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FINANCIAL STATEMENT Approximately $6.8 million of the cost of the necessary JDEDZ transportation improvements' will be funded through a 25-year sales tax sharing agreement with Costco at a 1.5 percent interest rate. The proposed JDEDZ Fee, if assessed on all future (non-Costco) development, would result in $8.6 million in revenues that would reduce the amount the City would be required to reimburse Costco through the sales tax sharing agreement. If the JDEDZ fee revenues are received after the City fully reimbursed Costco through the sales tax sharing agreement, then those amounts will be used to reimburse the City's General Fund. The $5.2 million ACTC grant will reduce the amount of Traffic Impact Fee funds that the City will need to allocate towards the Stoneridge Drive Queue Spillback project. The $1.8 million in Dublin Freeway Reimbursement Reserve funds will cover the City's obligation to fund 50 percent of the right of way (ROW) expenses as well as to fund 50 percent of project costs that exceed 2017 estimates. There is a total of$4.1 million available in the Dublin Freeway Reimbursement Reserve. BACKGROUND Purpose of the JDEDZ & Transportation Improvement Costs The JDEDZ, approved by the City Council on February 4, 2020 changed General Plan land use designations and zoning to spur investment in 40 acres of mostly underutilized land primarily fronting Johnson Drive near Interstate 680 (1-680) and Stoneridge Drive. In order to accommodate the current traffic and the increased traffic that the JDEDZ will create at full build-out, there are several transportation improvement projects that need to be constructed, which are currently estimated to cost approximately $27.6 million. Anticipated Development & Daily Trips The first development in the JDEDZ is anticipated to be a Costco store. The Costco store is expected to generate 44 percent of the total daily trips within the JDEDZ. Tharaldson Hospitality, a hotel developer and property owner in the JDEDZ, have also indicated their interest in developing two hotels with a maximum of 231 rooms on two sites that total approximately five acres in the JDEDZ. The hotels would generate about 12 percent of the total daily trips at full build-out of the JDEDZ. Staff does not know when the remaining properties in the JDEDZ will be developed consistent with the JDEDZ zoning. On September 18, 2017, City Council provided policy direction to staff to ensure that all of the transportation improvements be constructed before Costco could open a store in the JDEDZ. That direction was reaffirmed with the EDZ approvals in December and approval of the agreement with Costco in February of 2018, as described in more detail below. Funding for Transportation Improvements Because the Costco store is only going to generate 44 percent of the total daily trips at full build-out of the JDEDZ, the City negotiated an agreement (Agreement) with Costco Page 2 of 7