HomeMy WebLinkAbout2010 CON City of San Diego / Chula Vista / Port District - Enterprise ZoneMEMORANDUM OF UNDERSTANDING
FOR OPERATION OF THE
SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
THIS MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO
REGIONAL ENTERPRISE ZONE PROGRAM ("OPERATING MOU") is made by and
between THE CITY OF SAN DIEGO, a California municipal corporation ("SAN DIEGO"), the
CITY OF CHULA VISTA, a California municipal corporation ("CHULA VISTA"), the CITY
OF NATIONAL CITY, a California municipal corporation ("NATIONAL CITY"), and the SAN
DIEGO UNIFIED PORT DISTRICT ("DISTRICT"), (each of whom may be referred to
individually as a "PARTNER," and collectively as the "PARTNERSHIP" or "PARTNERS") to
be effective as of July 1, 2007 (the "Effective Date") when signed by the PARTNERS and
approved by their respective City Attorneys and Attorney for the District, as follows:
RECITALS
WHEREAS, on August 31, 2006, SAN DIEGO, CHULA VISTA and NATIONAL CITY
executed a First Memorandum of Understanding ("2006 MOU") for purposes of identifying the
original partnership (which at that point did not include the DISTRICT), setting forth the original
partnership's intended goals, and allocating financial responsibility for consulting services
necessary only for the submittal of the application to the California Housing and Community
Development Department ("HCD") for designation of the San Diego Regional Enterprise Zone
("SDREZ"); and
WHEREAS, in the 2006 MOU the original partners agreed that upon conditional
approval of the SDREZ they would negotiate a second memorandum of understanding, setting
forth each original partner's specific areas of responsibility and financial obligation from that
point forward for the duration of the SDREZ; and
WHEREAS, the California ("State") State Legislature established enterprise zones for the
purpose of creating jobs and stimulating private investment in economically distressed areas or
jurisdictions; and
WHEREAS, SAN DIEGO's City Planning & Community Investment Department had
administrative and reporting responsibilities to HCD for two prior California enterprise zones
(namely, the Metro Enterprise Zone and the South Bay Enterprise Zone), and has 20 years of
technical experience with the enterprise zone program, including a successful Enterprise Zone
Job Referral/Placement Service involving issuance of over 25,000 hiring vouchers to enterprise
zone companies through a collaboration with the California Employment Development
Department, the Metro Career Center, the South County Career Center, the South Metro Career
Center, the San Diego Workforce Partnership, and various other job placement agencies;
consequently, SAN DIEGO has the collaborative capacity to seek Regional Enterprise Zone
designation; and
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
WHEREAS, since 2000, SAN DIEGO has had a partnership with NATIONAL CITY and
CHULA VISTA to enhance job creation and private investment in the region resulting in
regional economic development programs such as the South Bay Enterprise Zone, and the San
Diego Regional Revolving Loan Fund; and
WHEREAS, the PARTNERSHIP would like to further expand opportunities for regional
economic development collaboration including waterfront based Port tenants; and
WHEREAS, the SDREZ consists of a regional, multi jurisdictional partnership that
contains within its boundaries a variety of industry types (e.g., light industrial/manufacturing,
Mexican cross border assembly plants, retail/entertainment, commercial, research and
development, and maritime industries), as well as other small businesses eligible for enterprise
zone business incentives; and
WHEREAS, on November 3, 2006, HCD awarded conditional SDREZ designation, and
in a January 17, 2007, letter (the "HCD Letter," attached hereto as Attachment A), set forth
conditions to be satisfied prior to the final SDREZ designation; and
WHEREAS, on September 10, 2008, San Diego accepted the certified Environmental
Impact Report and authorized the submittal of an application to HCD to establish a Targeted
Employment Area ("TEA") and on November 19, 2008, approved the submittal of an
amendment to the SDREZ application expanding the boundaries of the SDREZ to be included in
the final SDREZ designation; and
WHEREAS, on March 24, 2009, Chula Vista accepted the certified Environmental
Impact Report and approved the submittal of an amendment to the SDREZ application
expanding the boundaries of the SDREZ to be included in the final SDREZ designation; and
WHEREAS, on April 21, 2009, the City of National City accepted the certified
Environmental Impact Report for the San Diego Regional Enterprise Zone Program and on July
21, 2009 approved the submittal of an amendment to the SDREZ application expanding the
boundaries of the SDREZ to be included in the final SDREZ designation and accepted the
revised TEA (approved on July 1, 2008);
WHEREAS, SAN DIEGO currently has an approved Targeted Employment Area
("TEA") incorporating eligible low and moderate income 1990 Census Tracts within San Diego
and Chula Vista as designated areas approved by HCD to encourage enterprise zone businesses
to hire TEA residents and, therefore. receive State tax credits on wages paid to these employees;
and
WHEREAS, upon HCD approval and final designation of the SDREZ, the
PARTNERSHIP shall make application for a new TEA that is geographically consistent with the
State TEA eligibility criteria so as to maximize job creation opportunities for SDREZ businesses
that hire TEA residents so they can receive State tax credits on wages paid to those employees;
and
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
WHEREAS, the PARTNERSHIP supports regional economic development that benefits
all citizens and businesses of the SDREZ;
NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the
sufficiency of which is hereby acknowledged, the PARTNERS agree as follows:
Section 1: Regional Enterprise Zone Collaboration.
Upon an invitation from HCD, the PARTNERSIIIP submitted an application for a new
SDREZ to the State by the application deadline of September 6, 2006. On November 20, 2006,
HCD approved a "conditional" designation, which pursuant to State legislation (AB 1550)
allows for the availability of enterprise zone incentives within the SDREZ as of the October 15,
2006, designation date.
