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HomeMy WebLinkAbout03/18/2008 10 Yakima Italstone Project SIED Funding Grant Application • BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. w For Meeting Of: March 18, 2008 ITEM TITLE: Consideration of a resolution authorizing the City Manager to execute and submit a $428,000 grant/loan application and contract with the Yakima County Supporting Investments in Economic Diversification (SIED) fund for the Yakima Italstone project. SUBMITTED BY: Bill Cook, Director of Community and Economic Development CONTACT: Bill Cook, 575 -6113 SUMMARY EXPLANATION: This project will build a new street (23rd Avenue) off of Ahtanum Road and extend Oak Street so it provides a full loop within the business park. Water and wastewater utilities will also be extended from the cities existing lines near Ahtanum Road. Approximately 850 linear feet of roadway will be constructed to industrial standard. Sidewalks, curb, gutters and lighting will also be built on both sides of this roadway. Water and sewer utilities will also be extended to parallel • road improvements With Council approval, the City will be eligible to apply for and accept SIED funds for the project, in the amount of $428,000. The SIED program is a Yakima County funding source for economic development that originates from a refund of County tax revenue from the State of Washington. SIED is administered for the County by YCDA/New Vision, and the advisory board is appointed by the County, with nominations from the cities. • Resolution X Ordinance _ Contract Other: Grant & Loan Application Funding Source: Yakima County SIED Fund Approval for Submittal: C� '`� - k Cit anager STAFF RECOMMENDATION: Staff recommends approval of the Resolution. BOARD /COMMITTEE/COMMISSION RECOMMENDATION: COUNCIL ACTION: III 1 • RESOLUTION NO. R -2008- A RESOLUTION Authorizing the City Manager to execute and submit a grant and loan application with Yakima County for funding from the Yakima County Supporting Investments in Economic Development (SIED) Fund for infrastructure improvements necessary for the Yakima Italstone project. WHEREAS, Yakima County has established the Supporting Investments in Economic Diversification (SIED) fund to assist the growth of business in the County; and • WHEREAS, economic development is a priority for 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 redevelopment in the City; and WHEREAS, this project will build a new street (23rd Avenue) off Ahtanum Road and extend Oak Street so that it provides a full loop within the business park; and WHEREAS, this project involves constructing approximately 850 linear feet of roadway to industrial standard, including sidewalks, curbs, gutters and lighting; and WHEREAS, this project will also include the extension of water and sewer utilities III parallel to the road improvements; and WHEREAS, significant improvement has been made to the area in recent years to encourage business growth of existing and new companies in and around the airport. These improvements include over $7 million to widen and improve Washington Avenue, $880,000 to install a fiber optic loop around the airport, and several SEID funded projects to assist business expansion (Cub Crafters, Cascade Quality Molding, Yakima Air Park LLC, etc.); and WHEREAS, the project was designed and reviewed in 1999, and was approved to proceed at the developer's initiative; and WHEREAS, the cost of the project is estimated to be $535,000; and WHEREAS, $428,000 in funding (through a grant/loan) may be available from Yakima County through the SIED Fund for infrastructure improvements; and WHEREAS, the developer will provide equity together with the value of the right -of -way dedicated to equal at least $107,000; and WHEREAS, due to various budgeting constraints experienced by the City, this type of infrastructure investment has become cost prohibitive without the use of external funding sources; and WHEREAS, Schultz Construction LLC has requested that the City submit a grant/loan • application with Yakima County to fund the infrastructure improvements from the SIED Fund; and 1 WHEREAS, the City Council deems it to be in the best interest of the City of Yakima to authorize submittal of a grant/loan application with Yakima County for funding of said infrastructure improvements from the SIED Fund, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized and directed to execute and submit grant and loan application with Yakima County for funding from the Yakima County Supporting Investments in Economic Development (SIED) Fund for infrastructure improvements necessary for the Yakima Italstone Project. The City Manager is hereby designated as the official representative of the • City to act in connection with that funding application and is authorized to take such additional actions as may be necessary and prudent to complete the project. ADOPTED BY THE