Recommendation to receive a report on incentives to encourage small business recruitment, retention and growth and approve the recommended Incentives for Small Businesses Program; and Request City Attorney to prepare any necessary documentation to implement the Program. (Citywide)
Item 13 is a report from financial management. Recommendation to receive a report on incentives to encourage small business recruitment, retention and growth. And approve the recommended incentives for small businesses program. And require city attorney to prepare a necessary documentation to implement the program. Thank you. I think I have a motion by Councilwoman Pryce in a second by Councilwoman Mango. I'm going to turn this over to Councilwoman Pryce. I'd like this motion to direct the city attorney's office to prepare this in the form of an ordinance, if that's possible. Mr. PARKIN. Is that possible? Mayor. Councilman. Councilwoman Price. Yes, it is possible. We we initially drafted this and I'll let Mr. GROSS speak to it, but it seemed like there were some various options. And so when we brought it to council, I wasn't we weren't sure on which direction to take. You could come in the form of administrative policy, a resolution or an ordinance. So depending on the direction of the Council, we could work with staff and prepare it. Okay. Thank you. And I'll turn this back over to the councilwoman. Thank you. And Mr. Parkin, in terms of one of the things that I think we've been kind of interested in is what the impact of this was going to be. So we wanted to bring it back at some point so that we could see, you know, how many businesses have taken advantage of this incentive package, what that cost has been. How would that impact an ordinance if we were to go that route? I don't see the requirements to report back or the reporting requirements would necessarily be included in the ordinance itself. I think once the incentive program is is flushed out and we put it in the form of an ordinance in some format, I think direction from council staff could direct, it could be directed to come back at appropriate periods of time to report. Okay. And so with that, you know, I'd like to modify my motion, if that's possible, to request the city attorney to come back with an ordinance that puts this incentive package, has all the components of this incentive package, and to have it come back to council in six months for a review of Mr. GROSS, do you think that's a reasonable time period? I think six months for the preliminary review. It may take a bit longer to get a full report because the program needs a start up time. What. Councilwoman Price? I think if you're talking about six months, if we come back with a proposed ordinance, it will come back, of course, for first reading, second reading. And then approximately 31 days after the mayor signs, it'll go into effect. So the six months following the effective date of the ordinance is that. Let's do one year, give us some more time to collect data. So that would be my motion. I want to thank John GROSS, his office, for putting this incentive package together and for helping us come up with ways that we can assist small businesses by giving them some incentives for growth and establishment in the city of Long Beach. I do want to request that this particular ordinance, once it's drafted, be forwarded to our new Economic Development Commission so that they can work within the parameters of this ordinance to figure out how to market it and make it a practical reality for businesses, both those who are currently in existence and may be looking to expand their operations, or those wishing to relocate to the city of Long Beach who might qualify for an incentive so they can work with this ordinance to come up with a marketing strategy and a plan by which business owners are advised of these opportunities. But we don't want to have is is a policy that is not really being utilized or many business owners are unaware of or an ordinance. So that would be my recommendation as well. Thank you. Thank you. And so. Mr. Parking Mayor, members of council, if if there was if I could clarify. So the direction now is for the city attorney to prepare a draft ordinance for review by the Economic Development Commission prior to coming back to the City Council for first. To, you know. Clarify the direction would be for the city attorney's office to prepare a draft ordinance that would come back to council. The Economic Development Commission would then have the ordinance once it's been approved by council, and they would have, at our request to review this ordinance, to review this incentive package and come up with strategies and and methods of marketing it and making it known to the business community so that they could take advantage of the incentive program. Great. That's a great idea. There's a I think the motion is clear. I'm going to go to Councilman Mongo and then the speaker's list. I'm sorry. Councilman Price, were you all done? Okay. Councilman Mongo. I just want to give extreme thanks to the staff and the EDF Collaborative Committee, and this ordinance demonstrates to our businesses that Long Beach will take the steps to become a leader in supporting our local businesses and incentivizing them to grow more jobs for our residents. And these are the types of programs, along with