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Home My WebLink AboutMinutes - March 30, 2021 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, MARCH 30, 2021 An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, March 30, 3021, commencing at 7:00 a.m. Due to the COVID-19 pandemic and pursuant to Executive Order N-29-20, all Council Members participated in the meeting via teleconference and the meeting was available for viewing by the public via livestream at https://www.facebook.com/CityofLodi/ and https://zoom.us/j/93455719476?pwd=NDdhc1E4OEZyYWV3d2pDY1U5SjVZZz09; the opportunity for public comment was available through councilcomments@lodi.gov and https://zoom.us/j/93455719476?pwd=NDdhc1E4OEZyYWV3d2pDY1U5SjVZZz09. Present: Council Member Hothi, Council Member Khan, Council Member Kuehne, Mayor Pro Tempore Chandler, and Mayor Nakanishi Absent: None Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Cusmir Business Development Manager Astrida Trupovnieks provided a PowerPoint presentation regarding Grow in Lodi - a Development Prospectus. Specific topics of discussion included Executive Summary; prospectus content; Lodi development by the numbers - top business indicators and quality of life; employment breakdown; catalytic investments - industrial sector, Downtown retail and restaurants, Downtown offices, areas of City (northeast, east, and south), hospitality, and residential; market strengths; catalytic development opportunities - community college, affordable housing, key undeveloped sites, and business incubator for wine grape, food, and ag tech industry; Opportunity Zone (OZ) tax incentives; geography of OZ; geography of low and moderate income areas; housing geography of Lodi Development Zones; other development incentives for investors; opportunities in OZ; and recommendations to sustain business and stimulate growth. Pat Patrick, President and CEO, Lodi Chamber of Commerce, provided public comment. Mr. Patrick commended the City on hiring Business Development Manager Trupovnieks and spoke about the Chamber's investment in a website, www.growinlodi.com, used to market Lodi to businesses in the Bay Area. Mr. Patrick also spoke about direct marketing campaigns highlighting the benefits of doing business in Lodi. Mr. Patrick spoke about the role of the Chamber and its relationship with the City. Lisa Craig, member of the Lodi Chamber of Commerce and small business owner, provided public comment. Ms. Craig supported comments made by Mr. Patrick. Ms. Craig's family owns the Kettleman Station site and encouraged Council to focus on businesses already in Lodi and build on those businesses. Ms. Craig provided statistics on the employment business opportunities in Lodi. Ms. Craig spoke about the importance of technical trades. Ms. Craig spoke about the challenges associated with business incubators. Ms. Craig spoke about the Opportunity Zones and the tax credits that are not being utilized. A.Roll Call by City Clerk B. Topic(s) B-1 Presentation of Draft Grow in Lodi Development Prospectus (CM) 1 Council Member Khan spoke about the importance of being a "business friendly" city. Mayor Pro Tempore Chandler stated that he would like to see more resources made available in the Community Development Department to assist businesses. Council Member Kuehne said that there may be some issues that the City can address to help support new businesses and developers. Council Member Hothi spoke about the Chamber's Grow in Lodi virtual tour and spoke in support of being creative and innovative to attract businesses. Mayor Nakanishi spoke about the opportunity for development on the east side of the City. Mark Armstrong, General Manager, Lodi Grape Festival, provided public comment via email regarding the homeless individuals sleeping and congregating in Lawrence Park. City Clerk Cusmir read the email into the record. No action was taken by the City Council. The