agenda city of watsonville city council/redevelopment agency meeting

from these cuts. If this bill moves forward and becomes law, the value of the Enterprise Zone
to Watsonville will be maintained. Since the law is in a state of uncertainty, the State Housing
and Community Development Department (HCD), which is responsible for the Enterprise Zone
Program, has not issued a request for applications for the year 2012. As a result, staff has
been unable to assess the amount of time that would be required to prepare an application.
Historically, these applications have been difficult to assemble and often exceed 500 pages in
length. Since 2004, no application developed without the assistance of an outside expert has
been approved by HCD. Therefore, with the potential release of requirements for new
applications looming, securing the needed expert assistance is vital to submitting an
application likely to be approved. The competition for Enterprise Zones can be fierce, and staff
expects this competition to be exceptionally difficult as the 2012 round will be the last until
2020 and only two zones expire in 2012. Staff expects that as many as 20 jurisdictions will be
competing for the two remaining slots.
Staff asked several companies with experience in preparing successful applications to provide
qualifications and proposals. Of these, two provided the staff with the requested information.
Both applicants were experienced and diligent, and offered similar pricing. After careful
review, staff determined that Rex Halverson and Associates of Sacramento would be the best
fit for Watsonville.
This is an appropriate use of redevelopment funds and due to the uncertainty of the
continuation of redevelopment, it may be prudent to enter into a contract for preparation of the
application and appropriate redevelopment funds for this purpose now, because the proposed
legislation calling for the elimination of redevelopment agencies also requires that contractual
obligations be honored. As such, by entering into a contract at this time, the Agency would be
preserving its ability to utilize tax increment funds for payment of this contract.
Because of the uncertainly relative to the ultimate “ground rules” for Enterprise Zones and the
timelines for release of application criteria, this contract contains a 10-day cancellation period
and also provides that no work shall be commenced without a written order to proceed. If the
request for applications is released by the State, staff will evaluate the application process and
any changes to the Enterprise Zone Act and only proceed with this application should analysis
conclude that there is a good chance the application will prevail and that the resulting
Enterprise Zone will be of benefit to the community and to local businesses.
STRATEGIC PLAN: This effort is consistent with the Strategic Plan goal of Sustainable
Economic Development and is also consistent with the Agency’s Implementation Plan.
FINANCIAL IMPACT: This contract is for an amount not to exceed $85,000. The impact of
extending the Watsonville EZ for an additional 15 years will be substantially positive to the
City, as this program will impact our ability to retain and attract new businesses to Watsonville.
No work will proceed until the State Department of Housing and Community Development
(HCD) releases the Enterprise Zone program guidelines and calls for applications and until a
Writer’s name 6/1/2011 2:12:57 PM
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