The PARTNERS shall work together in good faith to complete all conditions set forth by
HCD in the HCD Letter to obtain final approval and designation for the SDREZ. Each
PARTNER shall deliver such further documents and take such further action as may be
reasonably necessary to obtain final designation from HCD for the SDREZ. The PARTNERS
shall continue working together in good faith after approval and final designation of the SDREZ,
and shall continue their mutual collaboration for the life of the SDREZ as set forth in this
OPERATING MOU.
Contingent upon final approval and designation by HCD, the SDREZ shall contain
acreage by jurisdiction as set forth at the time HCD awards final designation. In accordance
with California Government Code section 7074, expansion capacity for the SDREZ is 15% of
the original area at the time of final designation. Expansions shall be in accordance with Section
8 of this OPERATING MOU.
Section 2: Compliance with Laws and Regulations.
PARTNERSHIP represents and warrants, unless otherwise noted, it has trained and
experienced personnel capable, qualified, and authorized to undertake the activities described in:
(1) the application submitted to HCD for SDREZ designation (the "SDREZ Application"), (2)
the conditions set forth by HCD in the HCD Letter; and (3) all the activities and conditions
subscribed to it in this OPERATING MOU. Each PARTNER shall comply with all applicable
State, federal and local laws and regulations.
Section 3: PARTNERSHIP Responsibilities.
The PARTNERS shall collaborate to comply with HCD's administrative, programmatic
and reporting requirements for the SDREZ, and agree the following are general actions to be
taken to implement and administer the SDREZ:
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
PARTNERS:
1) Each PARTNER, except the DISTRICT, shall request from its respective governing body
a resolution authorizing acceptance of final designation for the SDREZ from HCD and
confirming its commitment to obtaining final designation for the SDREZ, as well as its
adherence to HCD administrative, programmatic and reporting requirements.
Notwithstanding the above, the DISTRICT acknowledges it has received a copy of the
SDREZ Application and understands the purpose and intent of the State Enterprise Zone
program.
Each PARTNER's Mayor/Manager/Chief Executive Officer or designee, as applicable,
shall ensure compliance with HCD's requirement to effectively staff its local SDREZ
office for purposes of local program continuity as set forth in the SDREZ Application.
3) Each PARTNER's Mayor/Manager/Chief Executive Officer or designee, as applicable,
shall ensure compliance with HCD requirements to establish and work to meet
"benchmarks," "performance measures," and program goals as set forth in the SDREZ
Application and in the State Memorandum of Understanding.
4) Each PARTNER's Mayor/Manager/Chief Executive Officer or designee, as applicable,
shall ensure compliance with HCD's requirement of a "unified, coherent marketing
strategy," which promotes the SDREZ as "One Zone" containing regional partners,
consistent with the SDREZ Marketing Plan as set forth in the SDREZ Application.
5) Within their respective jurisdictions, each PARTNER shall market the benefits of the
SDREZ to existing and prospective businesses to attract and retain businesses and jobs in
the SDREZ.
6) Each PARTNER's Mayor/Manager/Chief Executive Officer or designee, as applicable,
shall ensure compliance with HCD requirements to maintain accurate boundary -area
street address ranges, and to perform periodic "self -assessments" and reporting
commitments as set forth in the SDREZ Application.
7) The PARTNERSHIP shall conduct economic development activities for the SDREZ in
mutual cooperation and coordination with all PARTNERS to encourage the development
of new businesses, including attracting and assisting businesses with location decisions.
8) Within their respective jurisdictions, each PARTNER shall provide timely staff support
to serve existing and new businesses in the SDREZ.
Each PARTNER, where applicable, shall maintain and continue to provide to the other
PARTNERS currently -updated, relevant data respective to their jurisdictions of the
following: (a) land use laws, regulations and policies; (b) infrastructure upgrades and
planning; (c) zoning regulations within the SDREZ, where applicable; (d) fee
structure(s); and (e) any other jurisdictional actions affecting the SDREZ. Each
PARTNER shall notify SAN DIEGO. as the lead agency, in writing, of regulatory and
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF TIIE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
policy changes that may impact that PARTNER's ability to assist existing or new
businesses located or locating in the SDREZ or affect the PARTNERSHIP's ability to
carry out one or more of the obligations set forth in a memorandum of understanding
with HCD.
10) Within their respective jurisdictions, each PARTNER shall encourage its elected or
appointed officials to engage in active support of business development and job creation
within the SDREZ.
11) Within their respective jurisdictions, each PARTNER shall facilitate access and provide
assistance to SDREZ businesses with permit, infrastructure, expansion, and general
business issues as they relate to the operation and benefits of the SDREZ.
12) The PARTNERS shall gather pertinent low and moderate income census tract
information to establish the SDREZ TEA in accordance with Section 7 of this
OPERATING MOU.
13) The PARTNERS agree to work collaboratively on business retention, expansion and
attraction efforts in the following manner. SDREZ PARTNERSHIP staff will
immediately communicate with PARTNERS when staff is aware of an SDREZ company
that is considering relocating from one SDREZ location to a PARTNER's jurisdiction.
When this occurs, staff shall notify via telephone, email or at the next scheduled SDREZ
Team meeting of the imminent situation. The SDREZ PARTNERSHIP agrees to
prioritize business retention/expansion efforts for existing SDREZ companies in the
following manner:
Priority 1: Retain companies within the current SDREZ jurisdiction;
Priority 2: If it is not possible for the company to remain within the jurisdictional
boundaries of its existing location, the PARTNERSHIP shall collaborate to
retain the company within the SDREZ boundaries; and
Priority 3:
When neither of the aforementioned priorities are an option, the SDREZ
PARTNERSHIP shall notify other San Diego region jurisdictions and
economic development organizations in order to provide site selection
assistance to retain the company in the County of San Diego.
