers, regional offices, and research and development facilities to provide quality employment for the residents of Florida. 2. Promote entrepreneurship and small and minority-owned business startup by providing technical and information resources, facilitating capital formation, and removing regulatory restraints which are unnecessary for the protection of consumers and society. 3. Maintain, as one of the state's primary economic assets, the environment, including clean air and water, beaches, forests, historic landmarks, and agricultural and natural resources. 4. Strengthen Florida's position in the world economy through attracting foreign investment and promoting international banking and trade. 5. Build on the state's attractiveness to make it a leader in the visual and performing arts and in all phases of film, television, and recording production. 6. Promote economic development for Florida residents through partnerships among education, business, industry, agriculture, and the arts. 7. Provide increased opportunities for training Florida's workforce to provide skilled employees for new and expanding business. 8. Promote economic self-sufficiency through training and educational programs which result in productive employment. 9. Promote cooperative employment arrangements between private employers and public sector employment efforts to provide productive, permanent employment opportunities for public assistance recipients through provisions of education opportunities, tax incentives, and employment training. 10. Provide for nondiscriminatory employment opportunities. 11. Provide quality child day care for public assistance families and others who need it in order to work. 12_ Encourage the development of a business climate that provides opportunities for the growth and expansion of existing state industries, particularly those industries which are compatible with Florida's environment. 13. Promote coordination among Florida's ports to increase their utilization. 14. Encourage the full utilization by businesses of the economic development enhancement programs implemented by the Legislature for the purpose of extensively involving private businesses in the development and expansion of permanent job opportunities, especially for the economically disadvantaged, through the utilization of enterprise zones, community development corporations, and other programs designed to enhance economic and employment opportunities." ; and Whereas, Section 187.201(24), Florida Statutes, (part of the State Comprehensive Plan) provides as follows: ; and (23) TOURISM.— (a) Goal.—Florida will attract at least 55 million tourists annually by 1995 and shall support efforts by all areas of the state wishing to develop or expand tourist -related economies. (b) Policies. - 1. Promote statewide tourism and support promotional efforts in those parts of the state that desire to attract visitors. 2. Acquire and manage public lands to offer visitors and residents increased outdoor experiences. 3. Promote awareness of historic places and cultural and historical activities. Whereas, the City Commission of the City of Sanford, Florida desires that the economy of the City of Sanford be one that is vibrant, creative, flexible, dynamic, and modern as well as an economy that attracts and retains high quality businesses and economic generators to the City of Sanford; and Whereas, the City Commission of the City of Sanford, Florida desires to protect the public health, safety and welfare of the citizens of the City and maintain a high quality of life for the citizens of the City; and Whereas, the City Commission of the City of Sanford hereby finds and determines that the provisions of this Ordinance provide for public benefits and serve public purposes; and Whereas, this Ordinance, although neither creating or amending land development regulations, is consistent with the goals, objectives and policies of the Comprehensive Plan of the City of Sanford. Whereas, the City Commission of the City of Sanford, as the governing body of the City, through the adoption of its Comprehensive Plan and other adopted documents, has established as a matter of policy that fostering the revitalization and redevelopment of the City (collectively, the "Incentive Area," as further defined in this Ordinance, brings about positive economic, social and cultural impacts within the City and greatly enhances the quality of life of the City's citizens; and Whereas, it is essential to the City's efforts to foster revitalization and redevelopment within the Incentive Area that the City offer certain Incentives as set forth in this Ordinance that will encourage private investment in the Incentive Area; and Whereas, the goals (the "Goals") of the City in offering the Incentives are as follows: ; and (a). To promote the construction of new buildings or the rehabilitation of existing buildings within the incentive Area; and (b). To support the establishment of the categories of new businesses that the City Commission determines will: (i). Significantly increase the overall commercial activity within the Incentive Area, (ii). Attract the City's residents and tourists into the Incentive Area, and (iii). Increase the property values within the City as a whole. Whereas, while the Incentives may benefit the Incentive Recipients (as defined in this Ordinance), the primary beneficiary of the Incentives will be the City and its citizens who shall realize the following benefits (the `Benefits"): (a). Increased property values within the Incentive Area and the City as a whole; EM (b). Increased revenue from property taxes, business license fees and permit fees; (c). Increased tourism and commercial activity within the Incentive Area and the City as a whole; and (d). The improvement of the character of the City by preserving buildings within the Incentive Area or promoting the construction of new buildings that are compatible with character of the City. Whereas, the Incentives, as provided for in an Incentive Agreement (as defined in this Ordinance), shall be structured in such a way that the value of the Benefits to the City will exceed their value to the Incentive Recipients; and Whereas, this Ordinance is enacted pursuant to the home rule powers of the City of Sanford as set forth at Article VIII, Section 2, of the Constitution of the State of Florida; Chapter 163, Florida Statutes; Chapter 166, Florida Statutes; and other applicable controlling law; and Whereas, the City of Sanford has complied with all requirements and procedures of Florida law in processing and advertising this Ordinance. Now Therefore, Be it enacted by the People of the City of Sanford: Section 1. Legislative Findings And Intent. The City Commission of the City of Sanford hereby adopts and incorporates into this Ordinance the recitals (whereas clauses) set forth herein as the legislative and administrative findings and intent of the City Commission