10-01-2019 Jt Reg Mtg Agn - Laserfiche WebLink

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Staff Report to the Mayor and City Council Public Benefit Agreement - South 215 Gateway Sign (Continued from 7-16-19 & 8-20-19) October 1, 2019 Page 2 The applicant and his representatives met with Development Services and City Attorney staff to discuss the remaining areas of disagreement. These areas include the term of the Agreement and related renegotiation issues, and the amount of the public benefit payment. The following is a summary of discussions and tentative agreement on the terms:  Term. The originally proposed agreement had an initial term of 10 years, with possibility of two 5-year extensions. Staff is recommending increasing the initial term to 20 years with the potential for two 5-year extensions that will trigger renegotiation of the public benefit agreement, including the amount of payment to the City. Staff is also recommending adding a provision that renegotiation would occur at year 10 if the applicant is no longer the owner of the sign. If no agreement is reached on a renegotiated public benefit fee, the gateway sign must be removed.  Public Benefit Payment. The originally proposed agreement required an annual payment of $70,000 or 30% of gross annual revenue, whichever is greater. The applicant objected to the 30% of gross revenue. Staff and the applicant have reached tentative agreement on two alternatives, either: o A flat $100,000 annual payment; or o The greater of $80,000 (annually) or 15% of annual gross revenue, whichever is greater. Staff is supportive of either alternative as the anticipated gross annual revenue for a billboard at this location (With consideration of the 155,000 daily vehicle count on this segment of I-215, gross annual revenue is anticipated to be in the range of $800,000 to $900,000 per year). Under either option, the payment amount would be adjusted every 5 years by the average CPI (consumer price index) over the previous 5 years for the initial 20-year term.  Agreement Expiration. Although not under previous dispute, the applicant has agreed to include an expiration date on the agreement (12 months with a 120-day extension) if Club 215 has not closed by the expiration date and construction of the market/fuel sales project are completed and a Certificate of Occupancy issued within that timeframe. ISSUES/ANALYSIS The following is a list of changes made to the Agreement since the last Council meeting, which are incorporated into the attached Draft Agreement:  Proposed changes to Section “7. TERM OF AGREEMENT.” o In first paragraph, replace “ten (10) year period (“Original Term”)” with “twenty (20) year period (“Original Term”)”. 1.1 Packet Pg. 8