14) Provided that all Enterprise Zone Act requirements are met, each PARTNER shall submit
requests to its governing body within sixty (60) days after submission for review of all
amendments and updates to the SDREZ and TEA and shall take prompt action via
resolution. A PARTNER having reasonable concerns must identify and substantiate the
concerns in writing within thirty (30) days after submission for review to each
PARTNER. Expansions to zone boundaries shall comply with Section 8 of this
Operating MOU.
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
SAN DIEGO:
1) SAN DIEGO shall be lead agency in the administration of the SDREZ, and will
coordinate all aspects of the SDREZ with regular input from the PARTNERS.
2) SAN DIEGO, as the lead agency of the PARTNERSHIP, will negotiate a Memorandum
of Understanding on behalf of the PARTNERSHIP with HCD for the final SDREZ
designation.
3) SAN DIEGO will coordinate business attractions and local business outreach programs
with all PARTNERS to include objectives, deliverables, and expected outcomes with
quarterly progress reports concerning SDREZ activities.
4) SAN DIEGO will coordinate and provide current reports relative to the progress of
implementing the SDREZ, and will monitor various levels of benefits as generated by the
businesses located in the SDREZ.
5) SAN DIEGO will act as the Vouchering Agency for the SDREZ and will provide direct
staff assistance in the vouchering of all eligible new hires as submitted by businesses
located within the SDREZ, including full documentation for verification of eligibility.
6) SAN DIEGO will assist SDREZ businesses with screening, job placement, and hiring
credit eligibility screening so that individuals can be certified as "qualified employees"
for vouchering purposes.
7) SAN DIEGO staff will coordinate and provide technical assistance to the
PARTNERSHIP in preparing required documentation for the TEA, and final SDREZ
designation.
8) SAN DIEGO staff, in collaboration with the PARTNERSHIP, will submit all pertinent
documentation to the HCD for final SDREZ designation.
9) SAN DIEGO, as lead agency, will initiate and submit a request to HCD to establish a
TEA to include low and moderate income census tracts in the SDREZ in accordance with
state requirements.
Section 4: Term
This OPERATING MOU shall be effective as of the SDREZ Designation Date and shall
expire October 14, 2021. The PARTNERS acknowledge that the State designation for the
SDREZ is a 15-year tern and is set to expire October 14, 2021. The PARTNERS therefore
agree to the term of this OPERATING MOU. This OPERATING MOU is contingent upon
the approval of funding contributions to the SDREZ program by the governing boards of
all of the PARTNERS.
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
Prior to the expiration of this OPERATING MOU, the PARTNERS shall decide whether
to continue to issue SDREZ hiring tax credit vouchers to SDREZ companies and shall develop a
plan for how SDREZ businesses shall receive this service. Current California law permits the
issuance of hiring tax credit vouchers retroactively and allows businesses to amend tax returns in
order to claim earned tax credits not previously claimed. For this reason, hiring tax credit
vouchers may be issued for several years after the expiration of the SDREZ.
Section 5: Renegotiation
Any PARTNER may make a written request to the other PARTNERS to renegotiate the
terms of this OPERATING MOU. Upon such request, the PARTNERS shall participate in good
faith negotiations regarding the terms of this OPERATING MOU. All changes, modifications or
amendments to this OPERATING MOU must be in writing, must comply with all then -current
laws, regulations and policies, and must be signed by all PARTNERS.
Section 6: Zone Administration
As grantee of the SDREZ designation, SAN DIEGO will continue to assume lead -agency
responsibility for the administration of the SDREZ, which includes without limitation
coordinating collection of program data, the submittal of reports to HCD, overseeing the
employee certification and vouchering process, and administering the job placement/referral
service. The PARTNERSHIP will collaborate on the following:
1) Implementing goals and objectives for the SDREZ as set forth in the SDREZ
Application.
Developing and implementing a marketing plan for the SDREZ as set forth in the
Marketing Plan in the SDREZ Application, including without limitation workshops,
direct mailings, press releases, marketing materials, trade shows and business outreach.
The "OneZone" marketing program will be developed and administered cohesively with
the marketing programs of the individual agencies as well as with local and regional
economic development organizations.
3) PARTNERSHIP representatives shall meet monthly to discuss such issues as policy
changes affecting this OPERATING MOU, existing and new work plans, and the
progress and tracking of the SDREZ program, including without limitation economic
development, job creation/placement, marketing and performance goals and objectives,
joint administrative issues, and annual reporting requirements as set forth in the SDREZ
Application.
4) Establishing an advisory (working group) committee from regional economic
development organizations to consult and advise on implementation of the SDREZ as set
forth in the SDREZ Application, including but not limited to marketing of the SDREZ as
"OneZone."
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
5) Providing current and relevant data, as it relates to the PARTNERS' respective
jurisdictions, related to changes in land -use laws, regulations or policies, infrastructure
upgrades and planning, zoning within the SDREZ, fee structure(s), and any other
jurisdictional actions that could impact the ability to assist existing or new businesses
located or locating in the SDREZ.
6) Conducting SDREZ business attraction activities, and responding to SDREZ site
selection requests from economic development organizations and/or businesses whenever
possible, as set forth in the SDREZ Application.
