Public Hearing Notices & Reports
CITY OF PICO RIVERA
PROPOSED ECONOMIC DEVELOPMENT SUBSIDY TO PR CHENTE, INC.
Pursuant to Section 53083(a) (6) (b) of the California Government Code (AB 562), the City of Pico Rivera is providing the following information regarding a proposed economic development subsidy.
The City of Pico Rivera desires to assist in the City’s economic development efforts to bring high-quality retail and restaurants to the Pico Rivera community which will likely result in higher sales tax revenues and create jobs within the City. The City has the ability to implement the provisions of AB 562, a statewide economic development tool passed by Governor Brown in late 2013 for the purpose of allowing local jurisdictions to induce economic development. The City of Pico Rivera and PR Chente, Inc. are proposing to enter into an agreement to allocate Economic Development Administration (“EDA”) funds to provide financial assistance in the form of an economic development subsidy to PR Chente, Inc. as described in the Operating Covenant Agreement. Pursuant to Section 53083(a) of the California Government Code (AB562) the following information will be posted on the City’s website.
1) The name and address of all corporations, or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy, if applicable.
PR CHENTE, INC. a California corporation, 8615 Florence Avenue, Suite 217, Downey, CA 90240
2) The start and end dates and schedule, if applicable, for the economic development subsidy.
Commencing approximately June 14, 2017, and continuing for ten (10) years following the issuance of a final certificate of occupancy.
3) A description of the economic development subsidy, including the estimated total amount of expenditure of public funds, or of revenue lost to, the local agency, as a result of the economic development subsidy.
The City would provide PR Chente, Inc. with assistance in consideration of certain covenants and restrictions detailed in the Operating Covenant Agreement (“Agreement”). The subsidy is provided as a one-time economic incentive grant in the amount of $495,000 (“Grant”), which must be repaid in the event of a default as detailed in the Agreement. A short-term bridge loan in the amount of $287,050 (“Loan”) is also provided, which will be repaid by PR Chente, Inc. in full plus interest (3% per annum, unpaid sums shall bear interest at a rate of 10%). The Grant and Loan will be provided from the City’s Economic Development Administration reimbursement funds. The City received funds from the U.S. Economic Development Administration (“EDA”) to fund public improvements for the former Northrop-Grumman site located in the City. The City was subsequently reimbursed by the developers of the Northrop-Grumman site for those public improvements and the City can reinvest those EDA funds to further economic development objectives in the City such as encouraging job growth and attracting private development.
The City estimates that the sales tax revenue generated from PR Chente, Inc. and other increased business sales within the Village Walk Entertainment Center will be regained in five (5) years.
4) A statement of the public purposes for the economic development subsidy.
To expand and enhance economic opportunities for businesses in the City, continue to expand the City’s employment base, and continue to generate sales tax that the City can utilize to fund governmental services such as public safety, street and park maintenance, and the provision of recreational programs.
5) Projected tax revenue to the local agency as a result of the economic development subsidy.
The City of Pico Rivera is projected to receive an average of approximately $107,755 per year in sales tax revenue.
6) Estimated number of jobs created by the economic development subsidy, broken down by full-time, part-time, and temporary positions.
The City and PR Chente, Inc. have estimated that the Agreement creates ten (10) full-time jobs in the City, over the term of the Agreement, PR Chente, Inc. will generate an additional 20 to 25 part-time jobs and five (5) to ten (10) seasonal jobs in the City.