meeting was adjourned at 7:57 a.m. C. Comments by Public on Non-Agenda Items D.Adjournment ATTEST: Jennifer Cusmir City Clerk 2 Grow in Lodi A DEVELOPMENT PROSPECTUS Executive Summary •Lodi is an inclusive, growing, tradition-based city of 68,752 people (in a region of 762,148) •Lodi’s population has grown by 8.8 percent since 2010. •Lodi’s diversified economy, built on the wine grape, agriculture, manufacturing, healthcare, and logistics has created 10.2% job growth in 5 years. •More than $87.5 million public investment has been invested within the city limits between 2014-2022. •More than $502.4 million private investment has been/will be invested within the city limits between 2014-2024. •City has one Opportunity Zone and 9 New Markets Tax Credit-eligible Census Tracts. •City has its own Electric Utility. •City has its own Water and Wastewater Utility. •City has its own Police and Fire Departments. •Lodi has lower business license fees, property tax, sales tax and lower utility user costs than many California cities. 2 LODI -DEVELOPMENT PROSPECTUS LODI DEVELOPMENT PROSPECTUS CONTENT 3 LODI -DEVELOPMENT PROSPECTUS MARKET STRENGTHSLODI BY THE NUMBERS CATALYTIC INVESTMENTS OPPORTUNITIES RECOMMENDATIONS TO STIMULATE BUSINESS GROWTH JOB GROWTH is Up 2015-2020 10.2% STARTUP ACTIVITY Is Down 145 in 2015 to 20 in 2020 (Dun & Bradstreet) WORKER PRODUCTIVITY 2020 $100,479/per worker INNOVATION RATES 2015-2020 17.6 (US Patent Office) WAGE GROWTH 2015-2020 +10% LODI DEVELOPMENT BY THE NUMBERS LODI -DEVELOPMENT PROSPECTUS 4 TOP BUSINESS INDICATORS LODI BY THE NUMBERS EXPORTS MSA $5.6 billion ELECTRIC RATES ARE COMPETITIVE and RELIABILITY IS HIGHER 99.9948% TAX BURDEN RANK IS INCREASING 2014-#48 2020-#49 (Tax Foundation) BUILDING PERMITS ARE UP 12% (2015-2020) REGULATORY ENVIRONMENT 13 Weeks UPWARD MOBILITY RATES AVERAGE 19%(range 8.2 –42%) SMALL BUSINESS LOAN ACTIVITY 2017-2019 AT LEAST 34.7 Million 5 LODI -DEVELOPMENT PROSPECTUS TOP BUSINESS INDICATORS LODI BY THE NUMBERS GROSS REGIONAL PRODUCT $3.3 Billion 2019-2020 -2.6% AMOUNT OF VENTURE CAPITAL $13.87 Million (Pitchbook) ESTABLISHMENTS SURVIVING 5 YEARS Or MORE Is Up 2015-2020 3%(Dun & Bradstreet) PERCENT EMPLOYED IN ADVANCED INDUSTRIES 2020 7.2%(EMSI) POPULATION 25+ WITH ASSOCIATE’S DEGREES OR HIGHER 2020 34.24% POPULATION 25+ WITH A BACHELOR’S DEGREE OR HIGHER 19.2% 6 LODI -DEVELOPMENT PROSPECTUS Top Business Indicators LODI BY THE NUMBERS AVERAGE COMMUTE TIMES 25.1 minutes CAR COLLISION RATES 2015-2020 800 to 274 -66% LODI ELECTRIC UTILITY INFRASTRUCTURE SPENDING 2018-2020 $5.1 Million PUBLIC INFRASTRUCTURE SPENDING 2015-2020 $12 Million HEALTH CARE ACCESS 93.4% CRIME INDEX Is Lower 2015-2019 330.6-236.1 ROAD QUALITY 66 FAIR 7 LODI -DEVELOPMENT PROSPECTUS Quality of Life LODI -DEVELOPMENT PROSPECTUS 8LODI EMPLOYMENT BREAKDOWN 2016*2020**2016-2020 Growth 2016-2020 % Growth Agriculture, forestry, fishing, hunting and mining 1,798 159 -1,639 -91.0 Arts, entertainment, recreation, accommodation and food services 2,654 2,489 -165 -6.0 Construction 2,094 1,113 -981 -46.0 Educational services, health care and social assistance 5,858 8,325 2,467 42.0 Finance, insurance, real estate, rental, and leasing 1,294 6,656 5,362 414.0 Information 271 531 260 95.0 Manufacturing 2,756 3,498 742 26.0 Other services except public administration 1,766 1,392 -374 -21.0 Professional, scientific, management, administrative and waste management services 2,085 1,519 -566 -27.0 Public administration 1,473 1,040 -433 -29.0 Retail trade 2,930 4,408 1,478 50.0 Transportation, warehousing and utilities 1,551 757 -794 -51.0 Wholesale trade 725 1,284 559 77.0 TOTAL 27,255 33,171 5,916 21.0 * Home Facts.com ** ESRI CATALYTIC INVESTMENTS IN LODI Industrial Sector CEPHEID CENTRAL PLANT 9 LODI -DEVELOPMENT PROSPECTUS SF Added-174,145 Value Added- $250 Million Est. Start -2020 Est. Completion -2024 # of new jobs 2019 -1446 2020 -1662 2021 -2560 2022 -3513 