The PARTNERS further agree all SDREZ promotional materials for distribution to the
public, businesses and economic development organizations shall include information that
reflects the multi jurisdictional, regional make-up of the SDREZ, yet continues to promote a
"OneZone" marketing approach, and these materials shall be reviewed and mutually agreed to by
designated PARTNER representatives at the outset, and whenever such materials require
updating.
The PARTNERS shall collect and maintain their respective pertinent data as required by
HCD for annual reports and State audits, and as required by their respective Mayors, City
Councils/Commission, City Managers, and/or Chief Executive Officers. Such information
includes without limitation:
I) A list of existing businesses within the SDREZ.
2) A list of new businesses locating into the SDREZ.
3) The number of companies receiving vouchers.
4) The number of vouchers issued.
5) The number of jobs created and/or retained within the SDREZ.
6) The number of commercial/industrial/residential building permits issued and valuation of
structures for which building permits were issued.
7) The value and nature of incentives provided to companies within the SDREZ.
8) The number of business inquiries requesting information on SDREZ incentives.
Each PARTNER shall have an assigned employee responsible for responding to inquiries
concerning the SDREZ program benefits, collecting and updating data for reporting purposes,
and for additional support to the SDREZ program as reasonably required. These assigned
positions shall be the SDREZ Manager for SAN DIEGO, the Business Assistance Manager for
CHULA VISTA, and the Business Assistance Manager for NATIONAL CITY, all as set forth in
the SDREZ Application. The DISTRICT shall assign an employee from a department it deems
appropriate to work with the other PARTNERS' representatives as provided in this
OPERATING MOU.
SAN DIEGO shall also have a designated employee responsible to support SDREZ
businesses with employee hiring credit application certification and vouchering in a manner
consistent with the "Vouchering Plan" set forth in the SDREZ Application.
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF TIIE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
Section 7: Targeted Employment Area
The PARTNERSHIP shall establish and update its TEA in accordance with California
Government Code section 7072 (i)(1) of the Enterprise Zone Act. SAN DIEGO, as the lead
agency, shall identify eligible census tracts. Upon concurrence of the PARTNERSHIP, the
PARTNERS, with the exception of the DISTRICT, shall approve by resolution the boundaries of
the TEA.
Section 8: Program Expansions
All SDREZ expansions shall be in accordance with California Government Code section
7074 of the Enterprise Zone Act. Each PARTNER shall have the ability to expand its acreage up
to 15%, up to a total increase to the SDREZ acreage of 15%, as allowed by the Enterprise Zone
Act. Each PARTNER may work with other PARTNERS in providing support for expansions in
their respective jurisdictions, including allowing a PARTNER to reduce its expansion capacity to
allow another PARTNER to increase their expansion capacity.
Prior to any request or application to HCD for SDREZ expansion, each PARTNER shall
have the opportunity to review the expansion request. Provided the requirements for expansions
as outlined in the Enterprise Zone Act are met, each PARTNER shall submit the expansion
request to its governing body within sixty (60) days after submission for review, and shall take
prompt action via resolution on whether findings for an expansion are met as stipulated in the
Enterprise Zone Act. A PARTNER having reasonable overriding concerns must identify and
substantiate a substantial negative regional economic impact for not supporting the requested
expansion. Expansion requests shall not be submitted to 1-ICD unless and until each
PARTNER'S governing body has adopted a resolution approving the expansion.
The expansion capacity for each PARTNER may not exceed 15% of its designated
SDREZ area as determined at the time of final designation. If at any time during the designation
period of the SDREZ, a PARTNER is incapable of utilizing its entire expansion capacity, or has
declared itself unwilling to utilize its entire expansion capacity, then the remaining balance of
that PARTNER'S expansion capacity shall be available for expansions by the remaining
PARTNERS. To fully utilize the entire SDREZ expansion capacity prior to zone expiration, the
remaining expansion capacity acreage for the SDREZ shall be recalculated after the fifth year
(i.e., in 2011) and the tenth year (i.e., in 2016). To the extent each PARTNER is able and willing
to utilize the remaining expansion capacity of the SDREZ, each such PARTNER shall receive an
equal share of the expansion capacity; however, if applying such expansion capacity will result
in a PARTNER'S acreage exceeding the area for its original capacity at the time of final
designation, then the excess acreage shall be divided equally among the remaining PARTNERS.
Any amendments to the SDREZ expansion capacity shall require an amendment of this
OPERATING MOU, signed by all the PARTNERS. The PARTNERS shall work together and
act in good faith after approval and final designation of the SDREZ in the best interests of the
zone.
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
Section 9: Compensation and Resources
In consideration of SAN DIEGO's lead agency position and agreement to administer the
SDREZ Program, to coordinate workforce development services for businesses located in the
SDREZ, to submit quarterly voucher reports, and other SDREZ program related services and
reports as stipulated in Sections 3 and 6, the PARTNERS shall be responsible for compensation
of an annualized amount of program funding to SAN DIEGO to provide additional
administrative support for the SDREZ for Fiscal Years 2008-2022 in the amounts identified in
Attachment B attached hereto (i.e., the "San Diego Regional Enterprise Zone Program Budget
and Partnership Contributions Fiscal Years 2008-2012," referred to herein as the "Administrative
Budget").
Each PARTNER is committed to the SDREZ program for the term of this OPERATING
MOU. However, the PARTNERS agree to budget only through Fiscal Year 2012, and shall
review and update each PARTNER's monetary commitment in Fiscal Year 2011, and from time
to time on an as -needed basis thereafter. Fiscal responsibility for the SDREZ after Fiscal Year
2012 shall be assumed by the cities of Chula Vista, National City and San Diego unless the
Operating MOU is amended.