CITY COUNCIL this 18th day of March, 2008. ATTEST: David Edler, Mayor City Clerk • • 2 Yakima County SIED Fund Supporting Investments in Economic Diversification Application for funding Yakima County SIED Board Supporting Investments In Economic Diversification • APPLICATION FOR FUNDING CERTIFICATION Applicant: City of Yakima Federal Tax Number: 91- 6001293 Contact: Bill Cook Title: Director of Community & Economic Development Telephone: 509/575 -6113 Fax: 509/576 -6792 Email: bcook@ci.yakima.wa.us Address: 129 North 2 Street Yakima, WA 98901 Indicate the minimum necessary total public project infrastructure costs. Amount of SIED loan requested: $214,000 (see Policies for limits) Amount of SIED grant requested: $214,000 (see Policies for limits) Local match (minimum 10% of SIED request): $107,000* *Developer equity and right -of -way List other funding source(s): TOTAL public project costs. • $535,000 . TOTAL private investment in plant/equipment $700,000 Project title: Resolution # authorizing application: TBD Declaration: I HEREBY CERTIFY THAT THE INFORMATION GIVEN IN THIS APPLICATION TO THE SUPPORTING INVESTMENTS IN ECONOMIC DEVELOPMENT BOARD IS TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF. Signature of Responsible Official: Print or Type Name and Title: Richard A. Zais, Jr., City Manager • Application for Funding, 1998 Page 2 Yakima County SIED Program Yakima County SIED Board Supporting Investments In Economic Diversification II / A. REQUEST FOR FUNDING Al. Indicate the full terms requested for SIED consideration. A SIED loan is a general obligation of the jurisdiction receiving the loan. With acceptance of a SIED loan, the jurisdiction agrees to the terms of the interlocal agreement regardless of the project which prompted the application for SLED funding. • A loan of: $ 214,000 • A grant of $ (maximum 40% of project costs *). 214,000 • A deferral of the first loan payment (up to five years): 1 near • Loan terms requested: *Total number of years for repayment: _5 years • Justify a request for a deferral of the first loan payment. What is the basis for a lower interest rate request? • The City needs a one year deferral to ensure that the private facility is constructed, operational, and triggering local property tax payments B. PUBLIC SECTOR PROJECT B1. Describe the entire public facility project, including the parts that you are not asking SIED to fund. The project involves constructing approximately 870 linear feet of roadway to industrial standard. Sidewalks, curb and gutters and lighting will also be built on both sides of this roadway. Water and sewer utilities will also be extended to parallel road improvements. B2. Will this project upgrade an existing public facility? Build a new one ?. Describe. This project will build a new street (23 Avenue) off of Ahtanum Road and extend Oak Street so it provides a full loop within the business park. Water and wastewater utilities will also be extended from the cities existing lines near Ahtanum Road. • Application for Funding, 1998 Page 3 Yakima County S1ED Program • Yakima County SIED Board Supporting Investments In Economic Diversification IP B3. List all funding sources for the public project and amount. SOURCE STATUS DATE AMOUNT SIED fund application submitted March 2008 $428,000 B4. Specifically, for what element(s) of the public project are SIED funds requested? Construct roadway improvements and sidewalk, curb and gutter. B5. Include a site map of the area. Identify the location of the site, public infrastructure and private development project (existing and /or proposed). Specifically identify where SIED funds are proposed to be used. B6. Attach engineering estimates supporting project costs. Identify whether estimates are from preliminary engineering or design engineering work. (Attention: SIED will not entertain requests for additional funding if projections are insufficient.) B7. Describe how the public facility project will enhance or encourage other development in the immediate area in addition to the direct development described in this application (Section D.) McAllister Field Business Park is an industrial park located on Ahtanum Road on the south side of the Yakima Airport between 20th Avenue and 26th Avenue. The Park is approximately 44.5 acres in size. The subdivision of the Park is complete and development has been occurring although additional vacant lots remain, awaiting public infrastructure to be marketable. This area is primed to build out as our economy sustains a heightened activity level. Key to the success of maximizing the economic benefits of the positive growth cycle is a concerted effort to attract new construction to fill in these existing available sites with job creating commercial and industrial development. Italstone is a great example of the new development we are seeking. Italstone is an importer and precision fabricator of custom stone finish