HomeMy WebLinkAboutR-1996-145 Grant / US Dept of Commerce / Light Manufacturing Business IncubatorRESOLUTION NO. R-96- 145
A RESOLUTION authorizing and directing the City Manger to accept, on behalf of the
City of Yakima, a grant of up to $1,032,909 from the U.S. Department of
Commerce, Economic Development Administration, for construction
of a light manufacturing incubator and infrastructure at the Yakima
International Airport - McAllister Field, and further designating and
authorizing the City Manager to act as the official representative of the
City and to take such additional steps as may be necessary and prudent
to to complete transactions associated with the grant.
WHEREAS, economic development is a priority of the City of Yakima, and the City
intends to approach economic development on an inclusive, comprehensive basis which
involves public, private and community-based efforts to achieve new investment and re-
development in the City; and
WHEREAS, on March 1, 1994, the City Council adopted an economic development
strategy which includes creation and implementation of a business incubator based on fed-
eral funding; and
WHEREAS, through the efforts of the Department of Community and Economic
Development the City has been offered Financial Assistance Award of up to $1,032,909
from the U.S. Department of Commerce, Economic Development Administration, for
construction of a light manufacturing incubator and infrastructure in the City of Yakima at
the Yakima International Airport - McAllister Field; and
WHEREAS, it is in the best interests of the City of Yakima that a light manufactur-
ing incubator and infrastructure be constructed at the Yakima International Airport -
McAllister Field, and that the City expeditiously accept the Financial Assistance Award of
up to $1,032,909 from the U.S. Department of Commerce, Economic Development
Administration, and proceed promptly to execution of documents officially accepting the
grant; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
Section 1. The City of Yakima accepts the Financial Assistance Award of up to $1,032,909
from the U.S. Department of Commerce, Economic Development Administration, for
construction of a light manufacturing incubator and infrastructure in the City of Yakima at
the Yakima International Airport - McAllister Field.
Section 2. The City Manager is designated as the official representative of the City for this
grant and is authorized and directed to execute, on behalf of the City, acceptance of the
Financial Assistance Award, dated September 30, 1996, a copy of which is attached to this
resolution, designated Exhibit A, and is incorporated in this resolution by reference, and to
take such additional steps as may be necessary and prudent to complete all complete
transactions associated with the grant.
ADOPTED BY THE CITY COUNCIL this 5th day of November, 1996.
ATTEST:
City Clerk
lap \ comm&econ development\incubator\accept grant res. 10/31/96 2:05 PM
RESOLUTION ACCEPTING FEDERAL GRANT FOR BUSINESS INCUBATOR
SEP 30 1996
Mr. R.A. Zais, Jr.
City Manager
City of Yakima
129 North 2nd Street
Yakima, Washington 98901
Dear Mr. Zais:
U.S. DEPARTMENT OF COMMERCE
Economic Development Administration
Jackson Federal Bulking, Room 1856
915 Second Avenue
Seattle, Washington 98174
Fax: (206) 220-7669
Phone: (206) 220-7667
RECEIVED
CITY OF YAKIMA
OCT 41996
OFFICE OF CITY MANAGER
RECEIVED
OCT 01 1996
COMMUNITY OF
DEVELOPMENT
We are pleased to inform you that the Economic Development
Administration (EDA) has approved a Financial Assistance award in an
amount not to exceed $1,032,909 in response to your application for
federal assistance for construction of a light manufacturing
incubator and infrastructure located in the City of Yakima,
Washington.
The total project cost is $1,209,159 which is based on the line
item estimates contained in Attachment No. 1.
Enclosed are two signed copies of the Financial Assistance
Award. Your agreement to the terms and conditions of the award
should be indicated by the signature of your principal official on
both of the signed copies of the Financial Assistance Award. One of
the executed copies should be returned to the Director, Seattle
Regional Office, Economic Development Administration, Jackson
Federal Building, Room 1856, 915 Second Avenue, Seattle, M. 98174.
You are cautioned not to make any commitments in reliance on
this award, nor to enter into negotiations relative hereto, until you
have carefully reviewed the terms and conditions and have determined
that you are in compliance or that you can comply therewith. Any
commitments or undertakings entered into prior to obtaining the
approval of the Government in accordance with its regulations and
requirements will be at your own risk.