2023 –3920 2024 -3956 Net Increase -2,510 Project Impact Area Industrial Sector SF Added-137,203 Value Added-TBD N Cluff Avenue-Potential Distribution Center Est. Start-TBD Est. Completion- TBD 10 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI LODI -DEVELOPMENT PROSPECTUS 11CATALYTIC INVESTMENTS IN LODI Industrial Sector SF Added -20,683 Value Added -$8 Million Completion 2022 Project Impact Area SF Added -16,000 Value Added -$1.2-$2.0 Million Retail-Complete Restaurant Completion-2021 12 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI DOWNTOWN RETAIL & RESTAURANT LODI -DEVELOPMENT PROSPECTUS 13CATALYTIC INVESTMENTS IN LODI DOWNTOWN OFFICE SF Renovated –5,500 Value Added –$1.5 Million Complete -2022 Existing Exterior Brick House SF Added -16,000 Value Added -$750,000 Completed 2019 14 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI DOWNTOWN RETAIL & RESTAURANT RECENTLY COMPLETED SF Added -16,000 Value Added -$750,000 Completed 2020 SF Added –8,500 Value Added -$3 Million Completed 2020 Highwater BrewingLodi Beer BOWLING SF Added -42,650 Value Added -$6 Million Complete -70 percent 15 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI DOWNTOWN RETAIL & RESTAURANT SF Added 6244 Value Added- $500,000 Est. Start-Late 2021 16 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI DOWNTOWN RETAIL & RESTAURANT THE BOXCAR THE LAKEHOUSE MIXED-USE -Hospitality -Condo Hotel-100 guest rooms Conference Space Restaurant 17 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI MIXED-USE -Hospitality -Condo 150 residential units One BR-60 Two BR-80 Three BR-10 NORTHEAST MIXED-USE -Hospitality -Condo Value Added-$65 Million Environmental Underway Groundbreaking-2022 SUNSET ON THE AVE 18 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI EAST ENTERTAINMENT -Theater -Retail -Outdoor Venue SF Added-20,775 Value Added-$5 Million Completion 20-24 Mo. BANK OF STOCKTON RETAIL -Bank -Restaurant SF Added-4,000 Value Added- $700,000 Complete 19 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI SOUTH KETTLEMAN STATION FAÇADE RETAIL RENOVATION -Bank -Restaurant SF Renovated-46,000 Value Added-$1-2 Million Est. Completion 2021 20 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI SOUTH RAISING CANE’S RETAIL -Casual Dining Restaurant SF Added-3000+/- Value Added- $1.35 Million Est. Completion-2022 21 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI TRU HOTEL BY HILTON # Rooms-79 Added Value- Est. $6.7 million Est. Start TBD Hospitality Marriott Residence Inn # Rooms-84 Added Value- Est. $13.4 Million Est. Start-TBD LODI -DEVELOPMENT PROSPECTUS 22CATALYTIC INVESTMENTS IN LODI Residential The Benjamin CLUBHOUSE 108 Multi-Family units 48 -Two BR 1090 sf 36 -One BR 820 sf 24 -One BR 655 sf 3000 sf Clubhouse with Pool North and South Entrance Natural Space Value Added $30 Million Est. Start -mid 2021 Est. Completion –2023 (18 months) Applicant’s Third Market Rate New Multi - Family Development LODI -DEVELOPMENT PROSPECTUS 23CATALYTIC INVESTMENTS IN LODI Residential LA VIDA SENIOR 150 Multi -Family units Clubhouse OAKMONT SENIOR 80 Assisted Living units Facility Value Added-$10 Million Amenities -Bocce Courts -Putting Green -Pool -Gardens -Outdoor Gathering Space Value Added-$28 Million 24 LODI -DEVELOPMENT PROSPECTUS CATALYTIC INVESTMENTS IN LODI Residential Total of 2101 new units VAN RUITEN RANCH (265 Single Family units) VINEYARD VALLEY (686 units)* ROSEGATE 2 (350 Single Family units) GATEWAY NORTH (250 Single Family units) GATEWAY SOUTH (550 Single Family units) Phase One-223 units Phase Two-347 units Phase Three-116 units Total-686 units Greenspace-20.2 AC Est. Developer Cost for Public Improvement $4.8 Million (Phase One) * Contingent on annexation Est. Completion-2022-2023 Est. Developer Cost for Public Improvements $6.7 Million Est. Start-2021 Est. Completion-2023 Est. Total Developer Cost for Public Improvements $26 Million Est. Start-2021 