materials. They plan to hire approximately twenty -three "career- oriented" employees within the first three years in Yakima. However, as a condition to open their Yakima facility, the City requires road and infrastructure improvements as proposed. B8. List all permits and environmental reviews required for the PUBLIC SECTOR PROJECT and give their current status (applied for, application being prepared, permit issued, etc.) ANTICIPATED COMPLETION PERMIT ISSUER STATUS DATE SEPA City of Yakima exempt B9. If environmental permits are not required for the project (e.g., Shorelines Permit, Environmental Impact Statement, etc.), Project was designed and approved in 1999. All reviews were completed at that time. Work can proceed at developer's initiative. B10. Estimated schedule for public project completion. Indicate the month and year when the activities listed have been, or will be, completed. ESTIMATED COMPLETION DATE Preliminary Engineering Report Complete Environmental Review NA Application for Funding, 1998 Page 4 Yakima County SIED Program Yakima County SIED Board Supporting Investments In Economic Diversification • All Required Permits Obtained NA Design Engineering April 2008 Land /Right -of -Way Acquisition Complete Prepare Bid Documents April 2008 Award Construction Contract May 2008 Begin Construction . June 2008 Project Operational July 2008 B11. What other jurisdictions, such as counties, cities, port districts, tribes, state /federal agencies are involved in the planning, design, financing, construction or operation of this project? Yakima Air Terminal Please explain how completion of the project is coordinated between other involved parties. B12. Will the SIED public facility project be totally maintained by the applicant? If not, whom? Please explain. Yes O B13. How will this project impact utility rates and public services within the jurisdiction? Insignificant impact. B14. Is this project consistent with your local comprehensive and capital facilities plans? If no, please explain. Yes • Application for Funding, 1998 Page 5 Yakima County SLED Program Yakima County SIED Board Supporting Investments In Economic Diversification C. FINANCIAL INFORMATION ON CITIES, TOWNS, PORT DISTRICTS Al110 COUNTIES This section examines the general financial status of cities, towns, and counties to determine the need for SIED assistance. C1. Identify funds (General Fund, Utility Fund, Property taxes, etc.) that are eligible to repay a SIED loan. C2. In the context of the local government's overall annual budget, explain the need for SIED assistance. If the applicant has budget reserves, please explain why these funds are not available for the project? The City of Yakima has been forced in recent years to dip into reserves just to balance the General Fund budget, and those reserves are now at critically low levels. The road and streets capital budget has also taken on a number of initiatives in recent years that stretch our financial capacity, making this type of investment cost prohibitive without external funding sources. C3. If the local jurisdiction is not financially contributing to the project, please explain why. See C2 above. Developer has agreed to accept financial responsibility for the project to stimulate economic development activity in this area. C4. Has the use of revenue or general obligation bonds, LID, ULIDS been explored for this public facility project? Yes X No_. Explain the outcome and describe why these financing sources would or would not be applica for this project. See C2 and C3 above. Also, the size of the project and the undeveloped land along the propos improvements undermines the potential for an LID, ULID or municipal bonding. C5. Will a revenue stream be generated that could repay a SIED loan outside of the system's normal operations and maintenance costs? Yes_ No X. Please explain. Private project will generate a very small revenue stream from sales tax and property tax, but an insufficient amount to repay debt service net of the cost of services provided to the site (i.e. police, fire, public works, etc.). • Application for Funding, 1998 Page 6 Yakima County SLED Program • Yakima County SIED Board Supporting Investments In Economic Diversification 41)C6. Other public sources of funding for public economic development projects are listed below. Indicate which public sources were investigated to fund this project, in addition to SIED. Indicate what the outcome was. YES NO OUTCOME FEDERAL: Economic Development Administration _ _X_ Not eligible Rural Development _ _X_ Not eligible T21 (ISTEA) _ _X Not eligible Other: X STATE: Transportation Improvement Board _ _ Not eligible Community Development Block Grant _ _X_ Not eligible Public Works Trust Fund • _ _ Not eligible Department of Ecology _X_ Not eligible CERB _ _X_ Not eligible • RTPO/MPO _ _X_ Not eligible • WSDOT _ _ X _ Not eligible 4110 Explain why SIED funds are necessary