which, together with the agenda materials, memorandum and staff reports, to the extent that they exist, shall be maintained consistent with the maintenance schedule for ordinances, as public records of the City. 71 . - Section 2. Supplemental Economic Or Tourism Development Program. The City Commission of the City of Sanford hereby enacts the following provisions into the City Code: Title. This Ordinance shall be titled and may be commonly referred to as the "City of Sanford Supplemental Economic or Tourism Development Incentive Program Ordinance." Definitions. (a). As used in this Ordinance, unless the context shall otherwise require, the following terms shall have the following respective meanings: (1). Benefits means the value to the City of providing the Incentives, which generally includes: (A). Increased property values within the Incentive Area and the City as a whole; (B). Increased revenue from property taxes, business license fees and permit fees; (C). Increased tourism and commercial activity within the Incentive Area and the City as a whole; and (D). The improvement of the character of the City by preserving buildings within the Incentive Area and promoting the construction of new buildings. (2). Incentive Area means the area, which may be modified from time -to - time, in which the City Commission has determined that the revitalization and redevelopment thereof is essential to preserving and improving the economy, society, and culture of the City and enhancing the quality of life of the citizens thereof. The Incentive Area shall include all properties which the City determines to serve the economic or tourism development purposes of the City. (3). Development means the activity of improving a real property to the extent of adding value to the tax base through real property improvements and the creation of employment opportunities. The definition of the term "development" set forth in Section 163.3164(14), Florida Statutes, which adopts the definition set forth in Section 380.04, Florida Statutes,t shall be 1 The referenced definition of development reads as follows: (1) The term "development" means the carrying out of any building activity or mining operation, the making of any material change in the use or appearance of any structure or land, or the dividing of land into three or more parcels. (2) The following activities or uses shall be taken for the purposes of this chapter to involve "development," as defined in this section: (a) A reconstruction, alteration of the size, or material change in the external appearance of a structure on land. (b) A change in the intensity of use of land, such as an increase in the number of dwelling units in a structure or on land or a material increase in the number of businesses, manufacturing establishments, offices, or dwelling units in a structure or on land. (c) Alteration of a shore or bank of a seacoast, river, stream, lake, pond, or canal, including any "coastal construction" as defined in s. 161.021. (d) Commencement of drilling, except to obtain soil samples, mining, or excavation on a parcel of land. (e) Demolition of a structure. (f) Clearing of land as an adjunct of construction. (g) Deposit of refuse, solid or liquid waste, or fill on a parcel of land. (3) The following operations or uses shall not be taken for the purpose of this chapter to involve "development" as defined in this section: (a) Work by a highway or road agency or railroad company for the maintenance or improvement of a road or railroad track, if the work is carried out on land within the boundaries of the right-of-way. (b) Work by any utility and other persons engaged in the distribution or transmission of gas, electricity, or water, for the purpose of inspecting, repairing, or renewing on established rights-of-way or corridors, or constructing on established or to -be -established rights-of-way or corridors, any sewers, mains, pipes, cables, utility tunnels, power lines, towers, poles, tracks, or the like. This provision conveys no property interest and does not eliminate any applicable notice requirements to affected land owners. (c) Work for the maintenance, renewal, improvement, or alteration of any structure, if the work affects only the interior or the color of the structure or the decoration of the exterior of the structure. (d) The use of any structure or land devoted to dwelling uses for any purpose customarily incidental to enjoyment of the dwelling. (e) The use of any land for the purpose of growing plants, crops, trees, and other agricultural or forestry products; raising livestock; or for other agricultural purposes. U® applicable to the implementation and administration of this Ordinance. (4). Goals means the objectives of the City in offering the Incentives, which generally includes: (A). Promoting the construction of new building or the rehabilitation of existing buildings within the Incentive Area; and (B). Supporting the establishment of the categories of new businesses that will: (i). Significantly increase the overall commercial activity within the Incentive Area, (ii). Attract the City's residents and tourists into the Incentive Area, and (iii). Increase property values within the City as a whole. (5). Incentive means a grant of any inducement having monetary value by the City that is offered to a person, firm, or corporation to pursue a Development that encourages private investment and/or creation/retention of jobs. The Incentive may also include grants from other entities that the City may be able to obtain. (f) A. change in use of land or structure from a use within a class specified in an ordinance or rule to another use in the same class. (g) A change in the ownership or form of ownership of any parcel or structure. (h) The creation or termination of rights of access, riparian rights, easements, distribution and transmission corridors, covenants concerning development of land, or other rights in land. (4) "Development," as designated in an ordinance, rule, or development permit includes all other development customarily associated with it unless otherwise specified. When appropriate to the context, "development" refers to the act of developing or to the result of development. Reference to any specific operation is not intended to mean that the operation or activity, when part of other operations or activities, is not development. Reference to particular operations is not intended to limit the generality of subsection (1). 