City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00353 11/14/2023 Consent Item 51.
Approval of Sacramento Iceland Ice Skating Rink Forgivable Loan and Facade Loan Agreements and Amended ARPA North Sacramento Economic Recovery Plan Framework File ID: 2023-00353
Location: 1430 Del Paso Boulevard, District 2, Represented by Councilmember Loloee Recommendation: Adopt a Resolution: 1) amending the ARPA North Sacramento Economic Recovery Plan Framework to redistribute the $200,000 loan previously allocated to Sammy’s Restaurant by allocating $125,000 to the Iceland Restoration Project and $75,000 to Transformative Reinvestment Grants; 2) authorizing the City Manager or the City Manager’s designee to: a) execute a $1,233,990 forgivable loan agreement with Sacramento Iceland to purchase and install a prefabricated metal roof structure so that Iceland can operate year-around; b) execute a $125,000 facade loan agreement with Sacramento Iceland to complete façade improvements supporting Iceland’s reopening and the Del Paso Boulevard commercial corridor’s post-COVID-19 recovery; c) execute any amendment to the forgivable loan agreement and facade loan agreement, subject to approval as to form by the City Attorney or the City Attorney’s designee, if the amendment does not change the total loan amount, interest rate, conditions for loan forgiveness, or extend the term of the loan; d) transfer $1,233,990 from the Iceland Restoration Project (I02181600, Fund 2401) to the Forgivable Loan Program (I02180400); e) transfer $125,000 from the ARPA North Sacramento Project (I02612090, Fund 1003) to the Forgivable Loan Program (I02180400); and f) take any necessary budgetary and administrative actions needed to implement and administer the forgivable and repayable loan agreements.
Contact: Amanda Wallace, Development Project Manager, (916) 808-5453, [email protected]; Leslie Fritzsche, Economic Investment Manager, (916) 808-5450, City Manager’s Office of Innovation and Economic Development, [email protected]
Presenter: None.
Attachments:
1-Description/Analysis
2-Sacramento Iceland Forgivable Loan Agreement
3 -Sacramento Iceland Facade Loan Agreement
4-Amended ARPA North Sacramento Economic Recovery Plan Framework
File ID: 2023-00353 11/14/2023 Consent Item 51.
5-Resolution
Description/Analysis
Issue Detail: The Iceland ice skating rink opened in 1940 on Del Paso Boulevard and is currently celebrating its 83rd anniversary. Although the ice rink was completely destroyed in 2010 by an arson fire, it re-opened later that year because of the efforts of over 400 volunteers who contributed more than 20,000 hours to restore the facility. Through fund raising efforts, Iceland was able to restore the ice rink. Unfortunately, because the roof was a wooden structure, it could not be saved.
Today, Sacramento Iceland, a 501(c)(3) tax exempt non-profit public benefit corporation that serves the North Sacramento community, operates the ice rink under a 20-year lease agreement with the property owner, American Iceland, LLC (American Iceland). Sacramento Iceland, operating under the name of Skate Sacramento, runs the ice rink without a roof and only during the winter season. Prior to February 2020 when Iceland was forced to close due to the COVID-19 pandemic, the ice rink served more than 20,000 skaters annually, most of whom live in the North Sacramento community.
Iceland has been unable to reopen following the prolonged closure caused by COVID-19 and the building has fallen into even more disrepair.
With a new roof structure Skate Sacramento could operate year-round, serving up to 50,000 people annually and façade improvements will improve the physical appearance of the shuttered business.
Combined, these improvements will revitalize a long-standing community asset and spur economic recovery and beautification of the Del Paso boulevard commercial corridor. Staff recommends the City Council approve two separate loan agreements totaling $1,358,990 and authorize the budgetary actions necessary to ensure such a vital community resource reopens to the public on a year-round basis. Both loan agreements would allow for recourse liability against the borrower and require American Iceland to sign guaranty agreements in favor of the City guaranteeing payment under the loan agreements. American Iceland’s guaranty for the forgivable loan agreement will be secured by a deed of trust against the property on which the ice rink is located.