Program Administration will include without limitation those activities in support of the
Enterprise Zone Program provided by SAN DIEGO for the entire SDREZ Program. SAN
DIEGO staff shall provide administrative support for the program which includes coordinating
and submitting all annual reports to HCD, responding to inquiries from the PARTNERS,
assisting with hiring credit certification and vouchering, assisting with other related workforce
development services and maintaining all hiring credit records for the PARTNERSHIP.
Administration, data collection, systematic record keeping, and reporting requirements include
without limitation: (a) hiring credit vouchers issued; (b) wages paid; (c) employers receiving
vouchers; (d) area resident placements (including TEA residents); (e) collecting fees; (f) issuing
fee invoices; (g) complying with State reporting requirements; and (h) coordinating
programmatic marketing efforts.
SAN DIEGO shall invoice each PARTNER for Administrative Budget obligations on an
annual basis for FY 2007/08 to FY 2008/09 and on a quarterly basis going forward. The
PARTNERSHIP shall reimburse the aforementioned annualized amount of program funding to
SAN DIEGO. Payment is due to SAN DIEGO within forty-five (45) days from the date of the
invoice. Each PARTNER in the PARTNERSHIP shall track its own marketing expenditures
annually and submit a report itemizing its marketing expenditures to SAN DIEGO at the end of
each Fiscal Year for monitoring and reporting purposes only.
Invoices shall be mailed as follows:
For CHULA VISTA;
The City of Chula Vista
Economic Development Division
ATTN: Small Business Services Coordinator
276 Fourth Avenue, Chula Vista, CA 91910
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
For NATIONAL CITY;
The City of National City
Community Development Commission of National City
ATTN: Community Development Coordinator
1243 National City Blvd
National City, CA 91950
For DISTRICT;
San Diego Unified Port District
ATTN: Real Estate Department
3165 Pacific Highway
San Diego, Ca 92101-1128
The PARTNERSHIP shall reimburse the annualized amount of program funding to SAN DIEGO
through Fiscal Year 2022 as set forth in Attachment B and in accordance with this section_
Attachment B provides the annualized amount of program funding for the first five (5) years of
this OPERATING MOU.
Payments shall be made payable to City Treasurer and mailed to:
City of San Diego
Office of the Mayor, Economic Growth Services
ATTN: Government Incentives Team Program Manager
202 C Street, MS 4A
San Diego, CA 92101
The compensation and budget may be adjusted up only by no more than 5% per year and
such adjustment must be approved in writing by the respective program administrators for the
PARTNERSHIP. The PARTNERSHIP may renegotiate this OPERATING MOU in accordance
with Section 5. Additional adjustments and amendments can be made to this OPERATING
MOU and must be approved in writing by all the PARTNERS. Non -fiscal adjustments to the
SDREZ program and/or program administration may be approved administratively by
concurrence of the SDREZ program administrators.
In 2004, the State approved legislation mandating that every EZ remit $10 for each EZ
Hiring Tax Credit application reviewed to offset HCD program costs associated with the
statewide administration of the EZ program. In order to comply with the State mandate, SAN
DIEGO, as the SDREZ lead agency and vouchering agent, must collect and remit a $10 fee for
each EZ Hiring Tax Credit application received on a monthly basis.
Local jurisdictions may charge an additional application fee to help offset the local cost
of effectively administering E Z program. The initial EZ Hiring Tax Credit application fee as
approved by San Diego City Council Ordinance (R-300214) is $50 per application. The fee
recovers some of SAN DIEGO's EZ administrative expenses including those associated with
collecting and processing the State's $10 fee.
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
SAN DIEGO's EZ staff has been challenged to find sufficient revenue to fully cover
costs associated with the administration of the SDREZ program in addition to the contributions
by the PARTNERS as referenced in this section. In order to fully staff the SDREZ program, and
effectively and efficiently administer the SDREZ program, the application fee may be increased
in accordance with applicable local and state requirements. The revenue generated by the
application fee shall be used solely to cover administrative costs directly associated with the EZ
program, including without limitation, personnel and non -personnel expenses, i.e. EZ software,
marketing, etc. Should the application fee generate sufficient revenue to cover the lead agency's
EZ administrative costs, the PARTNERSHIP shall define the most equitable manner in which to
distribute such revenue in order to reduce impacts to the PARTNERSHIP's general fund
supporting the SDREZ program. Any such amendments shall be in accordance with Section 5 of
this OPERATING MOU.
If State legislation is approved to allow for extensions, and an extension is awarded to the
SDREZ, this OPERATING MOU shall be renegotiated in the manner stipulated in Section 5.
Section 10: Hold Harmless
Each PARTNER ("Indemnifying PARTNER") shall protect, defend, indemnify and hold
each of the other PARTNERS and their elected officials, officers, representatives, agents and
employees harmless from and against any and all claims asserted, and liability for damages or
injuries to any person or property, including without limitation injury to the Indemnifying
PARTNER's elected officials, officers, representatives, agents and employees, which arise out of
or are in any manner directly or indirectly connected with this OPERATING MOU or the
Indemnifying PARTNER's performance hereunder, and all expenses of investigating and
defending against same; provided, however, that the Indemnifying PARTNER's duty to
indemnify and hold harmless shall not include any claims or liability arising from the established
active negligence, sole negligence, or sole willful misconduct of another PARTNER. its elected
officials, officers, representatives, agents and employees.
Section 1: Superseding Memorandum of Understanding
This OPERATING MOU supersedes only the 2006 MOU.
