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• Sales Tax Sharing Agreement with Costco and JDEDZ Transportation Fee. <br /> Costco would front $6,785,000 and be repaid through a sales tax sharing agreement <br /> not to exceed 25 years with 1.5 percent interest where Costco receives 40 percent <br /> of the annual sales tax generated by the Costco store and the City would receive 60 <br /> percent. The Sales Tax Sharing allocation could increase proportionately to cover <br /> increased Project costs4. If repayment doesn't occur in 25 years due to lower-than- <br /> anticipated sales tax revenues, or if Costco goes out of business within 25 years, the <br /> City would not be responsible for repayment. As described in more detail below, staff <br /> is proposing a JDEDZ Transportation Fee that would be levied on future JDEDZ <br /> development that will be used to repay Costco instead of sales tax revenues. If there <br /> are parcels in the JDEDZ that do not redevelop during the 25-year agreement with <br /> Costco, the City's General Fund will receive those JDEDZ Transportation fees as <br /> repayment for fronting future development's share of the Project costs. <br /> • Costco Cash Contribution. Costco would make a $6,785,000 cash contribution <br /> towards the needed transportation improvements. Costco's cash contribution would <br /> increase to fund its portion of the project cost increases. <br /> • Right of Way Contributions. Costco would dedicate the right-of-way from land that <br /> it owns; the City will seek right of way contributions from other properties subject to <br /> redevelopment as part of the JDEDZ, with any remaining right of way acquisitions <br /> shared equally between the City and Costco. The right-of-way cost estimate is <br /> currently between $600,000 to $2.8 million. The original estimate was $1.5 million. <br /> Thus, it is currently unclear whether ROW costs will be greater or lesser than the <br /> original estimate. <br /> As previously noted, the City intends to adopt a JDEDZ Transportation Fee that would <br /> be charged to future JDEDZ development applicants at the time they pull permits with <br /> the City to develop their property with uses authorized in the JDEDZ. This fee is <br /> described in more detail under "JDEDZ Transportation Fee," section below. <br /> Nonconforming Uses & Grandfathering of Existing Uses within the JDEDZ <br /> All existing uses within the JDEDZ project area are currently legal uses under the <br /> existing zoning. Once the JDEDZ project area is rezoned, some of the existing uses <br /> would become legal nonconforming uses. All legal nonconforming uses within the <br /> proposed JDEDZ, including the Valley Bible Church, as well as the FedEx property and <br /> the AT&T property would be protected as permitted industrial uses, consistent with the <br /> uses permitted and conditionally permitted in the I-P and I-G zoning districts as of <br /> January 1, 2020, and would be allowed on parcels a minimum of five gross acres in <br /> area where existing light industrial uses already exist. As proposed, the allowed land <br /> uses in the area would be greatly expanded to include a wider range of commercial <br /> uses. All existing uses, including those made legal nonconforming by the proposed <br /> rezoning, would be permitted, conditionally permitted, or otherwise protected by <br /> 'The City could use the Dublin Freeway Reimbursement Reserve and the Dougherty Valley Mitigation <br /> Reserve to cover the cost increases rather than increase the amount fronted by Costco to be repaid <br /> through the sales tax sharing agreement. <br /> Page 19 of 23 <br />