Forgivable Loan
As part of the FY2019/20 Approved Budget (Resolution No. 2019-0248), the Iceland Restoration Multi-Year Operating Project (I02181600) was established for $1.3 million (Measure U Fund, Fund 2401) to refurbish Iceland so that it can be used year-round. Between 2019 and 2021, American Iceland utilized $66,000 from the budget allocation for predevelopment costs before higher-thanexpected cost estimates caused it to pause the project and reevaluate the project scope.
Now, plans to refurbish Iceland so that it can operate year-around include installing a detached, prefabricated metal roof structure over the existing outdoor ice-skating rink, upgrading on- and offsite utilities, and purchasing new fixtures and equipment such as new skates and flooring. The total cost of refurbishing Iceland so that it can operate year-around is approximately $2,110,000.
File ID: 2023-00353 11/14/2023 Consent Item 51.
Staff recommends the City provide Iceland the remaining $1,233,990 from the 2019 budget allocation as a 15-year forgivable loan to purchase and install the roof structure, with Sacramento Iceland providing the remaining $876,010. For tax purposes, American Iceland requests that the borrower be Sacramento Iceland instead of American Iceland. Forgiveness of annual loan payments of $82,266 is contingent on Sacramento Iceland meeting annual performance targets including:
· Maintaining the property in a clean and safe condition; · Operating the skating rink facilities a minimum of 2,000 hours annually, including hours devoted to public skating, private lessons, shows, tournaments, and other programming; · Providing 250 skate school scholarships annually to District 2 residents; · Serving 30,000 skaters annually; and
· For the first annual loan payment only, the façade of the existing building must be improved according the conditions of the Repayable Loan Agreement.
Facade Loan
In addition to the need for a new roof, the building requires a face-lift to enhance its presence on the Boulevard. The budget for façade repairs, including restoring all neon signage and lighting, replacing the glass block windows and front façade tile, installing a new entryway and door, and repainting the exterior of the building totals approximately $150,000. Staff recommends the City provide Sacramento Iceland $125,000 from the ARPA North Sacramento Economic Recovery Project (I02612090) ARPA Reinvestment Fund (Fund 1003) as a repayable loan to complete the façade improvements and maximize the benefit of Iceland’s reopening. The 15-year loan would be amortized over 30 years at a four percent annual interest rate. During the loan term, Sacramento Iceland is required to make monthly payments of principal and interest with a balloon payment of principal and interest due at the end of year 15. Iceland would provide the remaining $25,000.
Project Timeline
The City’s Community Development Department approved American Iceland’s application for site plan and design review for the project in February 2023 (DR21-207) and the Building Department is currently reviewing the building permit application. Construction of the roof structure and façade improvements are anticipated to be completed and skate rink operations resumed by summer of 2024. Repayment of the facade loan will begin January 31, 2025 to allow for a period to stabilize operations, while repayment of the forgivable loan will begin January 31, 2026. Once Iceland is fully operational and generating surplus revenue, Sacramento Iceland intends to invest approximately $500,000 in additional building improvements which will improve operational efficiency and customer experience, such as insulating the building and installing new bathroom facilities.
The City and the public will benefit substantially if a facility in the heart of Del Paso Boulevard is restored so that it can operate year-round and provide enhanced recreation opportunities for residents of North Sacramento and beyond. The renovated facility will boost customer patronage and beautify the Del Paso Boulevard commercial corridor.
File ID: 2023-00353 11/14/2023 Consent Item 51.
Policy Considerations: This project supports the 2035 General Plan goal to encourage infill development and support the City’s commercial corridors, and is consistent with the adopted ARPA Framework (City Resolution No. 2021-0313) and the ARPA North Sacramento Economic Recovery Plan Framework (City Resolution Nos. 2022-0256 and 2023-0292).
