Exhibit A
ECONOMIC DEVELOPMENT INCENTIVE PROGRAM PARTICIPATION
AGREEMENT
This Economic Development Incentive Program Participation Agreement (“Agreement”) is made and entered into this ___ day of _________, 2022, by and between the City of Ripon (“City”), a California municipal corporation, and Venture Hospitality, Inc. (“Participant”), each of which may be referred to herein as “Party” or collectively as “Parties.” This Agreement is made with respect to the facts and circumstances set forth in the Recitals.
RECITALS
A. Historically, the City has had difficulty attracting non-residential based businesses due to many factors such as population, proximity to other larger jurisdictions with like services and goods, noncompetitive development fees, etc. As such, the City continues to experience sales tax and transient occupancy tax leakage for many types of retail goods and commercial businesses.
B. The City has the ability to implement the provisions of AB 562, a statewide economic development tool passed by the California Legislature in late 2013 for the purpose of allowing local jurisdictions to induce economic development for the creation and maintenance of jobs.
C. As a result, the City has developed the City of Ripon Economic Development Incentive Program (“Program”). The Program is designed to stimulate private sector investment in tax producing development in Ripon with the goal of retaining and growing the tax structure and jobs that are essential to maintaining a high quality of life for City residents.
D. Participant properly submitted the standard Program application form and was confirmed to be an eligible applicant. Participant is in the hospitality business and will be developing a new 90+ room hotel on an undeveloped site within the City (the “Project”).
E. The City and Participant have estimated that the Project will create fifteen to twenty full and part time jobs in the City and over the term of the Agreement. In addition, the Project is expected to generate substantial transient occupancy tax.
F. The City is proposing to provide an economic development incentive to Participant in the form of a subsidy of development impact fees in the amount of FOUR HUNDRED SIXTEEN THOUSAND FOUR HUNDRED TWENTY SIX dollars ($416,426) (the “Subsidy”), wherein the amount of the Subsidy shall be deducted from the amount of Public Facilities Financial Plan (“PFFP”) development impact fees ordinarily due and payable upon development of the Project, as provided herein.
G. On February 14, 2022, the City of Ripon Planning Commission approved a use permit application for Towneplace Suites by Marriott submitted by Participant with a 5-0 vote.
H. The City finds that the Subsidy provided to Participant under the Program is not a gift of public funds and will advance the public welfare in the City by generating substantial transient occupancy tax and creating jobs in the City.
NOW, THERFORE, IT IS AGREED AS FOLLOWS:
1. Truth of Recitals/Eligibility. The Parties represent and warrant that the information in the Recitals is true and correct to the best of their knowledge and are hereby incorporated within. Participant also represents and warrants the materials submitted to the City are true and correct, and form the basis for the City’s determination of Participant’s eligibility for participation in the Program. In the event the City determines that any material information bearing upon Participant’s eligibility is subsequently discovered during the term of this Agreement, or in the event Participant fails to maintain its eligibility for the Program, then at City’s option Participant shall pay the full amount of the subsidy to City.
2. Participation in Program/Subsidy. Subject to the terms and conditions of this Agreement, the City agrees to provide the Subsidy of PFFP development impact fees ordinarily due and payable upon development of the Project. The City PFFP fees will be reimbursed for the Subsidy from 100% of the transient occupancy tax actually received and attributable to Participant’s operation within the City up to a total Subsidy amount of $416,426 dollars, until such time as the entire Subsidy is paid in full. It is understood and agreed that transient occupancy tax revenue is distributed to the City by the California Department of Tax and Fee Administration on a quarterly basis, and that Subsidy reimbursements will be made to the PFFP fees. At the sole discretion of the City Council, repayment terms of the Subsidy may be modified by resolution of the Ripon City Council.
3. Participant Obligations. Participant agrees to all of the following:
a. to not open the same business within all areas of the City limits (known as the “Primary Trade Area”) for the term of the Agreement;
b. to comply with all applicable federal, state and local laws; c. to stay current on all financial filings with the State of California and San Joaquin County;
d. to obtain and thereafter annually renew a City business license and comply with all laws and regulations;
e. to indemnify the City against any claim of violation of Government Code sections 53084 or 53084.5 regarding financial assistance that affects another public agency.
In order to remain eligible for the Subsidy described herein, Participant shall comply with any and all applicable licenses and permits from the City and any other governmental agency(s) with jurisdiction over its business. During the term of this Agreement, Participant shall, from time to time and as requested by the City, supply business records and occupancy data to the City, which shall remain confidential.
4. City Obligations. In compliance with Government Code sections 53084 and 53084.5, when applying the Program, the City must determine that the incentive is not a gift of public funds, and specific findings must be made. Therefore, the City Council hereby finds that the Subsidy provided to Participant under this Agreement advances the public welfare and provides adequate consideration in return to the City as follows:
a. The net financial benefit to the public will exceed the value of the incentives provided because Participant will only receive the Subsidy of $416,426, of which the City will be reimbursed for all subsidized PFFP fees from the transient occupancy tax generated from Participant’s sales within the City. Additionally, after completion of the Subsidy reimbursements under this Agreement, the City General Fund will retain 100% of the transient occupancy tax generated. b. The Project will provide a direct public benefit through the generation of transient occupancy taxes to the City from the sale of hotel rooms which would not occur without the Project.
c. The Subsidy represents a return of fees that will be realized from new transient occupancy tax revenues, such that the Subsidy incentives will not impact the City’s current General Fund balance as the incentives will be based on future, additional revenues to the General Fund.
5. No Partnership or Joint Venture. It is expressly understood and agreed that no partnership, joint venture, joint powers authority, or other association is formed between the Parties as a result of this Agreement. The only relationship between the City and Participant is that of an agency providing financial assistance to a private company, consistent with the provisions of AB 562 and California Government Code sections 53083 through 53084.5, and in furtherance of the Program. This Agreement is not intended to create any third party beneficiary rights in any person or entity which is not a Party hereto.
6. Applicable Law and Attorneys’ Fees. This Agreement shall be construed and enforced in accordance with the laws of the State of California. In the event of litigation between the Parties with respect to this Agreement, the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs. For purposes of this Agreement, reasonable attorneys’ fees of the City Attorney’s Office shall be based on comparable fees of private attorneys practicing in the County of San Joaquin.
7. Construction of Agreement. The provisions of this Agreement and any Exhibits hereto shall be construed as a whole according to their common meaning and not strictly for or against any Party and consistent with the provisions hereof, in order to achieve the objectives and purpose of the Parties hereunder. The captions preceding the text of each paragraph and subsection hereof are included only for convenience of reference and shall be disregarded in the construction and interpretation of this Agreement.
Wherever required by the context, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine or neuter genders and vice versa.
8. Entire Agreement. This Agreement may be executed in duplicate originals, each of which is deemed to be an original, and which constitute the entire understanding and agreement of the Parties.
9. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original Agreement, and all of which shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the date first above written.
Venture Hospitality, Inc.
By: _______________________ By: ______________________
Dean Uecker, Mayor
Its: ______________________
ATTEST
By: _______________________
Lisa Roos
City Clerk
APPROVED AS TO LEGAL FORM
By: _______________________
Thomas H. Terpstra
City Attorney