10� (6). Incentive Recipient means the private parties receiving the Incentives from the City. (7). Job means each new: (A). Full-time position or (B). Full-time equivalent position that is created as a direct result of the ongoing operation of a Development. For the purposes of calculating the number of Jobs created by a Development, only those employed at businesses directly associated with the Development at positions permanently located within the Incentive Area shall . be considered. (b). In addition to the definitions set forth in Subsection (a) of this Section, the definitions provided in the City Code and the Florida Statutes shall be applicable if the context so requires. General Principles Relating To Award Of Grant Incentives. (a). The City Commission, at its discretion and on a case-by-case basis, subject to the provisions of this Ordinance, may enter into an Incentive Agreement with a person, firm, or corporation providing for Incentives in order to encourage and support the Development of real property within the Incentive Area. (b). The Incentives shall only be provided to an Incentive Recipient after an agreement has been entered into between the City and such person, firm, or corporation, as approved by the City Attorney, which agreement shall set forth: the particulars of the Development; the Incentives to be provided; and sufficient assurances that the Benefits will accrue to the City and the Goals will be met by the Development (an "Incentive Agreement"). Pending the approval by the City Commission of any Incentive Agreement, subject to the provisions of this Ordinance, the City Manager shall discuss the provisions of this Ordinance, aid in the completion of any Proposal and, subject to the final approval by the City Commission, negotiate with the potential Incentive Recipient on behalf of the City. Each Incentive Agreement shall be approved by the City Commission by adoption of a resolution. The City Commission may provide Incentives in any amounts and for any periods of time. Authorized incentives. (a). The City Commission may provide to an Incentive Recipient any combination of Incentives provided for herein; provided, however, that the total amount of Incentives given to a Development must be in keeping with the Goals and the value of the Benefits accruing to the City and its citizens must be greater than the financial value of the Incentives to an Incentive Recipient. (b). All direct Incentives of the City shall be granted in the form of payments of amounts up to, but in no event in the amount in excess of equal to, the sums paid in fees and taxes that have been duly paid to the City during a specified period of time. Upfront abatements of fees or taxes are prohibited and unlawful. Where Incentives continue for a period of more than one year, such Incentives may be graduated to increase or decrease year-to-year as the City Commission sees fit, but subject to monitoring by the City to ensure compliance with the terms of any Incentive Agreement. (c). Funds received through such incentive grants may only be used for purposes that are determined to provide for the economic or tourism development of the City. Eligibility Criteria. (a). In order for a Development to be eligible to receive incentives, the City Commission must determine that the Development meets, or upon completion will meet, each of the following criteria: 12�"-_ (9 ). The Development is consistent with the City of Sanford Comprehensive Plan as well as the Goals set forth in this Ordinance. (2)_ Absent the provision of Incentives, the Development would be unlikely to occur or unlikely to occur at the level or scale contemplated by the developer. (3). The Development must be located within the Incentive Area. (4). The Development must have: (A). Real property acquisition costs of a significant type or nature, or (B). Significant costs of physical improvements to real property, or (C). Significant costs of capital improvements to City infrastructure; or (D). On a case-by-case basis, any other eligibility criteria that must be met upon completion of a Development in order to ensure that the Goals are met and that the Development provides Benefits to the City (and its citizens) in amounts that warrant the implementation of Incentives. (b). No precedent shalt be implied or inferred by the granting of a rebate. Each application shall be considered by the City Commission in its legislative capacity on a case by case basis, after considering the criteria as set forth in this Ordinance and acting in its sole and absolute discretion. Establishment of economic development ad valorem tax rebate. (a). Incentive. There is herein established an economic development ad valorem tax 131 rebate ("rebate") for ad valorem taxes levied by the City. The rebate is a local option tax incentive for an applicant which may be granted or refused at the sole and absolute discretion of the City Commission. (b). Ineligible improvements. The rebate shall not accrue to improvements made by or for the use of an applicant when such improvements have been included on the tax rolls prior to the effective date of an ordinance specifically granting a business a rebate. (c). Eligible improvements. At the sole and absolute discretion of the City Commission, and except as otherwise provided for in this Ordinance, the rebate may be granted for up to 100% of the assessed value of all improvements made by or for the use of a Development and of all tangible personal property of such Development, or up to 100% of the assessed value of all added improvements made to facilitate the qualifying expansion of an existing business and of the net increase in all tangible personal property acquired to facilitate such expansion of an existing business, provided that the improvements are made or the tangible personal property is added or increased on or after the day the Ordinance specifically granting an rebate is adopted. Rebates for less than 100% of such assessed values may be granted at the sole and absolute discretion of the City Commission. Property acquired to replace existing property shall not be considered to facilitate a business expansion. (d). Land. No rebate shall be granted for the land upon which a new business or an expansion of an existing business is to be located. (e). Rebate. Except as otherwise provided for in this Ordinance, the rebate may be for a period of up to 10 years from the date the City Commission adopts the ordinance specifically granting a rebate. (f). Taxes applicable. The rebate shall apply only to taxes levied City-wide by the City. 14 1 :, The rebate shall not apply to taxes levied by a the County, a County municipal services taxing or benefit unit (MSTU/MSBU), the Seminole County School District, a water management district, or any other special district or to taxes levied for the payment of bonds or taxes authorized by a vote of the electors pursuant to Section 9(b) or 12, Article VIi of the Constitution of the State of Florida. (g). Maximum amount of annual rebates. Notwithstanding any other provision of this Ordinance, the rebate granted by the City Commission for each fiscal year shall not result in an estimated aggregate annual amount of forgone ad valorem tax revenues in excess of $2,000,000.00 or such other amount approved by a supermajority vote of the City Commission, which amount shall be calculated based on the