The Sacramento City Code Section 4.04.020 and Council Rules of Procedure (Chapter 7, Section E.2.d) mandate that unless waived by a 2/3 vote of the City Council, all labor agreements, and all agreements greater than $1,000,000 shall be made available to the public at least ten (10) days prior to council action. This item was published for 10-Day review on November 3, 2023, in compliance with City Code.
Economic Impacts: These loan agreements are critical to Del Paso Boulevard’s economic recovery.
The Iceland facility is a long-standing community landmark and amenity to the North Sacramento community. The $1,383,990 provided by the City of Sacramento combined with Sacramento Iceland’s $901,010 contribution represents a $2.26 million immediate investment in the Del Paso Boulevard commercial corridor which will not only attract more than 50,000 patrons to Del Paso Boulevard annually but will better enable Sacramento Iceland to continue investing in the North Sacramento community.
At opening, Sacramento Iceland plans to have an operational reserve of $40,000. Within a few years, Iceland anticipates growing their operational reserve to $100,000, which enables them to invest in additional capital improvements. Sacramento Iceland plans to invest more than $500,000 in additional building upgrades such as building insulation, event rooms, and renovated bathrooms, that will enhance visitor’s experience. Additionally, Sacramento Iceland will provide more than 250 skate school scholarships annually to residents of City Council District 2 (an estimated value of $243,750 over 15 years). Any additional revenue generated by Sacramento Iceland after renovations are complete and the operational reserve stabilized will be invested into additional skate school scholarships or donations to organizations providing services for youth in District 2 above what is required by the forgivable loan performance targets.
Environmental Considerations: This report concerns administrative activities and related to government fiscal activities that do not constitute a “project” because they do not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. (CEQA Guidelines §15378(b)(2) and (b)(4)). Additionally, the activity to refurbish the Iceland Skating Rink was reviewed under project file DR21-207 and determined to be exempt from CEQA pursuant to section 15301 of the CEQA Guidelines.
Sustainability: The actions outlined in this report will assist in the retention of an important business landmark on the commercial corridor of Del Paso Boulevard, assisting the opportunities for increased infill activity and commercial sustainability.
File ID: 2023-00353 11/14/2023 Consent Item 51.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: The Iceland Skating Rink has been a landmark in the city and a beacon of activity on Del Paso Boulevard for more than 80 years, particularly for North Sacramento’s youth. Despite an arson fire in 2010 which destroyed the rink’s roof, Iceland served the North Sacramento community for ten years on a seasonal basis as an outdoor facility. However, since being forced to close in February 2020 due to the COVID-19 pandemic, Iceland has been unable to reopen, and the facility has fallen into further disrepair. Providing Sacramento Iceland with a $1,233,990 forgivable loan to construct a permanent roof structure, and a $125,000 repayable loan for façade improvements will restore this valuable community asset to year-around operation, attracting approximately 50,000 visitors annually, and contributing to the economic recovery of the Del Paso Boulevard commercial corridor.
Financial Considerations: Resolution No. 2019-0248 established the Iceland Restoration Multi-Year Operating Project (I02181600) with a budget of $1.3 million from the Measure U Project Fund (Fund 2401). The $1,233,990 remaining in the Iceland Restoration Project (I02181600), will be transferred from the Iceland Restoration Project (I02181600, Fund 2401) to the Forgivable Loan Program (I02180400).
On Augst 9, 2022, the City Council adopted Resolution No 2022-0256, which formally established the ARPA North Sacramento Project (I02612090) and the ARPA North Sacramento Economic Recovery Plan Framework. The ARPA North Sacramento Economic Recovery Plan Framework included a Small Business Assistance Program aimed at providing assistance with real estate development capital to help property owners bring their assets into productive use. On September 12, 2023, the City Council adopted Resolution 2023-0292 which allocated $200,000 from the ARPA North Sacramento Project (I02612090) Small Business Assistance Program to the owner of Sammy’s Restaurant on Del Paso Boulevard as a repayable loan to support post-COVID-19 reopening efforts.