the appointment of the Economic Development Commission, that really will go a long way in demonstrating to businesses that we're a new council. We're here to be business friendly. Long Beach is the place you want to come to partner. And Long Beach is the place you will grow and strive as a business so long as we know that. This business ordinance will be an incentive to help all businesses, and it will not infringe upon any of the incentives or requirements of our local business improvement district or any of the other programs we already have in place that are very successful in supporting our businesses. Thank you, Councilmember Richardson. Thanks. And I want to I want to give some credit, some accounts to my fellow colleagues for bringing this forward. This is outstanding. I've seen as a number of folks have discussed and talked about doing something like this, but to see it in this format and know that we're moving forward, it's it's it's a good thing. Just a couple of things to note. So just on the on the incentive for renovation discussion and construction for small businesses, it says that this would only work for businesses if it if it's a construction cost of above 40 $500. So. So if someone wanted to let's say that they were in a not in a CDBG eligible area and they wanted to improve their facade and it might not cost 40 $500. I think this should be a good incentive for those folks. So we can't use CDBG dollars for. So I want to talk through that piece a little bit. So so how would that work? And is this something I mean, so, Mr. City Attorney, is it true that only it would have to be 40 $500 or above for for a facade project? Mr. GROSS. I think I might be able to get the gross. The program, as written, is intended to say that if there is a permit pulled for any work that exceeds 40 is 40 $500 or higher, they will be eligible for this incentive period independent of any other program. Okay. I would ask with the makers of the motion, be interested in a just in that down some I think some of the small businesses, particularly in Artesia, they don't have we don't have the redevelopment and some of them aren't in CDBG eligible areas anymore. So we always find ways to just help them get open and get their sign open and all that so we can take it down on the $2,000. I'm okay with that. But I just want to make sure with Mr. GROSS that that doesn't put our fiscal impact. Well, I'll get to that. That's my next. Estimate of that doesn't skew it too much. And the amount is is a scientific guess. And certainly I think more people would be eligible, but I think it would be up to council. I think we could live with a slightly lower amount. Yeah. Most of these projects are not going to reach $5,000. They're going to be 2500 to 4, 2500 to $4000. So this just means that we will be able to use that. This will be another tool and tool in the tool kit for small businesses. So you go with that friend. I'm okay with that. I think Councilwoman Mongo had some ideas, too, on that. I still got the floor. Well, we're the makers of the motion. Yes, we were. When I was thinking through the original incentive. One of the benefits is if you were looking at doing an an improvement project and it only cost $3,000, you'd maybe go the extra mile to do it above and beyond to the top level to then be able to be eligible for the incentive. Does that change any of your thoughts? I mean, what does a typical improvement project cost? I mean, traditionally so if we so a lot of times we use the $2,000 rebate as incentive for people to do anything. To the front of their operation. In some areas, this is not available. So sometimes just the the the mere incentive is enough for them to actually take a look and say, hey, this is worth a few thousand bucks. So are you saying that if it was a $2,000 project, we'd pay for it completely? Or are you saying that if it didn't qualify for the full 4500, that we would incentivize it by paying for half? No, I'm just saying the same program this year. All the way down to. 2000. We take it down to 2000. Is that a 4500? Do you have an estimate of how many you think are going to apply for that? Just so we are thinking the fiscal. Our director of financial management has said this entire thing is a scientific guess. Right. I'm not going to try to guess more science. Okay. So and then the next thing on fiscal impact, I see maybe three or four sentences down. It says, because of improving economy and the low impact of the cost of this program, it's believed that there will be enough on budget at one time revenue to fund this balance, this program for the balance of 2015, subject to the impacts associated with the decline in oil revenues. So I guess my question is, since we had the conversation about on budget at one time revenue last week, was that considered? Here were the funds that we allocated last week, the funds that we're talking about here. Yeah. We think we're okay with this, even with the allocation of funds. So we have mystery money. But what we're saying here, council member, is that we believe and we're still working on the projections, but we believe that the revenues and FY15 will have will likely have enough surplus there. They are moving in a positive direction to cover this relatively small amount. In terms of our overall revenues. Great. Thank you very. Much. You're