Sincerely,
onar• Smith
R gional Director
Enclosures
costo U.S. DEPARTMENT
REV 10-431
0A0 203.24
FINANCIAL ASSISTANCE AWARD
OF COMMERCE
_
1I GRANT 0 COOPERATIVE AGREEMENT
ACCOUNTING CODE
1)96701600291110
RECIPIENT NAME City of Yakima, Washington
AWARD NUMBER
07-39-03625
STREET ADDRESS 129 North 2nd Street
FEDERAL SHARIE Of COST
$ 1,032„909
-
CITY, STATE, ZIP CODE
Yakima, Washington 98901
RECIPIENT SHARE OF COST
$ 176„2150
AWARD PERIOD
From date of approval to 27 months after acceptance
TOTAL ESTIMATED COST
$ 1,209„159
DEPARTMENT OF COMMERCE OPERATING UNIT
Economic Development Administration
AUTHORITY (42 U.S.C. 3121, et seq.) Public Works and Economic Development Act of 1965, as amended:
42 U.S.C. Section 3243(b)(1)18)
PROJECT TITLE
Construction of light manufacturing incubator and infrastructure
This Award approved by the Grants Officer is issued in duplicate
signing the two documents, the Recipient agrees to comply
acceptance by the Recipient, one signed Award document shall
document shall be retained by the Recipient. if not signed
Grants Officer may declare this Award null and void.
0 EDA Standard Terms and Conditions --Construction Program,
® Special Award Conditions
® Line Item Budget
® 15 CFR Part 24, Uniform Administrative Requirernents
Governments
® OMB Circular A-87, Cost Principles for State and Local
® 15 CFR Part 29a, Audit Requirements for State and Local
and constitutes an obligation of Federal funding. By
with the Award provisions checked below. Upon
be returned to the Regional Director and the seconl'
and returned by the Recipient within 15 days of receipt, u.a
dated 7/95
for Grants and Cooperative Agreements to State and Local
Governments
Governments
of Higher Education, Hospitals, and Other
Higher Education and Other Nonprofit Organizations
OMB Circular A-110, Grants and Agreements with Institutions
Nonprofit Organizations Uniform Administrative Requirements
❑ OMB Circular A-122, Cost Principles for Nonprofit Organizations
❑ OMB Circular A-21, Cost Principles for Educational Institutions
❑ 15 CFR Part 29b, Audit Requirements for Institutions of
❑ 48 CFR Part 31, Contract Cost Principles and Procedures
❑ Other(s):
SIGNATURE OF DEPARTMENT OF COMMER : GRANTS 0 - ,` ER
,1 -
TITLE
A. Leonard Smits,
nal Director
DATE
SEP 30 l9)6
TY NAME AND SIGNA URE OF AUTHORIZED RECIPIENT OFFICIAL
TITLE
DATE
ocictm ca.to U.S. DEPARTMENT OF COMMERCE
46EV 10-93)
DAO 203.26
FINANCIAL ASSISTANCE AWARD
® GRANT D COOPERATIVE AGREEMENT
' ACCOUNTING CODE
096701600291110
RECIPIENT NAME City of Yakima, Washington
AWARD NUMBER
07.39-03625
STREET ADDRESS 129 North 2nd Street
FEDERAL SHARE OF COST
8 1,032,909
CITY. STATE, ZIP CODE
RECIPIENT SHARE OF COST
Yakima, Washington 98901
$ 176,250
AWARD PERIOD
TOTAL ESTIMATED COST
From date of approval to 27 months after acceptance
8 1,209,159
DEPARTMENT OF COMMERCE OPERATING UNIT
Economic Development Administration
AUTHORITY 142 U.S.C. 3121, et seq.) Public Works and Economic Development Act of 1965, as amended:
42 U.S.C. Section 3243(b)(1)(B)
PROJECT TITLE
Construction of Eght manufacturing incubator and infrastructure
This Award approved by the Grants Officer is issued in duplicate and constitutes an obligation of Federal funding. By
signing the two documents, the Recipient agrees to comply with the Award provisions checked below. Upon
acceptance by the Recipient, one signed Award document shall be returned to the Regional Director and the second
document shall be retained by the Recipient. If not signed and returned by the Recipient within 15 days of receipt, the
Grants Officer may declare this Award null and void.
