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Home My WebLink AboutR5- Economic Development ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION ACTION FROM: BARBARA J.LINDSETH SUBJECT: ACCENT FURNITURE Acting Director FINANCIAL ASSISTANCE DATE: January 18, 1995 ------------------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On January 11, 1995,the Redevelopment Committee recommended that the Community Development Commission approve a$150,000 assistance package to Accent Furniture and an Employment Linkage Program in an amount not to exceed$60,000 in accordance with the terms and conditions set forth in the staff report;further,that the Acting Director be authorized to execute an Owner Participation Agreement with Accent Furniture and;all other implementing documentation;finally,that the Agency budget be increased accordingly. ------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION: That the Community Development Commission approve a$150,000 assistance package to Accent Furniture and participation in the Employment Linkage Program in an amount not to exceed$60,000 in accordance with the terms and conditions set forth in the staff report;further,that the Acting Director be authorized to execute an Owner Participation Agreement and an Employment Linkage Agreement with Accent Furniture and all other implementing documentation;and,that the Agency budget be increased accordingly. Administrator BARBARA J.LINDSETH Acting Director ------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Barbara J.Lindseth/Doris A.Daniels Phone: 5081 Project Area(s): Central City_(CC) Ward(s): Three(3) Supporting Data Attached: Staff Report-, FUNDING REQUIREMENTS: Amount: $210.000 Source: Tax Increment Budget Authority: Requested ------------------------------------------------------------------------------------------------------------------------------------------- Commission Notes: ------------------------------------------------------------------------------------------------------------------ BJL:DAD:lag:01-23-02.cdc COMMISSION MEETING AGENDA MEETING DATE: 01/23/1995 Agenda Item Number&c-� ECONOMIC DEVELOPMENT AGENCY STAFF REPORT ------------------------------------------------------------------------------------------------------------------ Accent Furniture Financial Assistance The City of San Bernardino has an outstanding opportunity to secure a bedroom furniture manufacturing company known as Accent Furniture. Accent Furniture wishes to relocate its operation from Anaheim, in Orange County, to the Inland Empire. The company has considered a number of locations throughout the Inland Empire and has narrowed the selection to two sites, one of which is located in San Bernardino. The site located at 600 South "G" Street appears to offer the best financial arrangements to purchase a facility. In addition, the site would suit the company's longterm needs and would provide an excellent economic and housing environment for its employees. The facility is an approximate 80,000 square foot combination warehouse and office structure that was previously occupied by several companies including a handbag manufacturer and luggage distributor. The site is within the Central City Project Area. Staff considers this an excellent opportunity for the City of San Bernardino for the following reasons: 1. PURCHASE OPPORTUNITY The company plans to purchase the facility and improve the property by approximately $305,000 in tenant improvements. (See attached letter from Boyd Flotation, the parent company). 2. UTILITY TAX INCREMENT At present the facility is vacant. After occupancy, the Utility Tax projected by Accent Furniture could be as high as $7,500 per year. 3. TAX INCREMENT The tax increment of approximately$8,000 will continue. Gross sales are presently $20,000,000 and, as projected by Accent Furniture, will grow rapidly to $30,000,000. The company presently has unfilled orders they will be able to fill once the new plant is equipped, staffed and fully operative. ------------------------------------------------------------------------------------------------------------------ BJL:DAD:1ag:01-23-02.cdc COMMISSION MEETING AGENDA MEETING DATE: 01/23/1995 Agenda Item Number: ECONOMIC DEVELOPMENT AGENCY STAFF REPORT Accent Furniture Financial Assistance January 17, 1995 Page Number-2- ------------------------------------------------------------------------------------------------------------------ 4. NEW JOBS According to Accent furniture, up to 100 new, permanent jobs will be created by this venture. The company will relocate approximately 50 employees and hire approximately 60 new employees within six months. Additional employees will be hired within the next six months. 5. LOCAL EMPLOYMENT OPPORTUNITIES Employment and Training Agency(SBETA), as the JTPA administrative entity for the City, through its Employee Linkage Program, will enter into an agreement with Accent Furniture to provide On-the-Job-Training (OJT)for up to 100 employees from the local area. JTPA will pay 50% of an employee's salary for six months. In addition, the Agency's linkage program package will reimburse the company$1,000 per employee who remains on the payroll for a minimum of one year. This program will become operative 120 days after the company commences operation at the "G" Street facility. 