Est. Completion-2023 Est. Developer Cost for Public Improvement $18.3 Million Est. Start-2021 Est. Completion-2024 Est. Developer Cost for Public Improvement $12.7 Million Market Strengths Job Growth Pre-Covid Unemployment-5.4% Current Unemployment-8.1% Recent Job Growth-2.2% 3 Yr. Job Growth-6.5% 5 Yr. Job Growth-10.2% Future Job Growth-34.3% Transportation Strategically located between I-5 and SR 99 19.9 miles from cargo-centric Stockton regional airport 45.9 miles from Sacramento international airport 17.3 miles from Port of Stockton $39.3 Million Exports loaded from Port of Stockton Jan. 2021 Served by Union Pacific Railroad Reliable Power Governed locally 131 MW Peak Demand 413 GWH 16.9 cents/KWh Average Rate 13% lower than neighbor utility 14 square mile service territory 99.9948% reliability Low wildfire threat 25 LODI -DEVELOPMENT PROSPECTUS Market Strengths Affordable Water Governed locally Plentiful, extraordinarily high- quality water 60% Excess capacity 29.0 million MGD system capacity 11.7 million MGD daily demand 21.0 million peak MGD (summer) Workforce & Skill Building Initiatives At least 12 staffed/funded institutions Delta College San Joaquin WorkNet Delta Sierra Adult Education Alliance Health Force Partners TDL Partnership San Joaquin Building Trades Council IHUB Code Stack Academy More Local Industry Leaders Laboratory Analytical Instruments -Cepheid Consumable Laboratory Products -Scientific Specialties Plastics Product Manufacturing -Dart Container Plastics Materials and Resins -North American Specialty Products Food Producers -Pacific Coast Producers 26 LODI -DEVELOPMENT PROSPECTUS Attract a Community College Marriage between industry, community colleges, and career and technical education is real CATALYTIC DEVELOPMENT OPPORTUNITIES 2018/2019 $572.3 Million Total income added to region annually 1.4 %Of region’s Gross Regional Product 6,897 Total job equivalents supported in the region 2018-2019 For every $1 spent by students: Students gain $4.70 Taxpayers gain $1.20 Society gains $8.80 LODI -DEVELOPMENT PROSPECTUS 27 Operations Spending Impact College payroll provides $91.2 million added annual region income Student Spending Impact Retained Student Spending $11.9 million added annual region income Alumni Impact Higher alumni earnings & Increased business profit $469.2 million added annual region income LODI -DEVELOPMENT PROSPECTUS 28 Marriage between industry, community colleges, and career and technical education is real CATALYTIC DEVELOPMENT OPPORTUNITIES Attract a Community College 29 LODI -DEVELOPMENT PROSPECTUS CATALYTIC DEVELOPMENT OPPORTUNITIES Attract Quality Affordable Housing COMMERCIAL LODI -DEVELOPMENT PROSPECTUS 30CATALYTIC DEVELOPMENT OPPORTUNITIES Promote Development of Key Undeveloped Sites 1235 E Kettleman 1335 E Lockeford 1430 & 1600 Cherokee Lane930 Beckman Rd 699 & 775 N. Guild Ave LODI -DEVELOPMENT PROSPECTUS 31CATALYTIC DEVELOPMENT OPPORTUNITIES Business Incubator to Accelerate Wine Grape, Food and Ag Tech Industry 1235 E Kttlman 1335 E Locfrd 1430 & 1600 Cherokee Lane930 Beckman Rd Opportunity Zone Tax Incentives Temporary Deferral A temporary deferral of inclusion in taxable income for capital gains reinvested into an Opportunity Fund. The deferred gain must be recognized on the earlier of the date on which the opportunity zone investment is disposed of or December 31, 2026. Legislation pending to 2028. Step-Up In Basis A step-up in basis for capital gains reinvested in an Opportunity Fund. The basis is increased by 10% if the investment in the Opportunity Fund is held by the taxpayer for at least 5 years and by an additional 5% if held for at least 7 years, thereby excluding up to 15% of the original gain from taxation. Permanent Exclusion A permanent exclusion from taxable income of capital gains from the sale or exchange of an investment in an Opportunity Fund if the investment is held for at least 10 years. This