13 EDA Standard i erms and Conditions—Construction Program, dated 7/95
1J Special Award Conditions
® Line Item Budget
❑X 15 CFR Part 24, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local
overnments
X OMB Circular A-87, Cost Principles for State and Local Governments
Governments _
13 15 CFR Part 29a, Audit Requirements for State and Local
❑ OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals, and Other
Nonprofit Organizations Uniform Administrative Requirements
❑ OMB Circular A-122, Cost Principles for Nonprofit Organizations
• OMB Circular A-21, Cost Principles for Educational Institutions
❑ 15 CFR Part 29b, Audit Requirements for Institutions of Higher Education and Other Nonprofit Organizations
■ 48 CFR Part 31, Contract Cost Principles and Procedures
❑ Other(s):
SIGNATURE OF DEPARTMENT OF COMM -CE GRANT CER
TITLE
DATE
A. Leonard Smith
Se 3 0 1996
Regional Director .
TYPED AME AND SIGNA RE 0 AUTHORIZED RECIPIENT OFFICIAL
TITLE
DATE
Form ED -508
U.S. DEPARTMENT OF COMMERCE ATTACHMENT N0. 1
(Rev. 3/89) ECONOMIC
PUBLIC WORKS
RECIPIENT: City of Yakima,
DEVELOPMENT ADMINISTRATION
PROJECT COST CLASSIFICATIONS
Washington
EDA Award No. 07-39-03625 State: Washington County: Yakima
Cost Classification PrAWAid Approved
Administrative and legal expenses $ 29,860 $ 29,860
Land, structures and rights-of-way 176,750 176,750
appraisals, etc.
Relocation expenses and payments 500 500
Architectural and engineering fees 17,500 1.7,500
Other architectural and engineering 3,000 3,000
fees
Project inspection fees 14,000 14,000
Demolition and :removal 0 0
Construction 909,970 909,970
Equipment 0 0
Contingencies 57,579 57,579
TOTAL PROJECT COSTS $ 1,209,159 $ 1,209,159
YAKIMA BUSINESS INCUBATOR
PREPARYD ST:
TRs ARGUS GROUP
AUGUST 1994
CITY Or YAKIMA
MAYOR PA? $ZRNDT
A$$ISTAN? MAYOR 'CLAIM NCR $ARNI?T
COUNCIL KSKBSR LYNN SVC /LANAI
COUNCIL KZXBZR MINERS PSALMS
COUNCIL KSKBZR 11 ILL BRADO
COUNCIL KSMSSR RSRNARD $INS
COON CIL KZMBZR ZRNIS $SRGLR
CITY KANAGSR RICHARD ZAIS
CONI(ONITY AND =CONOKIC DZVZLOPMZNT
DIRS C?OR GLSNN ,VALSNZUSLA
Exhibit I'M
Special Award Conditions
Page 5 of 5
Award No. 07-39-03625
City of Yakima, Washington
11. TITLE: Prior to EDA authorization to start construction, the
Recipient shall provide evidence satisfactory to the Government
that the Recipient has acquired good and merchantable title, free
of all mortgages, foreclosable liens, or encumbrances, to all
land, rights-of-way, and easements necessary for the completion of
the Project.
12. INDEMNIFICATION AGREEMENT: During the useful life of the project,
which is 10 years from the date of the Financial and Assistance
Award, the Recipient shall indemnify and hold harmless EDA from any
liability, losses, damages, suits, judgements, attorney and expert
fees, trial expenses and other expenses arising out of the unique
partnership between the Recipient and the use of Washington State
University graduate students to provide design assistance for this
project.
13. WETLAND DELINEATION: Prior to the start of construction, the
Recipient shall provide evidence that the recently completed
"wetland delineations" has been reviewed and accepted by the U.S.
Army Corps of Engineers, as requested in the letter dated May 30,
1996 from the COE Central Washington Regulatory Office.
Confirmation of the presence of "jurisdictional wetlands" may
initiate a requirement for further consultation and development of
acceptable mitigation measures.
14. WASHINGTON SEPA: Prior to the start of construction, the Recipient
shall provide evidence satisfactory to EDA that the Washington
State Environmental Policy Act, (SEPA, Chapter 43.21C RCW)
requirements have been completed, covering the entire proposed
project, and that an appropriate "Determination" has been filed per
WAC Chapter 197-11, SEPA Rules.
15. EMPLOYMENT PLAN: Prior to the first disbursement, the :Recipient
shall provide an acceptable employment plan to overcome the under
utilization of women and minorities in its workforce. The Plan
will specifically address representation among officials and
manager, professional, technicians, and craftspersons.
1
Exhibit HA'.