6. OCCUPANCY OF A VACANT FACILITY The purchase and occupancy of this facility by a viable and expanding company will add to the beautification of the area. Staff is working with the company to resolve planning and fire/building code issues relative to the refurbishing of the new plant. In order for the transaction to occur, Accent Furniture has asked for$150,000 worth of Agency assistance, to be used to overcome the burden of tenant improvements associated with the project after the initial purchase. The deal points are as follows: 1. Accent Furniture will invest $300,000 towards the purchase of the approximately 80,000 square foot facility. 2. The Agency will provide $150,000 towards the approximate $305,000 in tenant improvements that are required by the Uniform Building Code. ------------------------------------------------------------------------------------------------------------------ BJL:DAD:1ag:01-23-02.cdc COMMISSION MEETING AGENDA MEETING DATE: 01/23/1995 Agenda Item Number: _� ECONOMIC DEVELOP1viENT AGENCY STAFF REPORT Accent Furniture Financial Assistance January 17, 1995 Page Number-3- ------------------------------------------------------------------------------------------------------------------ 3. If, at any time before completing five continuous years of operation, Accent Furniture should cease operations, all Agency funds must be repaid to the Agency. In conclusion,this is an excellent opportunity to secure a major furniture manufacturing operation for San Bernardino. The improvements in utility tax,jobs, and occupancy of a vacant facility are significant. The cost, relative to the economic enhancements to be derived, is minimal. While other issues, essentially of a non-monetary nature, need to be resolved technically and administratively, this is a definite step in the right direction to bring a major job and sales producing manufacturing business to the City. Based upon the foregoing, staff recommends adoption of the form motion. BARBARA J. LINDSETH,Acting Director Economic Development Agency ------------------------------------------------------------------------------------------------------------------ BJL:DAD:1ag:01-23-02.cdc COMMISSION MEETING AGENDA MEETING DATE: 01/2311995 Agenda Item Number: - Ms Doris Daniels December 22,1994 Page Two Note 1: TENANT IMPROVEMENT: VALUE: IRON FENCE ENCLOSURE $30,000 DUST COLLECTOR & INSTALLATION 40,000 ELECTRICAL SET-UP 38,000 2 HOUR FIRE WALL 28,000 ELECTRICAL UPGRADE 25,000 MOVING EXPENSE 20,000 PAINT EXTERIOR 15,000 SPRINKLER SYSTEM ALTERATION 14,000 PARKING LOT SEALED/STRIPED 10,000 LANDSCAPING 10,000 EXTERIOR SIGNS (2) 10,000 SPRAY BOOTH INSTALLATION 8,000 SECURITY SYSTEM INSTALLATION 8,000 ELECTRICAL PANEL 8,000 EMPLOYEE LUNCH ROOM 7,000 INSPECTIONS/APPRAISALS 5,900 TELEPHONE UPGRADE/INSTALL 5,000 RESTROOM UPGRADES 5,000 OFFICE RENOVATIONS 5,000 H2 ROOM PIPE INSTALLED 5,000 AIR LINE INSTALLATION 4,000 FLOOR CLEANING 3,000 TOTAL TENANT IMPROVEMENTS $303,900 This out flow for improvements is significantly higher at this facility, than our alternative opportunities. In an effort to facilitate our final decision on plant selection, we would ask you to recognize the positive benefits our move would create, and hope that you would be able to assist us financially. I look forward to your prompt response. Sincerely, ' _e,, ►' Dennis Boyd President DB/mw Boyd Flotation/Accent Furniture w. JAN-12-95 15.49 FROMs ID■ PAGE 2/2 IBOYDI January 12, 1994 Doris Daniels City of San Bernardino 201 North E Street 3rd Floor San Bernardino, CA 92401-1507 RE: Purchase of facility at 600 South G Street Dear Ms Daniels: I have reviewed the financial assistance proposal for Accent Furniture as submitted by the Development Department Acting Director, Barbara J. Lindseth. Accent Furniture is prepared to move forward with our investment in the above property provided the following: 1. Full acceptance of the financial assistance program as indicated in the above mentioned proposal by the City of San Bernardino by 1/31/95. 2. Satisfactory resolution to building and fire code issues relative to refurbishing of the new plant. We are in need of a spacious manufacturing environment free from numerous partition walls. 3. Satisfactory environmental and appraisal reports on the property. With the substantial investment in the building necessary for us to manufacture our oak bedroom furniture we do not view your condition of five years of continuous operation as an obstacle to our transaction. I appreciate your department0s efforts and I look forward to beginning operations soon in San Bernardino. If you have any questions please contact me. Sincerely, Dennis Boyd President Accent Furniture DB/Mw 2440 Adie Road, Maryland Heights,Missouri 63043 Phone(314)997-5222 FAX(314)432-3542