exclusion only applies to gains accrued after an investment in an Opportunity Fund. The Opportunity Zones program offers three tax incentives for investing in low-income communities through a qualified Opportunity Fund. 32 LODI -DEVELOPMENT PROSPECTUS The tax cuts and jobs Act has established new Internal Revenue code Section 1400Z-Opportunity Zones Four Parties: Taxpayer Qualified Zone Opportunity Fund Projects (Property & Businesses) Different Than Other Tax Credits: More market-oriented Residential, commercial real estate, and business investments No benefit cap Return can be massive OZ eligible for other incentives More Lodi areas eligible for incentives OPPORTUNITY ZONE TAX INCENTIVES LODI -DEVELOPMENT PROSPECTUS 33 GEOGRAPHY OF LODI OPPORTUNITY ZONE ZONE LODI -DEVELOPMENT PROSPECTUS 34 Opportunity Zone Jobs-2338 Top 3 Industries- -Light Manufacturing & Industrial -Warehousing -Fruit & Vegetable Processing SF Undeveloped Land-73,767 ( 6 lots) Average HH income-$45,644 Median House Value-$217,600 Owner Occupied-28.6% Renter Occupied-71.4% Vacant-6.0% Businesses SF-6.9 million Residential SF-3.4 million Total Assessed Property Values-$198.2 million GEOGRAPHY OF LOW & MODERATE INCOME AREAS* **# OCCUPANTS/ UNIT MEDIAN INCOME MEDIAN RENT Low-Mod 3.27 $42,599 $1,006 CITY 2.81 $67,484 $1,118 COUNTY 3.17 $68,997 $1,208 *ESRI-based 2020 CENSUS Bureau **San Joaquin Housing Authority 2019 35 LODI -DEVELOPMENT PROSPECTUS **HUD PROJECTS SECTION 8 VOUCHERS TAX CREDIT PROJECTS Low-Mod 0 149 0 CITY 0 149 0 COUNTY 986 4198 57 HOUSING GEOGRAPHY OF LODI DEVELOPMENT ZONES OPPORTUNITY ZONE (2019) *ESRI-based on 2010 US Census Bureau 36 LODI -DEVELOPMENT PROSPECTUS % Rental Vacancy Rate % Rental Units % Owner Occupied units #Senior Housing # Low- income units # Substandard Condition units Over- Crowding OZ 7.8%*71.4%*28.6%*0 0 13 n/a CITY 1.5%47.5%52.5%120 307 78 10.3% COUNTY 3.6%43.4%56.6 %n/a 1688 n/a 8.6% % Spend > 30 Percent of income Housing Affordability Index Median House Value OZ n/a 117 217,600 CITY 36.9%97 361,000 COUNTY 38.8%99 390,000 OTHER DEVELOPMENT INCENTIVES FOR LODI INVESTORS New Market Tax Credits Investors provide capital to community development entities in exchange for tax credits against federal tax obligations. -Retail and mixed use -Manufacturing and food processing -Logistics -Residential -Hotel Affordable Housing Tax Credits California State Housing Agencies award credits to build/rehabilitate affordable rental housing -Developers find investors who use tax credits/other tax benefits -4% ( equates to 30% of costs -9% (equates to 70% of costs) Manufacturing -California Manufacturing Sales Tax Exemption -California Competes Income Tax Credit -Research & Development Income Tax Credit -New Employment Tax Credit Food Production Investment Program (competitive grants) -more 37 LODI -DEVELOPMENT PROSPECTUS What are the opportunities in OZ? Homeownership Quality Affordable Housing Increase Multi-Unit Quality Rental Investor-Driven Financed by: Housing Tax Credits Equity Debt Small Business 38 LODI -DEVELOPMENT PROSPECTUS Shared Equity Homeownership •Cooperative Building Ownership •Limited Equity Cooperatives •Community Land Trust •Create Small Business Development Center •Develop Business Incubator •Develop Broadband Fiber •Revolving Loan Fund for small business •Façade/Safety Grant RECOMMENDATIONS TO SUSTAIN BUSINESS AND STIMULATE GROWTH Rebuild and Expand Broadband Fiber Annexation to Increase Supply of Commercial and Industrial Development Land Explore Sales Tax Sharing Agreement to Stimulate Growth Expand exports Accelerate Wine Grape, Food and Ag Brand/Establish Business Incubator in OZ Establish a Small Business Development Center in Lodi Establish a Small Business Revolving Loan Fund Accelerate Brownfield Program to include Feasibility Studies, Cleanup and Demolition Obtain Better Access to Data for Interested Investors 39 LODI -DEVELOPMENT PROSPECTUS