and the outcome of the investigation of other fund sources: Based upon the small size of the project and the short timeline to assist and leverage private investment, the above funding sources for this project would not be eligible for the above funding sources. Community Development Block Grants are invested by the City of Yakima in the City's Renewal Community Area. The Airport does not qualify for this designation. • III _N. Application for Funding, 1998 Page 7 Yakima County SIED Program Yakima County SIED Board Supporting Investments In Economic Diversification D. PRIVATE SECTOR COMMITMENT • D1. In order to show that a specific private investment is ready to occur, but will do so only if SIED assistance is made available to the applicant, SIED requires a signed Contingency Agreement(s) between the applicant and the private sector representative(s). If a developer is involved, there must also be a signed Contingency Agreement between the developer and the proposed tenant. D2. Describe the proposed private development or expansion project that will be supported by the public facility project. Itaistone is going to build a new manufacturing facility near 23 avenue and Ahtanum Road. The company is headquartered in Hood River, Oregon and this expansion allows the company to increase sales and better serve the Washington State market for their custom marble and granite countertops, floors, and interior furnishings. D3. Name of private sector firm: Itaistone US Address: 3399 Guignard Rd. Hood River, OR 97031 Phone /Fax: 541 - 387 -2691 Contact Person: Gjino Ilias D4. Explain why the private development requires the proposed public infrastructure improvements described in this application. The street, water, and sewer improvements must be completed for the business to obtain an • occupancy permit. • • • Application for Funding, 1998 Page 8 Yakima County SLED Program Yakima County SIED Board Supporting Investments In Economic Diversification D5. List the number of protected jobs, by job type, to be retained and /or created by the firm as a direct result of the public infrastructure project supporting the private development. Jobs must be expressed in Full Time Equivalents (FTEs). Wage data should exclude fringe benefits. • *Management positions should be indicated as an annual salary. Current# Of # Of Jobs # Of Jobs Jobs Retained ** Created Year 1 Created by Year Current or initial Job Description (In FTEs) (In FTEs) 3 (In FTEs) Hourly Wages Mgmt. /Admin* 3 $20 Technical /Prof. 2 $16 Office /Clerical 2 $16 Production 8 8 $18 Sales Skilled Crafts Others • a) Number of Jobs * *Retained _O b) Projected annual gross payroll for all job classifications $500,000 by end of first year c) How many of these positions are for seasonal work? (In FTE) 0 d) What kind of fringe benefits does the company offer to regular full time employees? Medical Insurance, Vacation, and sick time. D6. Will this project displace existing jobs in any other part of the county? No D7. How were job projections developed? Explain why the projections are realistic. Jobs projections are based on operations of a similar facility in Hood River, Oregon ill Application for Funding, 1998 Page 9 Yakima County SLED Program Yakima County SIED Board Supporting Investments In Economic Diversification D8. Will the private sector project offer expanded employment opportunities to disadvantaged or unemplo• workers? How will the firm work to hire people from Yakima County? The company wants to attract its workforce from the local labor market. The company will post jobs at the local WorkSource office and work with community based organizations to see how disadvantaged or unemployed workers meet their skill requirements. D9. Indicate the construction schedule (if applicable) for the proposed private sector project. (month /year) Private Facility Construction Begins April 2008 Private Facility Construction Completed July 2008 Private Facility Operational August 2008 D10. List all permits required for the PRIVATE SECTOR PROJECT and give their current status (applied for, application being prepared, permit issued, etc.) All permits were secured by the contractor. ANTICIPATED PERMIT /ENVIROMENTAL COMPLETION REVIEW ISSUER STATUS DATE Building permits City of Yakima submitted April 2008 III NOTE: ALL REQUIRED PERMITS TO COMPLETE THE PROJECT �MUST,BE SECU_ -RED WITHIN SIX MONTHS OF A SIED OFFER OF FINANCIAL AID D11. What private authorizations remain prior to proceeding with the proposed private development project? None D12. Explain how the private sector is financing their capital investment in this project. When will private sector financing be in place? Please list financial references that can verify financing sources and capacity for this project. A combination of private equity and an SBA loan from Columbia River Bank (Hood River branch) • Application for Funding, 1998 Page 10 Yakima County SIED Program