HomeMy WebLinkAbout09/17/2002 Special Meeting 1 4
YAKIMA, WASHINGTON
SPECIAL MEETING OF THE CITY COUNCIL
SEPTEMBER 17, 2002 - 7:30 A.M.
COUNCIL CHAMBERS - CITY HALL
1. ROLL CALL
Present:
Council: Mayor Mary Place, presiding, Council Members Clarence Barnett,
Lynn Buchanan, Paul George, John Puccinelli, and Bernard Sims
Staff: Dick Zais, City Manager; Bill Cook, Director of Community and
Economic Development; Bill Cobabe, Neighborhood Development
Services Manager; Michael Morales, Grants Writer; Laura Salinas,
and City Clerk Roberts
Also: Dave McFadden, New Vision; and Julie Smith, LeMaster & Daniels
Absent: Council Member Larry Mattson (excused)
2. COUNCIL / YAKIMA DOWNTOWN ASSOCIATION REVIEW OF RENEWAL
COMMUNITY PROGRAM
Bill Cook advised that the information provided to Council today replaces what
was previously distributed in their packet. The new information contains the same
material, but is a cleaned -up version with a slightly different format. He described
the Renewal Community boundary as 1 -82, Mead, 16 Avenue, along Fruitvale
Boulevard and "I" Street. The program is separated into four categories:
infrastructure, facilities, equipment, and employees. Michael Morales and Bill
Cook reviewed those categories using a PowerPoint presentation (See
Attachment A).
• INFRASTRUCTURE
There are two funding sources for infrastructure:
o Supporting Investments in Economic Development (SIED), through
Yakima County
o Community Economic Revitalization Board (CERB), a Washington
State economic development program.
Dave McFadden, New Vision, clarified that predevelopment work may also qualify
for SIED funding. He further stated that the applicant must contribute a 10%
match towards the project and must be a city, county or port district.
• FACILITIES
Michael Morales described several programs available if someone wants to
construct or rehabilitate a building and responded to Council's questions:
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• Commercial Development Loan Fund — Proposed
Estimated to be available to the City by January 2003, this program would
provide a $5 million pool of low interest financing for economic development
projects with a minimum loan amount of $250,000. The funding source is a $1
million grant and $4 million Section 108 loan from the U.S. Department of
Housing and Urban Development.
• Industrial Revenue Bonds
Local public corporations may issue tax - exempt Industrial Revenue Bonds.
These bonds are sold at a lower interest rate because the payments to IRB
buyers are not subject to federal income tax. Yakima County Development
Association administers Yakima County's program.
• Renewal Community Commercial Revitalization Deduction
Michael Morales stated that the State may allocate up to $12 million in
deductions for this program. This is a use -or -lose allocation program. Staff
was waiting for guidance from HUD on this program before vigorously
promoting it and is now looking at building permits and certifications of
occupancy to see who might qualify for this program.
• Renewal Community Zero Capital Gains
Michael Morales explained that this will take effect in a few years; the holder
has to have the asset for a minimum of five years. This program is designed
for a company that wants to start a business and then sell it within a few years.
• Historic Preservation Tax Abatement Program •
Mr. Morales stated that this program allows the reduction of property taxes by
25% for a ten -year period. The property must be located within the City of
Yakima and must be listed on the National Register of Historic Places.
• New Market Tax Credit
Mr. Morales reported that this program allows equity investors in qualified
Community Development Entities to obtain a tax credit against their federal
taxes of 5 -6% of the amount invested for each year the investment is held,
limited to seven years. He commented that it can take one to two years to
become a qualified Community Development Entity. Luz Gutierrez, Rural
Community Development Resources, explained that this program is not as •
complicated as it appears and that her business is already doing most of that.
Julie Smith of LeMaster and Daniels, distributed a handout and described the •
tax advantages available under this program, as well as the Renewal
Community Tax Incentives Employment Wage Credit, Increased Section 179
Deduction, Commercial Revitalization Deduction, and Zero - Percent Capital
Gains. Brian Powell of Moss Adams reported that his firm has seen a lot of
activity in the credit programs, particularly the Employment Wage Credit.
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SEPTEMBER 17, 2002 — SPECIAL MEETING
EQUIPMENT
• Renewal Community Section 179 Deduction
• State Community Empowerment Zone
• CEZ Manufacturing Equipment Sales Tax Exemption
Michael Morales briefly expanded on the information provided by Julie Smith
on these programs. The Renewal Community Section 179 Deduction allows
the business to purchase equipment and take a substantial depreciation in
taxes. The CEZ Manufacturing Equipment Sales Tax Exemption program
allows the exemption of sales tax when the facility and /or equipment is used
for qualified manufacturing activities during the year in which the investment
project is certified as operational and is allowed for the subsequent seven
years.
OPERATIONS /PERSONNEL
• Renewal Community Wage Credits
There are two types of credits available:
o Renewal Community Employment Credit
Bill Cobabe reported this program is a credit against federal taxes, up to
$1,500, and is available for each employee meeting the criteria of living
and working within the Renewal Community boundary.
o Work Opportunity Tax Credit
This program allows a credit of up to $2,400 against federal taxes for
each new hire from groups that have high unemployment rates or other
special employment needs.
Mayor Place announced that the City is looking for qualified volunteers to serve
on the Renewal Community Board.
3. ADJOURNMENT
The meeting adjourned at 8:55 a.m.
READ AND CERTIFIED ACCURATE BY: _ i�� ;/ ." _s 2 --
CO •IL MEMBER DATE
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COUNCIL MEMBER DATE
ATTEST:
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CITY CLERK / A Y PLACE, MAYOR
Minutes prepared by Karen Roberts. An audio and video tape of th s meeting are available in the City Clerk's Office.
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