welcome. Okay. Thank you. And just just to clarify, also a question for myself on this, on the last conversation that happened, if staff can remind me the. The community block grant amount with the eligibility that the maximum is at 2500 or is it two? It's 2000. And remind me what the signage grant that we already provide that 2000 or 2500. I believe they're both 12. So they're both 2000. So so it's a total of 4000. If you are in a community, if you are in one of the zones, you can receive up to 4000. Is that correct? If you do signs and a facade, if you. Decide a facade, you can proceed with the four, right? No. Well, I thought that was the case. So you get so the sign facade program is the same. It's the same program. So you don't have to spin on a sign. You can use it on a facade. You can get 4000 if you're a new business, the property owner can get 2000. And that's exactly that's exactly okay. That's what I was trying to remember with. So the property owner and the business can both join the 2000. Okay. So let me let me go. There's a like a storefront with. No, get it. Yeah. Yeah. Okay, so let me go to city staff. Did you have an additional comment on this? Yes, Mayor. Councilmembers were incredibly excited about this program. We just heard about the ordinance aspect of it tonight. So that has a different aspect. So our thoughts might be we don't know how this is going to roll out. Just tonight, you can see we're talking about 4500 to 2000. Once you make an ordinance, you're stuck. That's it. And I'm just thinking, Mr. GROSS commented that earlier, maybe this could be like a six month or one year pilot program if the council chooses to the ordinance who were hoping, perhaps give it a sunset in a year and then the Economic Development Committee could adjust it or the council could adjust it and give them more of an opportunity to play with this as opposed just simply to market it. But our concern is once it goes in ordinance, we're not going to have the ability to tweak it if indeed what we're proposing needs to be tweaked. If you what you could do is have a sunset having to renew the sunset, which we've done before. It'd be up to the makers of the motion, though. I think that's a great idea if we sunset it. But I'm just trying to think about the date. Would we would ideally a year out. Six months or a year we're comfortable with either. Or in line with the fiscal year. It could be fiscal year. Whatever works for the council, I would recommend the fiscal year. Okay, let's do that then. Okay. Thank you. Let me go down the speaker's list. Vice mayor of Louisville. Thank you, Mr. Mayor. I wanted to thank the staff as well. I'm very supportive of the program and in the conversation we just had, and I apologize if I missed it. Of the 200,000 or less required for implementing the program, did you determine how much would be set aside for the incentives? Does that? I don't mean the individual incentives that we just talked about, but in total. 200,000, the entire amount. Okay. Okay. And then. If we're doing. Was it just decided that we're doing the ordinance route or sunsetting through the ordinance? Correct. Okay. And then at the time when the ordinance comes back, are you expecting any kind of a report from staff? It's part of the motion. Yeah. Okay. Thank you. I appreciate that. And then. The challenge always becomes how long does it take for someone to go through the process? And so. Do you have an established time frame? For applications and how long will that take? And the and let me just add a caveat. We had great incentive programs that a lot of our quarters took advantage of years ago through the Neighborhood Resource Center. And and I think some of it became a staffing issue and really a challenge in processing the number of applications that came through. And then it also became a resource issue. And that might not be relevant with this, but. If we're asking council offices as well as others to let people know about this opportunity, I think we want to be able to manage expectations as well. The committee charged staff with making this a very simple process. And we believe that the application process will be simple and quick. There are not a lot of requirements. The forms that are required or the information that is required is minimal. There are very few and in the way of tests. So in working with the city attorney to convert this to an actual program that you would adopt, I don't think we will need additional staff. That's just a guess and I don't think it will take very long. So, meaning the process, I suspect is submitting a form, looking at a permit, construction permit. It will be a simple process. Okay. Thank you. That's it, Mr. Mayor. Thank you, Councilmember. Thank you. And I think the city manager opined in on my major concern, and that was just the ordinance approach, thinking that that would lock us in. I do want to compliment Councilmember Price and Mongo for thinking out of the box and their efforts since they've been on this council to to really try to turn around that image and to make Long Beach business friendly. I think. And in making this a pilot program, this also affords the economic new Economic Development Commission the ability to to to vet this as well and make further recommendations to make the program even more responsive to our small businesses