RES-ORA-0456 Small Business Assistance Programs Establishment for Amended Redevelopment Project AreaRESOLUTION NO. ORA-
0456 A RESOLUTION OF THE
ORANGE REDEVELOPMENT AGENCY
ESTABLISHING SMALL BUSINESS ASSISTANCE
PROGRAMS UNDER HEALTH & SAFETY CODE
SECTION 33444.5 FOR THE ORANGE MERGED
AND AMENDED REDEVELOPMENT PROJECT
AREA AND TERMINATING THE WEST
CHAPMAN REINVESTMENT PROGRAM AND OLD
TOWNE RESTAURANT MINOR
REHABILITATION
PROGRAM WHEREAS, the Amended and Restated Redevelopment Plan for the Orange
Merged and Amended Redevelopment Project Area (the Merged Redevelopment Project Area)
was duly adopted by the City Council of the City of Orange on November 27,2001 by
Ordinance No. 2101, pursuant to the California Community Redevelopment Law (commencing
with Section 33000 of the Health and Safety Code and hereinafter referred to as the
CRL);WHEREAS, pursuant to Section 33444.5 of the CRL, the Orange
Redevelopment Agency (Agency) may establish a program under which it loans funds to owners or
tenants for the purpose of rehabilitating commercial buildings or structures within the
Merged Redevelopment Project
Area;WHEREAS, pursuant to Section 33444.5 of the CRL and in furtherance of
the Amended and Restated Redevelopment Plan, the Board of Directors of the Agency (
the Agency Board) desires to establish the Small Business Assistance Programs, which are
more particularly described on Exhibit A attached hereto, under which it will loan funds from
the tax increment revenues of the Merged Redevelopment Project Area, bond proceeds, and
any other funds ofthe Agency legally available therefore to owners or business tenants within
the Merged Redevelopment Project
Area;WHEREAS, pursuant to Section 33444.5 of the CRL, the Agency Board
has previously established the (I) West Chapman Avenue Reinvestment Program by the
adoption of Resolution No. ORA-0396 on July 10, 2001 (the West Chapman Program), and (
2) the Old Towne Restaurant Improvement Program on May 26, 1998 (the
Restaurant Program).The Agency Board subsequently supplemented the Restaurant Program with
a Restaurant Minor Rehabilitation Program by the adoption of Resolution No. ORA-0411
on May 28,2002 (the
Restaurant Rehabilitation Program);WHEREAS, the Agency Board wishes to replace the
West Chapman Reinvestment Program and the Restaurant Minor Rehabilitation Program with the following
six (6) Small Business Assistance Programs: (I) the Signage Incentive
Program, (2) Landscape Enhancement Incentive Program, (3) Property Improvement Loan Program, (
4) Old Towne Retail Loan Program, (5) Restaurant Equipment Incentive Program, and (
6) Fee Incentive Program (collectively, the Programs). The amounts available, the
loan criteria (including interest rates and funding percentages), repayment methods and additional details
for each of the Programs are described on Exhibit A attached hereto and incorporated
herein
WHEREAS, the Agency Board further desires to establish an internal loan
committee comprised of the Agency's Assistant Executive Director, Finance Officer and
General Counsel (or their respective designees), and the Senior Project Manager and Project
Manager who will be responsible for the administration of the Programs (Loan Committee),
which Loan Committee will be responsible for the evaluation of each application for a loan
under the Programs and for the formulation of a recommendation thereon to the Agency's
Executive Director or to the Agency Board;
WHEREAS, the Agency Board desires to appropriate an initial sum of $500,000 for
the Programs; provided, however, that said appropriation does not presently constitute a
pledge of any particular funds and is and shall be subordinate to any pledge or other
commitment of the Agency made in connection with any Agency bonds, now or hereafter
issued; and
WHEREAS, the Agency Board has duly considered all of the terms and conditions
of the proposed Programs and believes that terminating and replacing the West Chapman
Program and the Restaurant Rehabilitation Program with the Programs is in the best interest
of the City and the health, safety, morals and welfare of its residents, and in accord with the
public purposes and provisions of applicable State and local law and requirements.
NOW, THEREFORE, be it resolved by the Board of Directors of the Orange
Redevelopment Agency, on the basis ofthe facts set forth in the agenda report presented to it
and any testimony received at the meeting at which this matter was considered, as follows:
Section I. The foregoing recitals are true and correct.
Section 2. The West Chapman Reinvestment Program and the Restaurant Minor
Rehabilitation Program are hereby terminated; provided, however, that such termination shall
have no effect upon any loans issued by the Agency under and pursuant to those two
programs prior to the effective date of this Resolution, which loans, if any, shall remain in
full force and effect in accordance with their terms.
Section 3. The Programs, as more particularly described on Exhibit A attached
hereto, are hereby approved and the use of $500,000 in Agency funds for the purposes
described in the Programs will be of benefit to the Merged Redevelopment Project Area.
