Community Development Agency
www.santa-ana.org/community-development
Item # 17
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
February 18, 2025
TOPIC: Public Hearing for Five-Year Economic Development Subsidy reports for TACenergy and THRIVE Santa Ana, LLC
AGENDA TITLE
Public Hearing for Five-Year Economic Development Subsidy Reports for TACenergy and THRIVE Santa Ana, LLC
Legal notice published in the OC Reporter on February 5, 2025.
RECOMMENDED ACTION
1. Conduct Public Hearing to consider any written or oral comments on the information contained in the Five-Year Economic Development Subsidy reports for TACenergy and THRIVE Santa Ana, LLC.
2. Receive and File Reports.
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
Government Code Section 53083, subsection D, requires that the City Council must hold a noticed public hearing and, prior to the public hearing, provide information to the public through the City's website regarding any proposed economic development subsidy. The Government Code 53083 also requires that within five-years of the approval of the subsidy, the City must prepare a new subsidy report (Attachments 1&2) that includes the original subsidy information plus net tax revenue and net number of jobs created by the subsidy. On March 3, 2020, City Council approved two separate agreements that were considered to provide an economic development subsidy.
At the March 2020 meeting, the City Council approved a sales tax sharing agreement with TACenergy, one of the largest national wholesale fuel suppliers in the country, with annual sales exceeding 2.7 billion gallons and more than $5 billion in revenue. During the term of the 25-year agreement, the City shares 50% of the sales tax generated by TACenergy.
The City has prepared the Five-Year Subsidy Report (Exhibit 1) which includes the following key points for TACenergy:
Public Hearing Five-Year Subsidy Reports
February 18, 2025
4 8
4 1
•The Agreement term is for 25 years (through December 31, 2045); •The City has retained $2,048,530 of total sales tax revenues; •The City has provided TACenergy with $2,048,530 of sales tax rebates; •A total of 20 full time jobs were added in association with the economic subsidy.
In a separate action, the Council approved a Disposition and Development Agreement (DDA) with THRIVE Santa Ana, Inc., for the development of a micro-farm at 1901 W.
Walnut Street and executed a 99-year Ground Lease. An economic development subsidy was provided since the property was appraised at $817,000.
The City has also prepared the Five-Year Subsidy Report (Exhibit 2) which includes the following key points for THRIVE Santa Ana Inc.:
•The Ground Lease term is for 99 years (through December 15, 2121) at $1 per month;
•Lost revenue was $817,000, the appraised value of the property; •Upon completion, property taxes are estimated to be at $1,500 annually; •Upon completion, the subsidy will create five (5) full-time jobs, 10 part-time jobs, and 10 temporary positions.
Since execution of the DDA, THRIVE has been working to develop a microfarm to grow and distribute fresh produce and ornamentals, and host weekly open-air markets and community activities that promote health at the project site. The site has been vacant for over 12 years and was acquired by the City in 2007. THRIVE has received all necessary permits and are very close to completing the project.
Economic Development Division staff continue to oversee compliance by each entity, ensuring that all requirements are met in accordance with the terms of their respective agreements. As required by law, a notice of public hearing was published and the Five- Year Economic Development Subsidy reports have been posted on the City’s website:
https://www.santa-ana.org/subsidy-reports/.
FISCAL IMPACT
There is no fiscal impact associated with this action.
EXHIBIT(S)
1. Five-Year Subsidy Report - TACenergy
2. Five-Year Subsidy Report - THRIVE Santa Ana, Inc.
3. Public Notice
Submitted By: Michael L. Garcia, Executive Director of Community Development Approved By: Alvaro Nuñez, City Manager