throughout the city. So with those comments, I'm prepared to support this and look forward to a report back from the Economic Development Commission as well as staff in in a year or so. Thank you, Councilwoman. Thank you, Mr. Mayor. I did have a couple of other points that I just wanted to clarify. It was not the intent behind this legislation for this any sort of business license incentive to apply at all to the bids. And I just want to make sure staff is on board and agrees with that. That's everybody's understanding. That's correct. Okay. And then the other thing is and this was an issue that was pointed out to me, and I think it's a good one in terms of the incentive to create jobs. How is it that we're going to, you know, fact check? Is that kind of a an honor system in terms of how the information on number of employees is presented to us? I imagine if they want to qualify for the incentive, they're going to have to report an increased number of employees than the subsequent year. They'll have to pay the fees associated with that increased number of employees unless they've terminated or downsized. Is that correct? That is correct. And just as a clarification, so there's no misunderstanding on the bids. There is the the businesses that are in the bid will qualify for this incentive. That's so it's all a positive thing. There are no cost to the bid or no revenue reductions to the bid, but the businesses there will qualify. Great. And then and then in terms of the the the headcount on the employee, the number of jobs created and such, I imagine that it would not be in the best interests of the business to report a higher number than they actually have, because then the subsequent years after the year, the incentive they'd be responsible for any fees associated with that number of employees. That is correct. And we will be using what they certify and report to us. It'll be a simple process. Okay. I know that the Economic Development Commission is going to look at some of the marketing concepts and really look at this as an item that they're going to try to make practical. But in terms of our business license department, do we have any immediate plans for how we're going to promote this new incentive package to existing businesses or any new businesses? Are we going to send a letter? Are we going to give anything out at the counter? Are we going to post that on our city's Facebook page? Do we have a small business, you know, email list that we can go to? What are we going to do to let people know that this isn't an opportunity for them to take advantage of in the coming year? We're still working on that, but the immediate things are notifying people in the counter and having signs and verbal notification website and we may put together, but it'll depend on what the commission says. It may be that a brochure is appropriate at the very least. So I think all of those things. Thank you, Mr. GROSS. Thank you. And now do it, Mr. Park. Jiffy. I did a mayor member of the council just on the change to the ordinance under the incentive amount. If I. If it was accepted as a friendly amendment to reduce the 4500 to $2000. And then the second part of that sentence talks about or construction exceeds $9,000. Would there be a subsequent change to that dollar amount or does that remain at $9,000? I wasn't contemplating a change, but I'm open to that. If Councilman Richardson feels that that would help the businesses in his district. We certainly can look at modifying that. So this is if the the incentive amount equal to the total amount of one year of the business license if the total value of the renovation exceeds 4500. So then that would change the 2000 or an amount equal to two years the business license tax if the total of the renovation exceeds 9000. I know that seems kind of redundant. If the total value exceeds 4500 or over two years, if it exceeds 9000. I mean, the whole idea is if you want to break it up over two years, it has the. No, the the intent was to at a certain level, I'll use the original intent at 4500, you got a incentive equal to one year of the business license. If you spent $9,000, you could break it up over time. You can bring up two years of worth of incentive. You double the incentive amount. So the so you can only do it up to two years. Yes. Yes. The VAT a value equal to two years. So right now you have a one you have an incentive equal to one year of the business license fee at $2,000. And then you have to go to $9,000 to get the second year. Hmm. So. So I think the spirit of it, I think the spirit of what you wanted to do was just double the number. Is that the general spirit of what you wanted? That was the original intent. It will make sense for it to be if we're going to 2000 and it should go to 4000. It's only. I'm okay with that. I mean, honestly. If that's the spirit of it, it seems like it's just the right thing. I agree. And just to be clear, because I think there's some comments, we're not like paying for people's remodel. We're not you know, we're not giving away money. It's they're they're getting their business license fee waived for one year. It's not like we're doling out money. So. Okay. Great. Councilmember Austin. Yeah. So just one point. Mr. GROSS, you said this would the implementation would be under $200,000 annually. Is there any appetite from