property appraiser's estimates on the revenue lost to the City during the then particular fiscal year by virtue of rebates previously granted plus rebates under consideration in such particular fiscal year. (h). Mandatory Criteria. The City Commission, in making decisions and determinations under the provisions of this Ordinance, shall require that the successful applicant will receive a level of tax rebate that may be up to the maximum an overall total rebate of 100% calculated over the entire period of tax rebate. (i). Other Considerations/Criteria. The City Commission, in making decisions and determinations under the provisions of this Ordinance, shall be guided by the following considerations and criteria in a manner which provides for flexibility in accordance with the best interests of the City as determined solely and exclusively by the City Commission: (1). The minimum expected amount of capital investment to be made by an applicant shall be $3,000,000.00. (2). The current and anticipated volume (in dollars) of business or production will be considered during the course of evaluating applications. 151, -C'..- (3). The total length (number of years) of the rebate period being requested may be from 1 to 14 years as may be authorized by controlling law and all as set forth in the agreement relating to the implementation of the rebate. (4). Preference may be given to redevelopment or infill projects during the course of evaluating applications. (5). The likely cost and demand for public services will be considered during the course of evaluating applications. (6). The likelihood that the project relocation or expansion would have occur without the award of a rebate will be considered during the course of evaluating applications. (7). If any other publicly funded economic development incentives have been granted for the project, that fact and the level of such incentives will be considered. Application for rebate. (a). Application. Any eligible person, firm, partnership or corporation which desires a rebate shall file with the City Commission a written application on a form approved by the City. The City Commission may adopt a resolution which establishes criteria for applicants and projects relative to which the City Commission desires to consider for the award of the rebate provided for in this Ordinance. (b). Review. Upon submittal of the application, the City Manager, or designee, shall review same and, within 30 days of submission, notify the applicant of any facial deficiencies. The City Manager, or designee, shall promptly deliver a copy of the application to the Seminole County Property Appraiser who shall promptly notify the applicant and the City Manager, or designee, of any additional information he or she determines to be 161'= necessary for adequate consideration of the application. Complete applications shall be scheduled for a public hearing before the City Commission no later than 60 days following receipt by the City Manager, or designee, of the Property Appraiser's report provided for in this Ordinance. The applicant shall be notified of the date and time of the public hearing. The City Manager may grant time extensions as needed to appropriately address any application. (c). Agreement. As a condition to receiving an rebate, a business will be required to enter into an agreement with the City, in a form approved by the City Attorney, to ensure that the business satisfies all requirements associated with the creation of jobs in the City, the fulfillment of other representations made in applying for the rebate and the granting of the rebate by the City Commission. (d). Role Of Community Redevelopment Agency. If a new business is locating to, or an expansion of an existing business is occurring in, the City's Community Redevelopment Area, the Community Redevelopment Agency overseeing such area shall be provided a copy of the application for review and comment. Input from the Community Redevelopment Agency will be considered by the City Commission in deciding whether a rebate is to be granted, provided, however, that the City Commission may waive this procedure. City Commission consideration of applications. (a). Property Appraiser review and report. Before the City Commission takes action on an application, a copy of the application, once deemed complete, shall be delivered to the Property Appraiser for review and the Property Appraiser may provide a report to the City Commission which shall be requested to include the following information: (1). The total revenue available to the City for the current fiscal year from ad valorem tax sources, or an estimate of such revenue if the actual total 171.,: revenue available cannot be determined; (2). The amount of any revenue lost to the City for the current fiscal year by virtue of rebates previously granted, or an estimate of such revenue if the actual revenue lost cannot be determined; (3). An estimate of the amount of revenue which would be lost to the City during the current fiscal year if the rebate applied for were granted had the property for which the rebate is requested otherwise been subject to taxation; and (4). A determination as to whether the property for which an rebate is requested is to be incorporated into a new business or the expansion of an existing business, or into neither, which determination the Property Appraiser shall also affix to the face of the application. Upon request, the department will provide the Property Appraiser such information as it may have available to assist in making such determination. (b). Eligibility threshold. The threshold for eligibility is whether the Development meets the definition of a new business or of an expansion of an existing business and satisfies any other economic -related characteristics or criteria deemed necessary or relevant by the City Commission that promotes the sustainability of economic development within the City. (c). inefigibla lbusihess. Any applicant in violation of any Federal, State, or local law, rule, code, ordinance or regulation, including without limitation, environmental matters, will not be eligible for a rebate. (d). Rebate criteria. In making its determination as to whether to grant the rebate, and, if granted, the duration and percentage of the rebate, the City Commission shall apply the criteria and considerations set forth in this Ordinance. 