Section 12: General Provisions
1) Program Administrators. For purposes of this OPERATING MOU, the initial
program administrators shall be:
a. For SAN DIEGO: Lydia Moreno, Government Incentives Team Manager
b. For CHULA VISTA: Lynette Jones, Small Business Services Coordinator;
c. For NATIONAL CITY: Alfredo Ybarra, Community Development
Coordinator; and
d. For DISTRICT: William Winchell, Real Estate Manager
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MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
2) Recitals. All Recitals herein are true and correct to the PARTNERS' best
knowledge and belief, and are fully incorporated into this OPERATING MOU.
3) Exhibits. All Exhibits to this OPERATING MOU are incorporated herein.
4) Assignment. This OPERATING MOU may not be assigned by any PARTNER.
5) Entire Understanding. This OPERATING MOU is the sole and entire
understanding between the PARTNERS relating to the subject matter hereof. In
signing this OPERATING MOU, each PARTNER agrees there is no other written
or verbal understanding between the PARTNERS with respect to the subject matter
of this OPERATING MOU. Except as otherwise provided herein, any modification
to this OPERATING MOU must be in writing and signed by all the PARTNERS.
6) Drafting Ambiguities. Each PARTNER acknowledges and agrees it has the
opportunity to be advised by counsel with respect to the negotiation of the terms,
covenants and conditions of this OPERATING MOU, and the decision to seek or
not seek advice of counsel with respect to this OPERATING MOU was a decision
made solely by each PARTNER. This OPERATING MOU shall not be construed
in favor of or against any PARTNER by reason of the extent to which the
PARTNER participated in the drafting of this OPERATING MOU.
7) Governing Law. This OPERATING MOU shall be governed, construed, and
enforced in accordance with the laws of the State of California.
8) Time is of Essence; Provisions Binding on Successors. Time is of the essence of
each term, covenant and condition of this OPERATING MOU. Except as
otherwise provided in this OPERATING MOU, all of the terms, covenants and
conditions of this OPERATING MOU shall apply to, benefit, and bind the
successors of the respective PARTNERS, jointly and individually.
9) Counterparts. This OPERATING MOU may be executed in any number of
counterparts, each of which when executed shall be deemed an original, but all of
which together shall constitute one and the salve instrument.
10) Authority. Each individual executing this OPERATING MOU on behalf of
another person or legal entity represents and warrants that they are authorized to
execute and deliver this OPERATING MOU on behalf of such person or entity in
accordance with duly adopted resolutions or other authorizing actions necessary and
proper and under such legal entity's articles, charter, bylaws, or other written rules
of conduct or governing agreement, and that this OPERATING MOU is binding
upon such person or entity in accordance with its terms.
11) Administrative Claims Requirements and Procedures. No suit or arbitration
shall be brought arising out of this agreement, against a PARTNER unless a claim
has first been presented in writing and filed with that PARTNER and acted upon by
13
MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
that PARTNER in accordance with the procedures set forth in that respective
PARTNER's municipal code, as same may from time to time be amended, the
provisions of which are incorporated by this reference as if fully set forth herein,
and such policies and procedures used by the PARTNER in the implementation of
same. Upon request by the PARTNER against whom a claim is filed, the affected
Partner(s) shall meet and confer in good faith with each other for the purpose of
resolving any dispute over the terms of this Agreement.
IN WITNESS WHEREOF, each PARTNER shall abide by the terms of this OPERATING MOU
and hereby executes the same by and through its duly authorized representative.
THE CITY F SAN DIEGO, a Califo is municipal corporation
BY: (�
Julie bick, Deputy Chief of Staff
Of e of the Mayor
CITY OF CHULA VISTa California municipal corporation
BY:
andoval, City Manager
CITY OF 1�LAj[IONAL CITY, a California municipal corporation
BY:
Ron Morrison, Mayor
SAN DIEGO UNIFIED PORT DISTRICT
BY:
Charles Wurstr, Executive Director
14
MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
APPROVED AS TO FORM AND LEGALITY:
JAN I. GOLDSMITH, City Attorney for San Diego
BY:
Brock Ladewig, Dep
GEORGE H EISER, III, City Attorney for National City
BY: /3 aIc
DUANE,B NNETT, S , D. go,� nified Port District Attorney
BY:
David Catalino, Deputy Port Attorney
15
MEMORANDUM OF UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL ENTERPRISE ZONE PROGRAM
ATTACHMENT A
SJ IE OP CAI rFC RRIA -BUSAFS,S_JBANSPORDITION-BUSJNFS ALNatiOUBING .Et ArnolrJ htiva¢enege r f_ioyetngr
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
DIVISION OF FINANCIAL ASSISTANCE
STATE ENTERPRISE ECONOMIC DEVELOPMENT SECTION
Enterprise Tax Incentive Programs
1800 Third Street, Suite 390
P 0 Box 952054
Sacramento, CA 94252.2054
(916) 322-1554
FAX (916) 327-6660
January 17, 2007
Scott Kessler
Deputy Director
City of San Diego
600 B Street, Fourth Floor, MS-904
San Diego, CA 92101-4506
Dear Mr. Kessler:
On November 3, 2006, the Department of Housing and Community Development (Department)
awarded a conditional Enterprise Zone designation to the City of San Diego The enclosed
table, Conditions for the San Diego Enterprise Zone, specifies the conditions that the
Enterprise Zone must satisfy in order to obtain the final designation. The Enterprise Zone
must complete and submit to the Department its responses to these conditions by 5 p.m. on
March 2, 2007.
Upon receipt of the responses, the Department will determine whether the Enterprise Zone has
satisfied all of the specified conditions. If the Department accepts the responses as
satisfactory, it will issue to the Enterprise Zone the Final Designation Letter.
