CCMIN08292017 - Laserfiche WebLink

Regarding Policy Question 2, Councilmember Brown reported she is a Costco shopper but it is a little inconvenient to drive to other cities. However, she expressed concern regarding the exposure the program offers to the City and noted other major projects/amenities in the City with assessment districts, these created jobs. She addressed sales tax revenue and expressed concern that with this project, 40% of what should go to the City, will go to Costco to repay what they have spent upfront to build the infrastructure. She worried about setting a precedent and stated she would like to see Nearon contributing, upfront, for infrastructure costs. She stated she would like staff to continue working on negotiations to make the deal more palatable. Councilmember Olson said all that does is delay the project and noted if there is no Costco, there is no money; no tax revenue coming from Costco. He reported the City would receive 60% in tax revenue and 40% would go to repay the loan. He asserted Costco is taking a lot of risk; felt it is time to move on with the project; and reported the City is not losing any money on the deal. He agreed with Item No. 1 noting the sales-tax-sharing agreement is the way to go. Councilmember Narum reported receiving emails from the public about the project and agreed with moving the sales-tax-sharing agreement, forward, and does not see any risk for the City if there are . conditions stating if Costco closes, the loan is forgiven or terminates at the end of 25 years. She noted improvements to the property will make it more valuable and felt it is time to move the project forward. She suggested exploring additional deals with Nearon and stated she likes to see language added, that clarifies the loan terminates in 25 years; that it terminates if the store closes; and addressing the cost over-run split. Vice Mayor Pentin addressed the election; noted voters want a Costco; and agreed with the tax- sharing plan. He reported staff will return with modifications as discussed and that plus negotiations with Nearon will be considered, again, by Council. He expressed support for the tax-sharing plan, as proposed. In terms of Policy Question 1, Councilmember Olson reported he is not in favor of waiting until all the transportation network improvements are in before any uses can occur in the development zone. He made a distinction between Costco being able to start building, and opening its doors. He added the City should be allowed to build hotels in the zone, prior to transportation improvements and expressed concerns regarding having to deal with Caltrans. Councilmember Narum stated she would like more information before deciding. She expressed concerns with having construction of transportation improvements and Costco, and hotels, concurrently. She added she would like to see a project timeline and flow. Councilmember Brown agreed with Councilmember Narum's comments but suggested Council should wait until there are enough infrastructure improvements to facilitate hotel uses. Vice Mayor Pentin noted changes in levels of service by developing hotels, noting it is not impactful. If the City moves forward, with the right agreements in place, knowing traffic analysis will work without improvements, the City can move forward with the hotels. He felt the plan for the occupancy of Costco, before Phase 1 improvements are done, should be maintained. Assistant City Manager Dolan agreed more information is needed regarding the hotels and that information will be presented as part of the Johnson Drive Economic Development Zone traffic studies. City Council Minutes Page 5 of 6 August 29,2017