the council to to to kind of codify that, to make sure that we don't kind of lose control of this, you know? Maybe capping it at $200,000. I think that seems reasonable. Mr. GROSS, would you prefer that we do that? Because I know this is just an estimated guess based on we have never had anything like this before, so we're just guessing on what the the fees would be. I imagine that at some point, if it exceeded 200,000, you'd come back to us and tell us there was no money. I think that's what we prefer to do, is to come back and report to you. And I'm okay with that. If council is okay leaving it at that, it's somewhat fluid and I think we need to allow the program to be somewhat fluid and not really set any hard parameters at this time. I imagine that city staff will come back to us if they are in a position where they're concerned about resources to be able to cover this incentive package. Well, I just I'm okay with that. I just know this is going to be tremendously successful. And so, you know, the expectation was 200,000. But if it comes back and it's 1.2 million, don't be surprised. Well, I'm hoping that Mr. GROSS is willing to be a little bit flexible and allow it to go to maybe to 20 to 30 to 50. You know, somewhere around that number can help out a couple of extra businesses there, I think. Thank you, Councilman Richardson. I think in the same spirit, I know there was a conversation about doing a bunch of outreach for these. And I would just just as a note, just I think when I think of a pilot, I think of it being sort of targeted outreach, like maybe partnering with the bids and things like that. So we know what we're up against before we go out with the big push. So just a word of caution like, you know, we we've done pilot, I've seen pilots before and they weren't they didn't work out the right the way you anticipated they that they work out. So I would just say maybe this first six months or however long we're doing this pilot, maybe we should just be targeted about our outreach. Thank you. I think that is the entire speaker's list. Councilman Mongo. I would hope that in our outreach that we all put it in our newsletters. I know that in my district, the areas of business that struggle the most are the ones that actually can't get a bid together yet. And we're working together to get that bid in place. But we need to really reach out to all our struggling businesses, especially the ones that don't have the benefit of a community of business leaders together. And hopefully they'll see this as the type of thing that will hopefully coalesce them into a reasonable community. But thank you for the ideas. Okay. Thank you. That is all for the item. Is there any public comment? Please come forward. Good evening, Mr. Mayor. Members of the City Council, Craig Cogen. And this evening I'm representing the Council of Business Associations, and I want to thank Councilmember Price and Councilman Mongo for bringing this item forward. And thank you to Councilmember Price for meeting with us yesterday, Blair and I yesterday to talk about this issue and some of the specifics behind this proposed ordinance. And I'm I guess I'm happy to hear that we are moving from an ordinance to. Is this an administrative policy? No, it's not. So it is remaining an ordinance, a temporary ordinance. Mr. Cogen It's an ordinance with with a sunset at one year that will renew at the fiscal year. Okay, great. So what we'll look forward to and especially after the commission has a chance to review it, but using the Council Business Association as a conduit, as an outlet to its potential businesses as well as its existing businesses, to market this project and market this resource heavily to. Its. Stakeholders as well as its potential business owners. Because I feel as though that we could do a tremendous amount of good to notify these stakeholders and be able to allow them to take advantage of this resource, but at the same time review the measurable results and to make sure that it's meeting our reasonable expectations established at the outset. Okay. Thank you very much. Thank you. Next speaker, please. Good evening, Mayor. Council Members Jeremy Harris, Long Beach Area Chamber of Commerce. I would just echo what Mr. Craig Cogen has already stated and said that the chamber stands willing and ready to assist with that marketing push and be a communicator for other council members. Thank you to the leadership to Councilmember Price and Councilmember Mongo for bringing this item forward as well. Thank you. Thank you, Jeremy. At sea. No other public comment. We will go out and take a vote. Members, there's a motion on the floor. Members, please cast your votes. Motion carries seven zero. Great. And I want to want to congratulate the committee. I want to congratulate Councilwoman Pryce and Councilman Mongo for putting this on the agenda and kind of moving it forward. I think it's really great for the city and also staff. Staff. Actually, we also worked pretty hard on this, too. And so. Mr. GROSS and your whole team and. Mr. West, thank you. Thank you all for working with the council offices and on moving this thing in the right direction. And we're still out there at the early phases will be getting an ordinance back from the city attorney here in the next week or so to move this forward. So thank you all. Next item.