This letter represents the conditional designation letter for your new designation. Because
your enterprise zone's previous designation recently expired, this letter grants your new
enterprise zone, in accordance with Section 7074.2(c) of the Government Code, the option to
offer eligible taxpayers doing business within the geographic boundaries of the new zone all
enterprise zone benefits until the Department makes a final designation or declines to
redesignate the zone. The Department shall make the effective date of the new zone the date
of expiration of the previous designation and the term of the new zone shall begin on that date.
The geographic boundaries of the new zone are described on the enclosed document titled
Geographic Boundaries of the San Diego Enterprise Zone.
According to the California Code of Regulations, Title 25, Article 8, Section 8445.2, a
conditionally -designated enterprise zone may request an extension of time to satisfy the
conditions. The Department must receive in writing the request for an extension of the time by
March 2, 2007.
if you have any questions, please contact me at (916) 327-2862.
Sincerely,
F" Luera, C ief
State Enterprise and Economic Development
Conditions for Designation
For
The San Diego Enterprise Zone
#
Condition(s)
Authority.
1.
Describe the specific steps the multi-jurisidictional enterprise
zone will take to ensure that the economic development and
Page 12
marketing plan contained in its Application or esigna ion
represents a unified, coherent plan, which addresses the needs
of the entire application area, and that the employment,
economic, and physical infrastructure commitments proposed
serve the en i fe applica ion area.
2.
Provide explicit, quantifiable goals that will be accomplished in
the first five years of the proposed enterprise zone.
Page 20
3.
Describe how performance of the activities in the Financing
Plan will be self -evaluated.
Page 24
4.
Describe the self -evaluation process to be used to evaluate the
performance of each Local Incentive offered to zone
businesses.
Page 28
5.
Submit two copies of the certified Environmental Impact Report
addressing the environmental impacts of designation of thef
proposed zone and of the Notice of Completion as described in
CEQA Guidelines, Section 15085.
Page 32
— 4y,
b
Fix, ,-ti
Unless otherwise stated. the authority cited is the page number from the Department of Housing and
Community Development's Application for Designation-2006 (Handbook).
ATTACHMENT B
San Diego Regional Enterprise Zone
Program Budget and Partnership Contributions
Fiscal Years 2008-2012
ADMINISTRATIVE
BUDGET
FY2008
FY2009
FY
2010(1)
FY
2011(t)
FY
2012(1)
FY 2013-
2021
Partnership
Contribution
City of Chula Vista
$48,500
$48,500
$48,500
$48,500
$48,500
See (2)
$242,500
City of National City
$48,500
$48,500
$48,500
$48,500
$48,500
See (2)
$242,500
City of San Diego
$422,361
$422,361
$422,361
$422,361
$422,361
See (2)
$2,111,805
Port of San Diego
$97,000
$97,000
$97,000
$97,000
$97,000
See (2)
$485,000
TOTAL
$616,361
$616,361
$616,361
$616,361
$616,361
$3,081,805
Note: Does not include
State HCD EZ Hiring
Credit Application fee
MARKETING
BUDGET(3)
FY 2008
FY 2009
FY
20100)
FY
2011(1)
FY
2012(1)
FY 2013-
2021
Partnership
Contribution
City of Chula Vista
$4,500
$4,500
$4,500
$4,500
$4,500
See (2)
$22,500
City of National City
$2,500
$2,500
$2,500
$2,500
$2,500
See (2)
$12,500
City of San Diego
$4,500
$4,500
$4,500
$4,500
$4,500
See (2)
$22,500
Port of San Diego
$1,500
$1,500
$1,500
$1,500
$1,500
See (2)
$7,500
TOTAL
$13,000
$13,000
$13,000
$13,000
$13,000
$65,000
TOTAL
ANNUALIZED
PRGRAM BUDGET
FY 2008
FY 2009
FY
2010(1)
FY
2011(1)
FY
2012(1)
FY 2013-
2021
Partnership
Contribution
City of Chula Vista
$53,000
$53,000
$53,000
$53,000
$53,000
See (2)
$265,000
City of National City
$51,000
$51,000
$51,000
$51,000
$51,000
See (2)
$255,000
City of San Diego
$426,861
$426,861
$426,861
$426,861
$426,861
See (2)
$2,134,305
Port of San Diego
$98,500
$98,500
$98,500
$98,500
$98,500
See (2)
$492,500
TOTAL
$629,361
$629,361
$629,361
$629,361
$629,361
$3,146,805
In consideration of SAN DIEGO'S lead agency position, and agreement to administer the SDREZ Program, to coordinate
workforce development services for businesses located in the SDREZ, submit quarterly voucher reports, and other Zone
program related services and reports, as stipulated in Sections 3 and 6 of the OPERATING MOU, the PARTNERSHIP
shall be responsible for compensation of an annualized amount of program funding to SAN DIEGO to provide
administrative support for the SDREZ for Fiscal Years 2008-2022.
SAN DIEGO shall invoice each PARTNER for Administrative Budget obligations on a quarterly basis. The
PARTNERSHIP shall reimburse the aforementioned annualized amount of program funding to SAN DIEGO. Payment
is due to SAN DIEGO within thirty days from the date of the invoice. The PARTNERSHIP shall track its own marketing
expenditures annually and submit a report itemizing its marketing expenditures to San Diego at the end of each fiscal
year.
Notes:
(1) The budget may be adjusted by no more than 5% per year and such adjustment must be approved in writing by the
respective contract administrators for the PARTNERSHIP.
(2) The PARTNERSHIP may renegotiate this MOU in accordance with Section 5 of the OPERATING MOU. If no
amendments occur, funding levels shall remain the same as the previous fiscal year.