18( ;- (e). City Commission ordinance. After consideration of the application, the Property Appraiser's report, input from a community Redevelopment Agency, if applicable, and such other information it deems relevant, and *the application of the rebate criteria, the City Commission may choose in its sole and absolute discretion to enact an ordinance granting a rebate to the applicant. If the City Commission decides to adopt such an ordinance, the ordinance shall be adopted in the same manner as any other general ordinance of the City, and shall include, at a minimum, the following: (1). The name and address of the new business or the expansion of an existing business to which the rebate is granted; (2). The name of the owner(s) of the new business or the expansion of an existing business to which the rebate is granted; (3). The total amount of revenue available to the City from ad valorem tax source for the current fiscal year, the total amount of revenue lost to the City for the current fiscal year by virtue of rebates currently in effect, and the estimated revenue loss to the City for the current fiscal year attributable to the rebate of the business named in the ordinance; (4). The percentage of the ad valorem tax rebate approved; (5). The period of time for which the rebate will remain in effect and the expiration date of the rebate; (6). A finding that the business named in the ordinance meets the requirements of this Ordinance; and (7). A provision conditioning the rebate upon the execution by the business of, and the ongoing compliance with, an agreement, in a form approved by the City Attorney, setting forth, among other things, continuing performance 19 1 _ _ obligations of the business associated with the creation of jobs in the City, the fulfillment of other representations made in applying for the rebate and the granting of -the rebate by the City Commission. Continuing performance. (a). Change in ownership. The business granted a rebate shall inform the City Commission in writing within 10 days as to any changes in ownership of the business granted a rebate and it is prohibited and unlawful to fail to do so. Moreover, the transferee business shall continue to comply with all rebate requirements and shall assume in writing all of the obligations of the transferor business provided for in the agreement required by this Ordinance. Failure of the business granted a rebate to notify the City Commission of any such changes in ownership is cause for revocation of the ordinance granting the rebate, at the City Commission's discretion. (b). Annual filings. The ability to receive a rebate for the period granted shall be conditioned upon the applicant's ability to maintain the Development giving rise to the award of the rebate throughout the entire period. The applicant shall be required to submit an annual renewal statement and an annual report to the City Manager, or designee, on or before March 1 of each year for which the rebate was granted. The annual renewal statement shall certify that the information provided in the original application has not changed. The annual report shall provide a report on the status of the business, evidencing satisfaction of the business maintenance and continued performance conditions set forth in the application. The report shall be prepared in substantially the form approved by the City Manager, or designee, and shall contain such information as the City Manager, or designee, may reasonably deem necessary for the purpose of determining continuing performance by the business of the conditions provided for in this Ordinance, the ordinance specifically 20i; :!U. granting the business an rebate and the representations made in the application. City Commission revocation. Should any business granted an rebate pursuant to this Ordinance fail to file the annual renewal statement and/or annual report on or before March 1 of each year the rebate has been granted as required by this Ordinance, fail to continue to meet the definition of a new business or an expansion of an existing business, fail to timely inform the City Commission of a change of ownership, fail to file a new application upon any change in the information provided in the original application, fail to fulfill any other representation made to the City Commission during the application process, and/or fail to comply with any other requirement provided for in this Ordinance, the City Commission, may, upon 30 days' written notice to the respective business, adopt an ordinance revoking the rebate or take such other action with respect to the rebate as it deems appropriate. Recovery of taxes. If it is determined that a business was not in fact entitled to an rebate in any year for which the business received an rebate, the City shall be entitled to recover all taxes not paid on tangible personal property as a result of the rebate, plus interest at the maximum rate allowed by law, plus all costs of collection, including, without limitation, reasonable attorney's fees. Reapplication. Nothing herein shall prohibit a business from reapplying for an ad valorem tax rebate. Disqua8ification for Incentives. (a). No business and no successor or affiliated business entity having one or more of the same principals and substantially the same business activity may cease business operations in the name of one business and then resume business operations in another 21)�-_ name if the effect of such resumption is to circumvent the provisions of this Ordinance or to prolong an Incentive which has been granted. (b). A business which is the subject of a code enforcement proceeding or which has an unpaid fine relating to a code enforcement proceeding of the City shall not be eligible for an Incentive under this Ordinance. Section 3. Implementing Administrative Actions. The City Manager, or designee, is hereby authorized and directed to implement the provisions of this Ordinance and to take any and all necessary administrative actions to bring into effect the provisions of this Ordinance. Section 4. Conflicts. All ordinances or parts thereof in conflict with this Ordinance are hereby repealed. Section 5. Savings; Effect Of Ordinance. (a). The prior actions of the City of Sanford in terms of the matters relating to any and all actions and activities of the City pertaining to the economic or tourism development of the City, or of an associated nature, are hereby ratified and affirmed. (b). Nothing in this Ordinance shall be construed to affect any suit or proceeding impending in any court, or any rights acquired, or liability incurred, or any cause of causes of action acquired or existing, under any act or ordinance hereby repealed; nor shall any just or legal right or remedy of any character be lost, impaired or affected by this Ordinance. Section 6. Codification; Scrivener's Errors. (a). Section 2 of this Ordinance shall be codified and all other sections shall not be codified. (b). The sections, divisions and provisions of this Ordinance may be renumbered or re -lettered as deemed appropriate by the Code codifier. N® (c). Typographical errors and other matters of a similar nature that do not affect the intent of this Ordinance, as determined by the City Clerk and City Attorney, may be corrected with the endorsement of the City Manager, or designee, without the need for a public hearing. Section 7. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance, or application hereof, is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion or application shall be deemed a separate, distinct, and independent provision and such holding shall not affect the validity of the remaining portions thereof. Section 8. Effective Date. This Ordinance shall take effect nunc pro tunc to October 1, 2019. Passed and adopted this 28th day of October, 2019. Attest: Am-4unim, m V -6k 0, Traci Houchin, CMC, FCRM, City Clerk Approved as to form and Legality: William L. Colbert, Esquire City Attorney City Commission of Florida. 1 i City of Sanford, 23 1 `' _ _ A REPORT OF THE ECONOMIC IMPACT OF I January 30, 2020 Prepared by: City of Sanford 300 N. Park Avenue Sanford, FL 3277 Prepared using Total Impact IMPACT PURPOSE & LIMITATIONS This report presents the results of an analysis undertaken by the City of Sanford using Total Impact, an economic and fiscal impact analysis tool developed and supported by the Austin, TX based economic consulting firm, Impact DataSource. The Total Impact model is a customized software program licensed to the City of Sanford. The model includes estimates, assumptions, and other information developed by Impact DataSource from its independent research effort detailed in City of Sanford's Total Impact User Guide. The analysis relies on prospective estimates of business activity that may not be realized. City of Sanford made reasonable efforts to ensure that the project -specific data entered into the Total Impact model reflects realistic estimates of future activity. No warranty or representation is made by City of Sanford or Impact DataSource that any of the estimates or results contained in this study will actually be achieved. :w IMPACT Executive Surnmary Total Impact 12 CONTENTS Economic Impact Introduction...................................................................................................... 4 Description of the Project.............................................................................. 4 Economic Impact Overview........................................................................... 4 Temporary ConstructionImpact...................................................................6 Fiscal Impact Fiscal Impact Overview...................................................................................7 Cityof Sanford........................................................................................... 8 SeminoleCounty........................................................................................12 Seminole County Public Schools............................................................ 12 OtherDistricts............................................................................................ 12 Public Support Summary of Public Support Considered.....................................................14 Methodology Overview of Methodology ........................................... ....15 About Impact DataSource............................................................................. 16 Executive Summary Total Impact 13 SAN LEON MIXED USE PROJECT 201 S. SANFORD AVE. I ECONOMIC IMPACT Introduction This report presents the results of an economic impact analysis performed using Total Impact, a model developed by Impact DataSource. The report estimates the impact that a potential project in the City of Sanford will have on the local economy and estimates the costs and benefits for local taxing districts over a 10 -year period. Description of the Project San Leon is a mixed-use, infill project with 10 residential units above 2200 square feet of retail on the ground floor. Economic Impact Overview The new residential development planned for is summarized in the table below. It is expected that 75.0°0 of the total $3.0 million development cost will be added to the tax rolls and result in additional property taxes for local governments. It is assumed that 90.0% of the development's 10 residential units/homes will be occupied by new households as opposed to existing city households relocating within the city. It is further assumed that each of the new households will earn $31,500 per year in income. It is assumed that a portion of the household earnings of these new residents will be spent in the City of Sanford. Table 1. Residential Development Summary Accounting for various taxable sales and purchases, including activity associated with the Project, worker spending, and visitors' spending in the community, the Project is estimated to support approximately $1.2 million in taxable sales over the next 10 years. Executive Summary Total Impact 14 Value Development Cost $3,000,000 Percent of development cost added to tax rolls 75.0% Residential Units or Homes 10 Percent of units occupied by new residents 90.0% Number of units/homes occupied by new residents 9.0 Average household income per new household $31,500 Average taxable spending in the city per new hh $2,867 Accounting for various taxable sales and purchases, including activity associated with the Project, worker spending, and visitors' spending in the community, the Project is estimated to support approximately $1.2 million in taxable sales over the next 10 years. Executive Summary Total Impact 14 SAN LEON MINCED USE PROJECT 201 S. SANEORD AVE. I ECONOMIC IMPACT Table 2. Economic Impact Over the Next 10 Years Indirect & Direct Induced Total Number of permanent direct, indirect, and induced jobs to be created 0.0 0.0 0.0 Salaries to be paid to direct, indirect, and induced workers $0 $0 $0 Taxable sales and purchases expected in the City $1,151,451 $0 $1,151,451 The Project is expected to result in new residential property and new residents as summarized below. Table 3. Population Impacts Over the Next 10 Years Value Number of residential units filled by new residents 9.0 Number of new residents in the City 13.5 Number of new school students 4,5 The Project is estimated to support an average of approximately $1.2 million in new non-residential taxable property each year over the next 10 years. The taxable value of property supported by the Project over the 10 -year period is shown in the following table. The values represent the taxable value of property before the consideration of any possible property tax exemptions. Table 4. Value of Taxable Property Supported by the Project Over the Next 10 Years The Project's Property Buildings & furniture, Other Real Prop. Fixtures, & Total Year Land Improvements Equipment Property 1 $0 $2,250,000 s0 $2,250,000 2 50 52,295,000 $0 $2,295,000 3 $0 $2,340,900 s0 $2,340,900 4 $0 $2,387,718 $0 $2,387,718 5 $0 $2,435,472 s0 $2,435,472 6 $0 $2,484,182 $0 $2,484,182 7 $0 $2,533,865 s0 52,533,865 8 $0 $2,584,543 s0 $2,584,543 9 SO 52,636,234 $0 $2,636,234 10 $0 $2,688,958 so $2,688,958 This analysis assumes the Project's real property is assumed to appreciate at a rate of 2.0% per year. The analysis assumes the Project's furniture, fixtures, and equipment will depreciate over time according to the depreciation schedule shown