This loan is no longer contemplated due to a change in business circumstances. This Council action would amend the Framework to reallocate $125,000 of the $200,000 originally allocated to Sammy’s Restaurant for a loan to Sacramento Iceland for façade improvements and $75,000 for Transformative Grants and transfer $125,000 from the ARPA North Sacramento Project (I02612090, Fund 1003) to the Forgivable Loan Program (I02180400).
Local Business Enterprise (LBE): Not applicable.
ARPA North Sacramento Economic Recovery Plan Framework
Project Title Description
Planned
Budget
Allocation
North
Sacramento
Small
Business
Assistance
Program
The program aims to spur recovery for North
Sacramento businesses by providing aid to both
small business owners and commercial property
owners. For small business owners, the program
will pair technical assistance with implementation
capital to help owners scale their businesses. This
includes a direct allocation of $50,000 to The PopUp Shop, a low-interest loan to Sacramento Iceland, and $30,000 for a Small Business
Conference Series
$205,000
North
Sacramento
Façade
Improvement
Program
The program aims to spur economic recovery in
North Sacramento by providing one-time grants to
small business owners and/or commercial
property owners for exterior façade
improvements. Example improvements include:
Paint
Signage
Exterior lighting
Awnings/canopies
Window and/or door replacement
Landscaping
Restoration of original façade features on
older buildings
Architectural review
General outdoor cleaning activities
This includes an allocation $125,000 for the
Iceland Restoration Project. The City also
proposes to set aside a portion of the allocation to
hire a consultant to launch, oversee, and manage
the program including developing list of licensed
and qualified vendors to complete facade
improvements.
$1,000,000
North
Sacramento
Marketing and
Branding
The program aims to spur economic recovery in
North Sacramento by hiring a consultant(s) to
develop and execute a marketing program and
brand strategy that will create better exposure,
visibility, and publicity for the District 2 businesses – especially those impacted by COVID-19 and the
unhoused community impacts (as a result of
$250,000
COVID-19) that will resonate with existing and
prospective businesses, potential visitors, and
industry leaders.
North
Sacramento
Community
Impact Fund
This program will support D2 serving, community
based organization’s transformational projects
and programs that are responding to the COVID19 pandemic recovery and addressing their missions. This includes the following direct
allocations: $150,000 to Capital College & Carrer
Academy; $150,000 to Roberts Family
Development Center; $150,000 to People
Working Together; $150,000 to Humanity Center;
$50,000 to Green Tech; and $50,000 to the
Sacramento Horsemen’s Association.
$700,000
North
Sacramento
Clean and
Safe Program
The program aims to spur economic recovery and
improve public health as well as public safety by
funding safety, security, and clean up stabilization
investments in North Sacramento.
$50,000
Transformative
Reinvestment
Grants
The program will provide aid to nonprofit and
small business initiatives within this district to
promote recovery and growth.
The Transformative Growth Grants Program is
open to businesses and nonprofit organizations
located in Council District 2 that have a vision for
their future and are seeking financial support to
make it happen. The program will prioritize
funding projects and programs that: 1) Create
New Jobs, 2) Retain Existing Jobs, 3) Expand
Existing Business, and 4) Expand Existing
Programs and Services.
$2,795,000
RESOLUTION NO. 2023-
Adopted by the Sacramento City Council
November 14, 2023
Approval of the Sacramento Iceland Skating Rink Forgivable Loan and Facade Loan Agreements and Amended ARPA North Sacramento Economic Recovery Framework
BACKGROUND
A. The Iceland Skating Rink has been a landmark in the city and a beacon of activity on Del Paso Boulevard for more than 80 years. Prior to an arson fire in 2010, Iceland served approximately 50,000 skaters annually. Through fundraising and the efforts of over 400 volunteers, Iceland was able to restore the rink, though the roof structure could not be salvaged.
B. Sacramento Iceland, a 501(c)(3) tax exempt non-profit public benefit corporation that operates under the name Skate Sacramento, operates the ice rink under a 20-year lease agreement with the property owner, American Iceland, L.L.C. (American Iceland).