(3) Marketing budget expenses include hard and soft costs associated with marketing the SDREZ.
SDREZ OPERATING MOU Budget.doc
RESOLUTION NO. 2010 — 32
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY
AUTHORIZING THE MAYOR TO EXECUTE A MEMORANDUM OF
UNDERSTANDING FOR OPERATION OF THE SAN DIEGO REGIONAL
ENTERPRISE ZONE PROGRAM BETWEEN THE CITIES OF NATIONAL CITY,
SAN DIEGO, CHULA VISTA, AND THE SAN DIEGO UNIFIED PORT DISTRICT,
COLLECTIVELY REFERRED TO AS THE "PARTNERSHIP"
WHEREAS, the California Housing and Community Development Department
(HCD) oversees the Enterprise Tax Incentives Program whose goal is to stimulate growth in
economically depressed areas of the State; and
WHEREAS, the City of National City joined with the Cities of San Diego and
Chula Vista, and the San Diego Unified Port District (the "Partnership") to be designated as a
regional Enterprise Zone; and
WHEREAS, on August 22, 2006, the City Council adopted Resolution No. 2006-
175, authorizing submission of an application to the HCD for a San Diego Regional Enterprise
Zone ("SDREZ") designation, which would include the Partnership, and authoriizing the Mayor
to execute the necessary documents and agreements related to the application process; and
WHEREAS, on November 3, 2006, HCD awarded conditional SDREZ
designation, and in a January 17, 2007 letter, set forth conditions to be satisfied prior to the final
SDREZ designation; and
WHEREAS, an Environmental Impact Report (EIR) was considered and certified
by City of San Diego; and
WHEREAS, the EIR for the SDREZ has been completed and is on file in the
Office of the City Clerk; and
WHEREAS, on April 21, 2009, the City Council adopted Resolution No. 2009-83
accepting the certified final EIR, and
WHEREAS, on July 29, 2009, the City Council adopted Resolution No. 2009-118
adopting the modified boundaries of the SDREZ.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
National City hereby authorizes the Mayor to execute a Memorandum of Understanding for
Operation of the San Diego Regional Enterprise Zone Program between the Cities of National
City, San Diego, Chula Vista, and the San Diego Unified Port District, collectively referred to as
the "Partnership". Said Memorandum of Understanding is of file in the office of the City Clerk.
PASSED and ADOPTED this 2nd day of March, 20
Ron Morrison, Mayor
ATTEST: APPROVED AS TO FORM:
°)
N / z'
Michael R. Dalla, City Clerk
George H. Eiser, III, City Attorney
Passed and adopted by the Council of the City of National City, California, on March 2,
2010 by the following vote, to -wit:
Ayes: Councilmembers Morrison, Parra, Sotelo-Solis, Van Deventer, Zarate.
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY: RON MORRISON
Mayor of the City of National City, California
City lerk of the ity of ational City, California
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2010-32 of the City of National City, California, passed and adopted
by the Council of said City on March 2, 2010.
City Clerk of the City of National City, California
By:
Deputy
CITY OF NATIONAL CITY, CALIFORNIA
COUNCIL AGENDA STATEMENT
c aoto - `1
MEETING DATE: March 2, 2010
AGENDA ITEM NO. 13
ITEM TITLE:
Resolution of the City Council Approving and Authorizing the Mayor to Execute the Memorandum of
Understanding for Operation of the San Diego Regional Enterprise Zone (SDREZ) Program (Operating MOU)
and Budget Between the Cities of National City, San Diego, Chula Vista, and the San Diego Unified Port
District, collectively referred to as the "Partnership"
PREPARED BY: Alfredo . DEPARTMEN
PHONE: 336-4279 APPROVED
EXPLANATION:
This resolution will approve and authorize the Mayor to execute the Operating MOU and budget for the SDREZ Partnership between the
Cities of National City, San Diego, Chula Vista, and the San Diego Unified Port District. This new designation is a long-term (15-year)
partnership between local governments and private companies to generate new private sector investment and growth with the state
providing performance -based tax credits and incentives to Enterprise Zone businesses. The purpose of the SDREZ is to: 1) revitalize
chronically deteriorated areas; 2) hire the most difficult to hire residents in private sector jobs; and 3) retain, expand, and reward
businesses that participate in these objectives.
•
FINANCIAL STATEMENT:
ACCOUNT NO.
APPROVED:
APPROVED:
Finance
MIS
The Operating MOU requires the City to pay its proportionate share of $51,000 annually for the City of San Diego's administrative and
marketing costs. The Economic Development Divisions FY 2010 budget includes the $51,000 costs for the current program year.
ENVIRONMENTAL REVIEW:
On April 21, 2009 Council accepted the certified EIR for the SDREZ, as required by the State of California HCD.
ORDINANCE: INTRODUCTION:
FINAL ADOPTION:
STAFF RECOMMENDATION:
Council adopt the resolution
BOARD / COMMISSION RECOMMENDATION:
Not Applicable
ATTACHMENTS: Wo. ao\o-'3
1. Operating MOU and Budget for the SDREZ Program
N
+NerJaponivr
OFFICE OF THE CITY CLERK
1243 National City Blvd.
National City, California 91950
Michael R. Dalla, CMC - City Clerk
619-336-4228 phone • 619-336-4229 fax
CITY OF SAN DIEGO, CITY OF CHULA VISTA,
SAN DIEGO UNIFIED PORT DISTRICT
Resolution No. 2010-32
Operation of the San Diego Regional
Enterprise Zone Program
Alfredo Ybarra (Housing & Grants) Forwarded
Copy of Agreement to Partners