in Appendix A. Executive Summary Total Impact 15 SAM LEON MIXED USE PROJECT 201 S. SANFORD AVE. ! ECONOMK IMPACT Temporary Construction Impact The Project will include an initial period of construction lasting 1 year(s) where $3.0 million will be spent to construct new buildings and other real property improvements. It is assumed that 50.0% of the construction expenditure will be spent on materials and The temporary construction activity will support temporary economic impacts in the community in the form of temporary construction employment and sales for local construction firms. Table 5. Spending and Estimated Direct Employment Impact of Project -Related Construction Activity Amount Total Construction Expenditure $3,000,000 Materials $7,500,000 Labor 57,500,000 Temporary Construction Workers Supported (Average Earnings = $60,800) 24.7 The following table presents the temporary economic impacts resulting from the construction. Table 6. Temporary Economic Impact of Project -Related Construction Activity Taxable sales related to construction activity are presented in the following table. The sales tax revenue generated from construction -period taxable spending is included in the fiscal impact for affected districts during the initial period of construction. Table 7. Construction -Related Taxable Spending Expenditure for Materials Percent of Materials subject to local tax Estimate 51,500,000 50.04 Subtotal Tarabie Materials000 Expenditure for Labor; Paid to construction workers $1,500,000 Percent of gross earnings spent on taxable goods and services 26.0% Percent of taxable spending done locally 35.0% Subtotal Taxable Construction Worker Spending S136,500 Expenditure for Furniture, Fixtures, & Equipment (FF&E) $0 Percent of FF&E subject to local tax 35.0% 5ui 1pJaj-I Taxable FF&E Purchases IQ Total Construction -Related Taxable Spending $886,500 The above construction analysis focuses on the impact resulting from the Project's initial construction investments over the first 1 year(s). Executive Summary Total Impact 16 Indirect & Direct Induced Total Number of temporary direct, indirect, and induced job years to be supported` 24.7 13.8 38.5 Salaries to be paid to direct, indirect, and induced workers $1,500,000 $612,300 $2,112,300 Revenues or sales for businesses related to construction $3,000,000 $1,729,200 54,729,200 ' A job year is de%rned as foil emplovrnent for one person for 2080 hours in a 1.?-monrh span. Taxable sales related to construction activity are presented in the following table. The sales tax revenue generated from construction -period taxable spending is included in the fiscal impact for affected districts during the initial period of construction. Table 7. Construction -Related Taxable Spending Expenditure for Materials Percent of Materials subject to local tax Estimate 51,500,000 50.04 Subtotal Tarabie Materials000 Expenditure for Labor; Paid to construction workers $1,500,000 Percent of gross earnings spent on taxable goods and services 26.0% Percent of taxable spending done locally 35.0% Subtotal Taxable Construction Worker Spending S136,500 Expenditure for Furniture, Fixtures, & Equipment (FF&E) $0 Percent of FF&E subject to local tax 35.0% 5ui 1pJaj-I Taxable FF&E Purchases IQ Total Construction -Related Taxable Spending $886,500 The above construction analysis focuses on the impact resulting from the Project's initial construction investments over the first 1 year(s). Executive Summary Total Impact 16 SAN LEON MIXED USE PROJECT 201 S. SANFORD AVE. J FISCAL IMPACT Fiscal Impact Overview The Project will generate additional benefits and costs for local taxing districts, a summary of which is provided below. The source of specific benefits and costs are provided in greater detail for each taxing district on subsequent pages. Overall, the City will receive approximately $155,400 in net benefits over the 10 -year period and the Project will generate $453,200 in total for all local taxing districts. Table 8. Fiscal Net Benefits Over the Next 10 Years for Local Taxing Districts Figure 1. Net Benefits Over the Next 10 Years for Local Taxing Districts City of Sanford $155,363 Seminole County $114,697 Seminole County Public Schools $176,495 St. Johns River WMD $6,598 Executive Summary Total Impact 17 Present Net Value of Benefits Costs Benefits Net Benefits* City of Sanford $325,673 ($170,311) $155,363 $110,828 Seminole County $186,834 (572,137) $114,697 $88,791 Seminole County Public Schools 5389,456 ($212,961) $176,495 5135,622 St. Johns River WMD 56,598 $0 56,598 $5,054 Total 5908,561 ($455,409) $453,152 $340,295 * The Present Value of Net Benefits expresses the future stream of net benefits received over several years as a single value in todays dollars. Today's dollar and n dollar to be received at dij;ering times in the future are not comparable because of the time value of money. The time value of money is the interest rate or each taxing entity's discount rate. This analysis uses a discount rate of 59. to make the dollars comparable. Figure 1. Net Benefits Over the Next 10 Years for Local Taxing Districts City of Sanford $155,363 Seminole County $114,697 Seminole County Public Schools $176,495 St. Johns River WMD $6,598 Executive Summary Total Impact 17 SAN LEON MIXED USE PROJECT 201 S. SANFORD AVE. ( FISCAL IMPACT City of Sanford The table below displays the estimated additional benefits, costs, and net benefits to be received by the city over the next 10 years of the Project. Appendix C contains the year -by -year calculations. Table 9. City of Sanford: Benefits, Costs, and Net Benefits Over the Next 10 Years Amount Sales Taxes $545 Real Property Taxes, after exemption $94,696 FF&E Property Taxes $0 New Residential Property Taxes $0 Utilitv Revenue $110,101 Utility Franchise Fees 519,482 Utility Taxes 545,959 Building Permits and Fees SO Impact Fees $0 Miscellaneous Taxes & User Fees 554,891 Subtotal Benefits 5325.673 Cost of Providing Municipal Services (S65,715j Cost of Providing Utility Services ($104,596) Subtotal Costs (5170,311) Net Benefits $155,363 Present Value (5% discount rate) $7707828 Figure 2. Annual Fiscal Net Benefits for the City of Sanford $50,000 $40.000 $30,000 $ 20,000 $10,000 $0 ($10,000) ($20,000) ($30,000) 1 2 3 4 5 6 7 8 9 10 Year Benefits Costs —Net Benefits Executive Summary Total Impact 18 SAN LEON MIXED USE PROJECT 201 S. SANFORD AVE. ) FISCAL IMPACT The city will receive benefits from the activity, spending, and investments associated with (1) the Project and (2) the workers. These benefits, associated costs, and resulting net benefits for the next 10 years are shown below for these two categories. Table 10: Net Benefits to the City from the Project and Workers Public Support - City of Sanford The city is considering public support for the Project as summarized below. The Project Workers Total Sales Taxes $419 S125 5545 Real Property Taxes, after exemption $94,696 $0 $94,696 FF&E