Special Award Conditions
Page 4 of 5
Award No. 07-39-03625
City of Yakima, Washington
9. A/E Agreement: Prior to EDA authorization to begin design of this
project, the Recipient shall submit to the Government a plan
showing how the engineering tasks to be accomplished under this
grant will be performed. At a minimum, the engineering plan will
include an organization chart showing who will be responsible for
each portion of the engineering services, resumes of each project
member, and a list of similar work performed by each member of the
proposed design team. Additionally, the plan shall include
details on how the City will manage the risk that this unique
design relationship with Washington State University graduate
students will impose on the City. The City should include
certificates of insurance for the policies showing the amounts
errors and omissions and liability insurance coverage for the
design team. The plan shall cover all phases of the project from
preliminary engineering through construction completion.
EDAs review of plans and specifications created for this project
is limited to ensuring that the work to be built is within the
scope of work for the grant and that Federal procurement
regulations are satisfied. EDA does not review design
calculations or ensure that designs satisfy local building codes.
If any consultants will be members of the engineering team, the
Recipient shall submit to the Government for approval an
Architect/Engineer Agreement that meets the requirement of section
I of the EDA publication, "Requirements for Approved Projects" as
well as the competitive procurement standards of 15 CFR Part 24 or
OMB Circular A-110. The fee for basic Architect/Engineer services
shall be a lump sum or an agreed maximum. No part of the fees for
other services shall be based upon a cost -plus -a -percentage -
of -cost, or a cost using a multiplier method of contracting.
10. OPERATION AND MAINTENANCE AGREEMENT: If the Recipient will not
operate and maintain the project, then prior to initial
disbursement, the Recipient shall provide to EDA an executed copy
of an Agreement with the party responsible for providing the
project's operation and maintenance. Such Agreement shall be
consistent with EDA policies including, but not limited to,
nondiscrimination, nonrelocation, excessive profits, and adequate
consideration. The Agreement shall also set forth that prior to
occupancy, the occupant of any part of the land acquired or
improved by this project must furnish to the Recipient, for
transmittal to EDA, properly executed EDA forms evidencing as-
surance of compliance with EDA Civil Rights requirements and
evidencing that such occupancy is not in violation of the
nonrelocation requirements of EDA's regulations at 13 CFR 309.3.
Exhibit "Au
Special Award Conditions
Page 3 of 5
!Award No. 07-39-03625
City of Yakima, Washington
b. The Recipient further agrees that in the event that it
alienates in any manner any interest in the realproperty
acquired or improved with EDA Award funds, the Government shall
be entitled to recover damages. EDA's regulation at 13 CFR
314.4 provides that, upon disposition of property acquired or
improved with EDA Award funds, the Government shall be entitled
to a recovery based upon the ratio of the percentage of the
Government's participation in the total cost of the Project to
the fair market value of the property at the time of
disposition. For the purposes of the lien, the amount of the
Government's damages shall be the full amount of the EDA Award,
plus interest from the date of the disposition.
c. This lien must remain in effect throughout the useful life of
the Project as defined in 13 CFR 314.6(a).
d. Alienation shall include but not be limited to sale, lease,
rent, option, or mortgage, with the exception of those leases
or rental agreements the Government approves in writing for
tenant space in the Project facilities.
6. LEASING RESTRICTIONS FOR TENANTS OF INCUBATOR
The Recipient agrees that any leasing or renting of the fac'.lities
involved in this Project shall be subject to the prior written
approval of EDA. Prior to EDA granting said approval, it must be
satisfied inter alia, that said lease arrangement is consistent
with the authorized general and special purpose of the Award; that
said lease arrangement will provide adequate employment and
economic benefits for the area in which the property is located;
that said lease arrangement is consistent with EDA policies
concerning, but not limited to, nondiscrimination, nonrelocation
and excessive profits; that the proposed Lessee is providing
adequate compensation to the Recipient for said lease and that
said lease arrangement shall include a covenant prohibiting the
use of suchproperty for any purpose other that the general and
special purpose of the Award!. Any Lease Agreement entered into by
the Recipient of said property shall be subordinate, junior and
inferior to the first priority lien mentioned in Special Condition
No. 5.
7. LAND LEASE: Prior to first disbursement, the Recipient will
submit to EDA a copy of the land leasing agreement with the County
for the 10 year useful of the project.