For ten years, Sacramento Iceland rink operated without a roof and only during the winter season, serving more than 20,000 skaters annually. The rink closed in February 2020 due to the COVID-19 pandemic and has been unable to reopen since, causing the building to fall into further disrepair.
C. With a new roof structure and facade improvements, Skate Sacramento could reopen Iceland Skating rink on a year-around basis and return to serving 50,000 visitors annually. Current plans to refurbish Iceland so that it can operate year-around include installing a detached, prefabricated metal roof structure over the existing outdoor iceskating rink, upgrading on- and offsite utilities, and purchasing new fixtures and equipment such as new skates and flooring, for a total cost of approximately $2,110,000. The budget for necessary façade repairs, including restoring all neon signage and lighting, replacing the glass block windows, replacing front façade tile, installing a new entryway and door, and repainting the exterior of the building totals approximately $150,000.
D. As part of the FY2019/20 Approved Budget (Resolution No. 2019-0248), the Iceland Restoration Multi-Year Operating Project (I02181600) was established for $1.3 million (Measure U Project, Fund 2401) to refurbish Iceland so that it can be used year-round.
American Iceland drew down $66,000 from the budget allocation for predevelopment costs before higher-than-expected cost estimates caused it to pause the project and reevaluate the project scope. The Iceland Restoration Multi-Year Operating Project (I02181600) has an unobligated balance of $1,233,990.
E. On March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) was signed into law making available $350 billion through the State and Local Fiscal Recovery Funds (SLFRF) to assist states, tribal governments, and local governments with the reopening and recovery from the adverse health and economic impacts caused by COVID-19.
The City of Sacramento became eligible for $112.2 million.
F. On October 19, 2021, the City Council adopted Resolution No 2021-0313, which authorized the City Manager or the City Manager’s designee to accept $112.2 million of American Rescue Plan Act (ARPA) funding, establish the ARPA Reinvestment Fund (Fund 1003), allocate $112.2 million of ARPA funds to provide government services, and budget the resulting available resources in the ARPA Reinvestment Fund to assist with recovery and reopening efforts to offset the economic impact of the COVID-19 pandemic.
G. On Augst 9, 2022, the City Council adopted Resolution No 2022-0256, which formally established the ARPA North Sacramento Project (I02612090) and the ARPA North Sacramento Economic Recovery Plan Framework. The ARPA North Sacramento Economic Recovery Plan Framework included a Small Business Assistance Program aimed at providing assistance with real estate development capital to help property owners bring their assets into productive use.
H. On September 12, 2020, the City Council adopted Resolution 2023-0292 which allocated $200,000 from, the ARPA North Sacramento Project (I02612090) Small Business Assistance Program to the owner of Sammy’s Restaurant on Del Paso Boulevard as a repayable loan to support post-COVID-19 reopening efforts. The funding for Sammy’s is no longer contemplated due to a change in business circumstances.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The ARPA North Sacramento Economic Recovery Framework is hereby amended to reallocate the $200,000 previously allocated to Sammy Restaurant by allocating $125,000 for Iceland Restoration Projects and $75,000 for Transformative Reinvestment Grants; the amended ARPA North Sacramento Economic Recovery Framework is attached as exhibit A.
Section 2. The City Manager or City Manager’s designee is authorized to execute the $1,233,990 forgivable loan agreement with Sacramento Iceland to purchase and install a prefabricated metal roof structure so that Iceland can operate yeararound; the forgivable loan agreement is attached as exhibit B.
Section 3. The City Manager or City Manager’s designee is authorized to execute a $125,000 facade loan agreement with Sacramento Iceland to complete façade improvements supporting Iceland’s reopening and the Del Paso Boulevard commercial corridor’s post-COVID-19 recovery; the façade loan agreement is attached as exhibit C.
Section 5. The City Manager or City Manager’s designee is authorized to execute any amendment to the forgivable loan agreement and facade loan agreement, subject to approval as to form by the City Attorney or the City Attorney’s designee, if the amendment does not change the total loan amount, loan repayment terms, interest rate, conditions for loan forgiveness, or extend the term of the loan.