Property Taxes s0 $0 $0 New Residential Property Taxes so $0 $0 Utility Revenue $0 5110,101 $110,101 Utility Franchise Fees s0 $19,482 519,482 Utility Taxes 545,959 $0 $45,959 Building Permits and Fees so so $0 Impact Fees s0 s0 $0 Miscellaneous Taxes & User Fees s0 554,891 $54,891 Subtotal Benefits $141074 $184.599 $325673 Cost of Providing Municipal Services s0 ($65,715) ($65,715) Cost of Providing Utility Services so ($104,596) ($104,596) Subtotal Costs -S-Q L5170.311) (5170,311) Net Benefits S141,074 514,289 $155,363 Percent of Total Net Benefits 90.8% 9.2% s0 Public Support - City of Sanford The city is considering public support for the Project as summarized below. Executive Summary Total Impact 19 Table 11: Public Support Considered for the Project Land Building FF&E Taxes Taxes Taxes Enter Incentive Year Exempted Exempted Exempted Description Total 1 s0 $16,481 $0 550,000 $66,481 2 s0 516,811 s0 s0 516,811 3 so $17,147 s0 s0 $17.147 4 so 517,490 s0 $0 $17,490 5 s0 517,840 s0 s0 $17,840 6 s0 s0 50 s0 s0 7 s0 s0 $0 $0 s0 8 s0 s0 s0 s0 $o 9 50 $0 s0 $0 s0 10 5o $0 so $0 s0 Total s0 $85,769 s0 $50,000 $135,769 Executive Summary Total Impact 19 SAN LEON MIXED USE PROJECT 201 S. SANFORD AVE. I FISCAL IMPACT Property Tax Exemption - City of Sanford As noted on the previous pages, the net tax benefits to the city of $155,363 account for any possible property tax exemptions. Accordingly, any reduction to revenue sources that will be affected by a property tax exemption has already been deducted from the net benefit value of $155,363. This is to say, the net benefit to the city would increase if the city were to take the exemption off of the table. The table below shows the exemption percentages used to calculate the exemption. These percentages show the portion of the tax amount that will be foregone by the city. The total exemption amount may be limited to a specified cap as shown below. Table 12: Property Tax Exemption Schedule Year Land Building FF&E 1 09. 100% 05. 2 0% 100% 0% 3 0% 100% 0% 4 0% 1000116 0% 5 0% 100% 0% 6 0% 0% 0% 8 0% 0% 050 9 090 0% 0% 10 00. 0% 0`}0 Up to Cap N/A N/A N/A Executive Summary Total Impact 110 SAN LEON MIXED USE PROJECT 201 S. SANFORD AVE. f FISCAL IMPACT Incentive - City of Sanfot-d This analysis considers an incentive that has not be deducted from the net benefits of $155,363 for the city. This financial incentive is weighed against the net benefits that will be received by the city as a result of the Project. In this way, the analysis calculates (1) the rate of return on investment and (2) payback period. The rate of return on investment calculates the average annual rate of return to the city, treating the incentives as the initial investment and the net benefits to the city as the return on investment. The payback period is the number of years that it will take the city to recover the cost of incentives from the net benefits that it will receive as a result of the Project. The table below shows an analysis of these incentives, including a calculation of incentives perjob, rate of return, and payback period. Table 12. Analysis of Incentives Total Incentive 550,000 Incentive Per New Job N/A Rate of Return 311% Payback period (years) 5.8 Note: The Rate of Return and Payback Period are calculated based on the sum of annual incentives, not the present value of the incentives. The graph below depicts the total incentives currently under consideration versus the cumulative net benefits to the city. The intersection indicates the length of time until the incentives are paid back. Figure 3. Incentives Under Consideration City of Sanford $180,000 $160,000 $140.000 5120,000 5100,000 sae,000 $60,000 $40.000 $20,000 $0 1 2 3 4 5 6 7 8 4 10 Year Enter Incentive Description Cumulative Net Benefits Total Incentive Executive Summary Total Impact 111 Real Property Taxes 56,312 FF&E Property Taxes $0 New Residential Property Taxes $286 Net Benefits $6,598 Present Value (5% discount rate) $5,054 SAN LEON MIXED USE PROJECT 201 S. SANFORD AVE. ( PUBLIC SUPPORT Summary of Public Support Considered A summary of the total incentives under consideration for the Project is shown below_ Table 17. Public Support Under Consideration CRA granted a 50,000 new construction grant and city is considering a 100% property tax, rebate for the first 5 years. Executive Summary Total Impact 113 Seminole County Year City of Sanford Seminole County Public Schools Other Districts Total 1 $66,481 s0 so s0 $66,481 2 $16,811 $0 50 s0 $16,811 3 517,147 s0 $0 so $17,147 4 $17,490 $0 so s0 517.490 5 817,840 s0 50 $0 $17,840 6 $0 $0 $0 so s0 7 $0 s0 $0 $0 so 8 so s0 so 50 s0 9 $0 s0 $0 s0 s0 10 so so so s0 so Total $135,769 s0 $0 $0 $135,769 CRA granted a 50,000 new construction grant and city is considering a 100% property tax, rebate for the first 5 years. Executive Summary Total Impact 113 SAN LEON MIXED USE PROJECT 201 S. SANFORD AVE. I METHODOLOGY In the case of the school district, some additional state and federal revenues are estimated on a per new school student basis consistent with historical funding levels. Additionally, this analysis sought to estimate the additional expenditures faced by the city and county to provide services to new households and new businesses. A marginal cost approach was used to calculate these additional costs. This approach relies on two assumptions: 1. The taxing entity spends money on services for two general groups: revenues from residents and revenues from businesses. 2. The taxing entity will spend slightly less than its current average cost to provide local government services (police, fire, EMS, etc.) to (a) new residents and (b) businesses on a per worker basis. In the case of the school district, the marginal cost to educate new students was estimated based on a portion of the school's current expenditures per student and applied to the headcount of new school students resulting from the Project. About Impact DataSource Impact DataSource is an Austin economic consulting, research, and analysis firm founded in 1993. The firm has conducted over 2,500 economic impact analyses of firms, projects, and activities in most industry groups in Texas and more than 30 other states. In addition, Impact DataSource has prepared and customized more than 50 economic impact models for its clients to perform their own analyses of economic development projects. These clients include the New Mexico Economic Development Department and the Tennessee Department of Economic and Community Development. The New Mexico Department of Economic Development uses Impact DataSource's computer model to project the economic impact of new or expanding firms in the state, including costs and benefits for the State of New Mexico, as well as each local taxing district. The model also analyzes the amount of eligible state and local incentives and calculates a rate of return and payback period for these incentives. Executive summary Total Impact 115