8. APPROVAL OF LEASES: Prior to first disbursement, Recipient shall
clarify if the Air Terminal Board, Yakima Air Terminal, will be
required to approve the land lease or tenant leases of the
incubator building. If the Air Terminal Board is required to
approve tenant leases or the land lease, Recipient will provide
EDA with evidence of such approval prior to first disbursement.
Exhibit "A"
Special Award Conditions
Page 2 of 5
Award No. 07-39-03625
City of Yakima, Washington
A11 changes to this goal, as published in the Federal Register in
accordance with the Office of Federal Contract Compliance Programs
regulations at 41 CFR 60-4.6, or any successor regulations, shall
hereafter be incorporated by reference into these Special Award
Conditions.
Goals for minority participation shall be as prescribed by Appendix
B-80, Federal Register, Volume 45, No. 194, October 3, 1980, or
subsequent publications. The Recipient shall include the "Standard
Federal Equal Employment Opportunity Construction Contract Spec-
ifications" (or cause them to be included, if appropriate) in all
Federally assisted contracts and subcontracts. The goals and
timetables for minority and female participation may not be less
than those published pursuant to 41 CFR 60-4.6.
3. DISCLOSURE OF FEDERAL PARTICIPATION: No amount of this Award shall
be used to finance the acquisition of goods or services (including
construction services) for the Project unless the Recipient agrees
to:
a. specify in any announcement of the awarding of the contract
for the procurement of the goods and services involved
(including construction services) the amount of Federal funds
that will be used to finance the acquisition; and
b. express the amount announced pursuant to paragraph (a) as a
percentage of the total cost of the planned acquisition.
The foregoing requirements shall not apply to a procurement for
goods or services (including construction services) that have an
aggregate value of less than $500,000.
4. BUY AMERICAN -MADE EQUIPMENT OR PRODUCTS: Recipients are hereby
notified that they are encouraged, to the extent feasible, to
purchase American-made equipment and products with funding provided
under this program in accordance with Congressional intent as set
forth in the resolution contained in Public Law 103-317, Sections
607. (a) and (b).
5. FIRST PRIORITY UNSUBORDINATED LIEN:
a. Recipient expressly agrees to grant to the Government, prior to
initial Award disbursement, a first priority unsubordinated
lien against, or security interest in, the property acquired or
improved in whole or in part with the funds made available
perfected in accordance with local law. The Government will,
in its sole discretion, determine whether the lien or security
interest which has been granted to the Government is
satisfactory, and it may require an opinion of counsel for the
Recipient to substantiate the lien or security interest has
been properly recorded.
EXHIBIT "A"
U.S. DEPARTMENT OF COMMERCE
Economic Development Administration
Public Works and Development Facilities
RECIPIENT: City of Yakima, Washington
Page 1 of 5
Award No. 07-39-03625
SPECIAL AWARD CONDITIONS
1. PROJECT DEVELOPMENT TIME SCHEDULE: The Recipient agrees to the
following Project development time schedule:
Time allowed after receipt of Financial Assistance Award for:
Return of Executed Financial Assistance Award - 15 days
Time allowed after acceptance by Recipient of Financial
Assistance Award for:
Start. of Construction - 300 days
Construction Period - 9 months
Project Closeout - All Project closeout documents, including final
financial information and any required program reports, shall be
submitted to the Government not :..ore than 90 days after the state
the Recipient accepts the completed Project from the contractor(s).
The Recipient shall pursue diligently the development of the
Project so as to ensure completion of the Project and submission of
closeout documents within this time schedule. Moreover, the
Recipient shall notify the Government in writing of any event: which
could delay substantially the achievement of the Project within the
prescribed time limits. The Recipient further acknowledges that
failure to meet the development time schedule may result in the
taking action to terminate the Award in accordance
with the regulations set forth at 13 CFR 305.99(b) and 15 CFR 24.43
(53 Fed. Egg., 8048-9, 8102, March 11, 1988).
2. GOALS FOR WOMEN AND MINORITIES IN CONSTRUCTION: Department of
Labor regulations set forth in 41 CFR 60-4 establish goals and
timetables for participation of minorities and women in the con-
struction industry. These regulations apply to all Federally
assisted construction contracts in excess of $10,000. The
Recipient shall comply with these regulations and shall obtain
compliance with 41 CFR 60-4 from contractors and subcontractors
employed in the completion of the Project by including such
notices, clauses and provisions in the Solicitations for Offers or
Bids as required by 41 CFR 60-4. The goal for the participation of
women in each trade area shall be as follows:
From April 1, 1981, until further notice: 6.9 percent
OBSERVATIONS
A key to the development of the Yakima
Business Incubator is the desirability of
its location for growth potential of
business. Another key is the communities
desire to assist companies located nearby
to expand to Yakima.
