Five-Y
ear Economic Development Subsidy Report
Pursuant to Government Code Section 53083
For
a Sales Tax Sharing Agreement between the City of Santa Ana and TACenergy at 4 Hutton Centre, Ste 700, Santa Ana, CA
Pursuant to Government Code Section 53083, the City Council of the City of Santa Ana must hold a noticed public hearing and, prior to the public hearing and within five-years of approval of the subsidy, provide all of the following information in written form and available to the public through the City’s website regarding a proposed economic development subsidy provided by the City pursuant to a Sales Tax Sharing Agreement between the City of Santa Ana and TA
Cenergy (Agreement). Notice was published
on the City’s website for a public hearing to be held on March 4, 2025 The purpose of this report is to provide the information required pursuant to Government Code Section 53083 in regards to the Agreement. This report shall remain available to the public and posted on the City’s website until the end date of the economic development subsidy, as further described in number 2 below. (1) The na
me 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.
The
Agreement is with TACenergy, who owns and operates the existing business that will benefit for the economic subsidy:
TAC
energy
4 Hutton Centre Dr, Ste 700
Santa Ana, CA 92707
(2) The s
tart and end dates and schedule, if applicable, for the economic development subsidy.
Upon Ci
ty Council approval, the proposed agreement commence d on April 1, 2020, and ends on December 31, 2045. The economic development subsidy be paid quarterly within thirty days of receipt from TACenergy of the required documentation per executed Agreement.
(3) A
description of the economic development subsidy, including the estimated total amount of the expenditure of public funds by, or of revenue lost to, the local agency as a result of the economic development subsidy.
The ec
onomic development subsidy is equal to f ifty percent (50%) of the sales tax received by the City quarterly, for each year, during the 25-year agreement period.
No expenditure of public funds is anticipated by this agreement.
EXHIBIT 1
(4) A statement of the public purposes for the economic development subsidy.
On August 5, 2013, the City Council approved the execution of a sales tax sharing agreement with IPC (USA), Inc., an independent wholesale distributor of gasoline, diesel, jet fuel, and other refined petroleum products throughout the United States.
The Agreement provided for a 50 percent sharing of local sales tax generation, plus a 70 percent (IPC) and 30 percent (City) sharing of additional sales tax generation above $1.4 million dollars. On November 1, 2019, IPC (USA), Inc. was acquired by TACenergy, one of the largest national wholesale fuel suppliers in the county, with annual sales exceeding 2.7 billion gallons and more than $5 billion in revenue.
Since the agreements execution, IPC has been a top ten sales tax producer for the City. This sales tax generated is directly deposited into the City’s General Fund which is primarily used to fund police, fire, homeless reduction, and parks and recreational services for the City’s residents.
Without this agreement, several of the City’s general services may be cut or reduced for its residents.
(5) The net tax revenue accruing to the local agency as a result of the economic development subsidy.
Since the commencement of the Agreement, $4,097,060 in total sales tax has been generated by TACenergy. The City has retained 50% of that amount: $2,048,530.
(6) The net number of jobs created by the economic development subsidy, broken down by full-time, part-time and temporary positions.
The Agreement has retained approximately 20 positions. The company has reported that challenges arising from the COVID-19 pandemic, along with regulatory changes at both the Federal and State levels, have impacted the fuel sales sector. However, their overall growth has aligned with the broader trends in transportation fuel demand, and it is expected that further hiring will take place in the near future.
EXHIBIT 1