Section 6. The City Manager or the City Manager’s designee is authorized to transfer $1,233,990 from the Iceland Restoration Project (I02181600, Fund 2401) to the Forgivable Loan Program (I02180400).
Section 7. The City Manager or the City Manager’s designee is authorized to transfer $125,000 from the ARPA North Sacramento Project (I02612090, Fund 1003) to the Forgivable Loan Program (I02180400).
Section 8. The City Manager or the City Manager’s designee is authorized to take any necessary budgetary and administrative actions needed to implement and administer the forgivable and facade loan agreements.
Section 9. Exhibits A - C are a part of this resolution.
Table of Contents:
Exhibit A – Amended ARPA North Sacramento Economic Recovery Plan Framework Exhibit B - Sacramento Iceland Forgivable Loan Agreement Exhibit C – Sacramento Iceland Facade Loan Agreement
Exhibit A – Amended ARPA North Sacramento Economic Recovery Plan Framework ARPA North Sacramento Economic Recovery Plan Framework
Project Title Description
Planned
Budget
Allocation
North
Sacramento
Small
Business
Assistance
Program
The program aims to spur recovery for North
Sacramento businesses by providing aid to both
small business owners and commercial property
owners. For small business owners, the program
will pair technical assistance with implementation
capital to help owners scale their businesses. This
includes a direct allocation of $50,000 to The PopUp Shop, a low-interest loan to Sacramento Iceland, and $30,000 for a Small Business
Conference Series
$205,000
North
Sacramento
Façade
Improvement
Program
The program aims to spur economic recovery in
North Sacramento by providing one-time grants to
small business owners and/or commercial
property owners for exterior façade
improvements. Example improvements include:
x Paint
x Signage
x Exterior lighting
x Awnings/canopies
x Window and/or door replacement
x Landscaping
x Restoration of original façade features on
older buildings
x Architectural review
x General outdoor cleaning activities
This includes an allocation $125,000 for the
Iceland Restoration Project. The City also
proposes to set aside a portion of the allocation to
hire a consultant to launch, oversee, and manage
the program including developing list of licensed
and qualified vendors to complete facade
improvements.
$1,000,000
North
Sacramento
Marketing and
Branding
The program aims to spur economic recovery in
North Sacramento by hiring a consultant(s) to
develop and execute a marketing program and
brand strategy that will create better exposure,
visibility, and publicity for the District 2 businesses – especially those impacted by COVID-19 and the
unhoused community impacts (as a result of
$250,000
COVID-19) that will resonate with existing and
prospective businesses, potential visitors, and
industry leaders.
North
Sacramento
Community
Impact Fund
This program will support D2 serving, community
based organization’s transformational projects
and programs that are responding to the COVID19 pandemic recovery and addressing their missions. This includes the following direct
allocations: $150,000 to Capital College & Carrer
Academy; $150,000 to Roberts Family
Development Center; $150,000 to People
Working Together; $150,000 to Humanity Center;
$50,000 to Green Tech; and $50,000 to the
Sacramento Horsemen’s Association.
$700,000
North
Sacramento
Clean and
Safe Program
The program aims to spur economic recovery and
improve public health as well as public safety by
funding safety, security, and clean up stabilization
investments in North Sacramento.
$50,000
Transformative
Reinvestment
Grants
The program will provide aid to nonprofit and
small business initiatives within this district to
promote recovery and growth.
The Transformative Growth Grants Program is
open to businesses and nonprofit organizations
located in Council District 2 that have a vision for
their future and are seeking financial support to
make it happen. The program will prioritize
funding projects and programs that: 1) Create
New Jobs, 2) Retain Existing Jobs, 3) Expand
Existing Business, and 4) Expand Existing
Programs and Services.
$2,795,000
Exhibit B – Sacramento Iceland Forgivable Loan Agreement
Exhibit C - Sacramento Iceland Facade Loan Agreement