Yakima has more than sufficient land
resources to accommodate and encourage
business expansion. This would be
attractive to emerging companies.
There is a sufficient labor force to
accommodate businesses work force
requirements. There appears to be more
than adequate resources for training
people for various job functions.
However, the lack of housing, especially
rental properties could prevent or reduce
the attractiveness of expansion into the
Yakima area.
A review of past studies on economic
conditions and trends indicates that the
population in Yakima is growing.
5•
However, the diversity of industries has
not followed national trends.
There is a basic difference between job
creation and job foundation for. business.
Job creation would be classified as
minimum to low paying positions i.e.,
sales jobs at major retailers or fast
food establishments. Job foundation
would be classified as growth potential
positions in emerging industries' 'that
would be skilled in nature, and which
grow with the business. Historically,
incubators attract businesses that are
involved in emerging industries, which
create positions that form job
foundation.
Business license requests has stayed
consistent. At approximately 3,000 a
year since 1988. This would indicate a
stable growth, yet flat.
6
•
Because of the preceding points it is
felt that the following incubator project
should go forward with the following
recommendations:
OP
That it be developed to diversify
the local economy for a better job
foundation for the community.
That a cornerstone or key tenant be
procured which entrepreneurial
businesses can work with, and that
will form a solid financial base for
the incubator.
•- The incubator should meet the key
tenants facility needs.
- After the key tenant is procured, a
balance of emerging business and
start-up business should be
obtained. Too may incubators fail
because they do not have a key
tenant or they are highly
concentrated on start-up business.
7
- As the incubator would be of
economic benefit to the City and
County of Yakima, both should share
in its initial financial funding.
After initial funding the'incubator
should be self sustaining.
- The incubator must identify a
champion or driving force that will
promote and guide it.
- 90% of incubators are non-profit and
60% of those are 501(c)(3)s.
However, most of these organizations
often operate
with
ongoing
subsidies. It is recommended that
Yakima's incubator be geared to
stand on its own and to require
limited governmental funds.
- There appears to be sufficient
leasable space in Yakima. However,
to ensure success for the project a
building should be constructed to
afford the incubator the ability to
8
expand it facility as demand for its
service grows.
- The incubator, in order to best
serve the Yakima region, should
develop a program that would provide
technical assistance to growth
companies that have facilities away
from the incubator, yet would
benefit from services offered by the
incubator.
- A manager must be found to guide the
development of the incubator and to
assist in obtaining financing and a
key tenant.
- A board of directors consisting of a
mix of private and public sectors,
;must be formed to assist the
manager.
- Incubator services must ]be marketed
throughout Eastern Washington.
9
- A commitment of approximately
$500,000 to 750,000 must be obtained
to cover initial start-up costs.
10
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA $TATEMENT
Item Not 1
For Meeting Of November 5, 1996
ITEM TITLE: Resolution Accepting a Grant from the United States Department
Commerce for the Construction of a Light Manufacturing Business Incubator.
SUBMITTED BY: Glenn J. Valenzuela, Director of Community and Economic Develo
CONTACT PERSON/TELEPHONE: Glenn J. Valenzuela, 575-6113
of
SUMMARY EXPLANATION:
The City has notification that we have been successful in obtaining a $ 1,032,909 grant from
the Economic Development Administration division of the United States Department of
Commerce. The grant if accepted will allow for public infrastructure improvements in the
City's ability to deliver water and sewer services to the site, plus the construction of a twenty
thousand square foot facility to house the incubator.
This grant is one of the largest grants ever received by the City and is a part of the City's
overall economic development strategy. The attached historical summary has been provided
for Council information.
Funding Source United States Department of Commerce Grant in the amount of
$1,032,909.
APPROVAL FOR SUBMITTAL:
CityYana er
9
STAFF RECOMMENDATION: Staff recommends approval of the Resolution.
BOARD RECOMMENDATION: The Council Committee on Economic Development
recommends approval.
COUNCIL ACTION:
BUSINESS INCUBATOR ----HISTORY
The City of Yakima Council Policy in 1993-4 included a priority of economic
development in an effort to create jobs and develop a positive business climate. Staff
began developing a strategy in a series of applications and reorganization tb become
more business active. The following represents those efforts in the submission and
successful application of those efforts.
March 1994: City is successful in obtaining state designation as a State
Empowerment Zone. As part of the strategy, it was stated `The City of Yakima will
formulate and enact a coordinated approach to develop an active business incentive
zone within the designated Neighborhood Reinvestment Area. The Yakima
International Airport will serve as the hub in the development of the community's
overall economic development strategy. The City will create and implement a
business incubator, with the use of federal funds, to develop a number of businesses
locally that can participate in regional and international trade opportunities" Council
approved Resolution March 1, 1994.
May 1994; City Council approves a professional service contract with the Argus Group
to develop a feasibility study to evaluate the need for the potential success of a
business incubator. The Council approved the contract for an amount of $6,200 by
unanimous vote.
October 1994: City delegation of Mayor Pat Berndt, Council member Lynn Buchanan,
Chamber Manager Gary Webster, Hispanic Chamber President Juan Aguilar, and
CED Director Glenn Valenzuela travel to Washington D.C. to discuss enterprise
community application and potential projects in the City. At a meeting with Mr„ Luis
Bueso, Director of the Planning Division, Economic Development Administration, it is
shared that the City has completed a feasibility study for a business incubator, Mr.
Bueso invites the City to request authorization to apply for Economic Development
Administration assistance in the construction of a business incubator.
November 1324 - April 1995: Council Economic Development Committee reviews the
incubator concept and agrees to formulate the request for assistance.
May 25. 1995: Community and Economic Development Director submits a request for
authorization to apply for Economic Development Administration grant funding to
support the construction of a small business incubator facility and infrastructure
developments associated with the facility.
,June 26. 1995: Mr. Lloyd Kiirry, Economic Development Administration
Representative, requests that the appropriate Economic Development Administration
forms be submitted to allow for review by the regional office. All forms are provided to
the City.
July 10. 1995: The City submits the required Pre application Construction Grant
Proposal requesting Economic Development Administration funding support.
April 29. 1996: The City receives a formal invitation to apply for Economic
Development Administration funding from the Regional Director, Leonard Smith. The
City, at this time, is authorized to submit an application in the amount of $800,000. The
process is explained to the City staff, the most critical issue is timing as Economic
Development Administration is limited to the number of applicants it may receive
during the annual funding cycle.
August 5. 1996: The City submits a formal application in the amount of $1,032,909
after negotiations with the Economic Development Administration. The Economic
Development Administration Regional office begins its internal review of the request.
August 26. 1996: City staff is informed by regional staff that the proposal has received
regional endorsement and has been forwarded to the Washington D.C. office for
review.
September 30. 1996: The City is notified that the application has been approved
subject to the terms and conditions of the United States Department of Commerce.
The award amount is $1,032,909 making this award one of the largest in City history.
October 17. 1996: Council members Beauchamp and Puccinelli, Planner McBride
and Director Valenzuela attend a meeting with regional Economic Development
Administration staff to discuss the terms and conditions of the grant. The meeting is
held to clarify and understand fully the terms in order that the City can comply with the
agreement. City representatives are told that the grant acceptance must take place
prior to November 15, 1996 or the funds will be returned to the national office for
redistribution.
FUTURE ACTIONS:
Should the City Council accept the grant, the following steps will be necessary to
complete the requirements of the grant.
1) The City will need to meet all obligations of the terms and conditions of the award
prior to the initial disbursement of funds. It is anticipated that staff will meet all
obligations prior to January 1, 1997.
2) Staff will request authorization to proceed with a professional service contract to
allow for the development of a business plan for the incubator. It is anticipated that
the plan will cost in the neighborhood of $6,000. This will include tenant lease
rates, tenant terms, maximum length of occupancy in the incubator, oversight
structure, services offered with rates, and financial pro forma. Council action
required: December 3, 1996.
3) Staff will request authorization to release a Request for Qualifications, seeking
individuals or firms to enter into an agreement with the City to operate the facility.
Council action required: January 1997.
4) Staff will begin marketing the incubator for potential tenants. This activity will begin
once the business plan has been accepted by the Council.
5) Council appointed oversight committee. It is recommended that the Council
Economic Development Committee review applicants and offer a recommendation
to the full council. Requires Council action: early 1997.
6) Staff will request authorization to place the construction contract out to bid. Staff
may produce two bids, one for infrastructure and one for the facility. Requires
Council action: spring or early summer 1997.