Section 4. The General C;ounsel for-the Agency is hereby authorized and directed
to prepare, or cause to be prepared, all documents deemed necessary and appropriate
to implement the
Programs.Section 5. The Agency Board hereby establishes an internal loan
committee comprised of the Agency's Assistant Executive Director, Finance Officer and
General Counsel (or their respective designees), and the Senior Project Manager and Project
Manager who will be responsible for the administration of the Programs (Loan Committee),
which Loan Committee will be responsible for the evaluation of each application for a loan
under the Programs and for the formulation of a recommendation thereon to the Agency'
s Executive Director or to the Agency Board in accordance with the criteria set forth
in Sections 6 and 7 of this
Resolution.
Section 6. For loans under the Programs to qualified owners and tenants within the
Merged Redevelopment Project Area having a value of $60,000 or less, the Executive
Director is authorized, on behalf of the Agency, to review the recommendations of the Loan
Committee and, to approve or disapprove such applications, and, if approved, to take such
steps and execute such documents on behalf of the Agency as are necessary and appropriate
in order to make loans under the Programs and to otherwise effectuate the purposes of this
Resolution.
Section 7. The Agency Board shall review the recommendations of the Loan
Committee for loans under the Programs to qualified owners and tenants within the Merged
Redevelopment Project Area having a value in excess of $60,000, and to approve or
disapprove such applications. If approved by the Agency Board, the Agency's Executive
Director is authorized to execute such documents on behalf of the Agency as are necessary
and appropriate in order to make such loans under the Programs.
Section 8. The Agency's Fiscal Year 2006-07 budget is amended by
transferring 500,000 from the unappropriated reserves in the Orange Merged Capital Projects
Fund Fund 940) to Account No. 940-9800-485702-9874 (
Orange
Small Business Assistance Programs).Section 9. The Agency's Director of Finance (or his
designee) is authorized and directed to make such other revisions, changes in summaries, fund
totals, grand totals, and other portions of the Agency's budget document as shall be necessary
to reflect
said transfer and appropriation.Section 10. The officers and employees of the Agency
are authorized and directed,jointly and severally, to do any and all things necessary or advisable in
order to effectuate the purposes of this Resolution and to administer the Agency'
s obligations, responsibilities and duties
to be performed hereunder.ADOPTED this 22nd
day of
August, 2006.Mark . Murphy Chairman of
the
ATTEST:
Ca~c~
Mary E. urp ; Clerk.
I, MARY E. MURPHY, Clerk of the Orange Redevelopment Agency, Orange, CA,
do hereby certify that the foregoing Resolution was duly and regularly adopted by the
Orange Redevelopment Agency at a regular meeting thereof held on the 22nd day of August,
2006, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
DIRECTORS: Smith, Murphy, Cavecche, Dumitru
DIRECTORS: None
DIRECTORS: None
DIRECTORS: None
Ul~:ai>~Mary E. u , Clerk
4
EXHIBIT "A"
SMALL BUSINESS ASSISTANCE PROGRAMS
The Small Business Assistance Programs (Programs) is being established by the Orange
Redevelopment Agency in an effort to promote and encourage property owners and tenants
to rehabilitate commercial, retail and/or industrial properties located within the Orange
Merged and Amended Redevelopment Project Area (Merged Redevelopment Project Area).
The Programs are comprised of six (6) loan programs designed to provide incentives to
property owners and tenants to upgrade signage, enhance landscaping, improve exterior
facades and other property improvements. The Programs offer financial assistance in the
form of forgivable loans to encourage new investment, increase property values, facilitate
deferred or much needed interior and exterior property improvements, and to assist tenants
and businesses seeking to start-up, expand or relocate into the City of Orange.
Property owners and tenants may receive funding under more than one loan program at one
time,however, future assistance shall not be given until the existing loan terms have been
fulfilled.1. PROPERTY IMPROVEMENT LOAN
PROGRAM The Property Improvement Loan Program is an interest-free loan program created
to meet the needs of property owners and tenants to fund exterior fayade and other
on-site property improvements that are necessary to improve the visual appearance of
the building and property in the Merged Redevelopment Project Area. A "Qualified
Small Business" under this program shall include property owners that have an ownership interest
and/or tenants that have a leasehold interest in a commercial and/or industrial property
located within the Merged Redevelopment Project Area. Property Improvement Loan Program
criteria
are as follows:o Minimum loans of$5,000 up to a maximum
of $250,000;o Loan shall
be interest free;o Loan repayment shall be deferred for the first 12 months from effective
date of
the loan agreement; .o Assistance requests of $60,000 or less shall be in the form of
an unsecured loan;o Assistance requests in excess of $60,000 shall require collateral and/or
security in the form of a deed of trust or other
appropriate security instrument;o Term of the loan shall be negotiated, but will not
exceed 10 years;o Upon timely repayment of the first 75% of loan, the remaining 25%
of the loan balance shall be forgiven upon satisfying
certain
agreed-upon performance conditions;o Qualified use of funds may include: exterior
fayade treatments, exterior painting,building and parking lot lighting, parking lot
improvements including resurfacing and re-striping, utility under-grounding, architect
and engineering fees
and other needed on-site improvements; and o All contractors performing the work shall be
required to pay prevailing wage rates as established by the
State of
2. OLD TOWNE RETAIL LOAN PROGRAM
The Old Towne Retail Loan Program provides for a mechanism to help Qualified Small
Businesses that are either a new husiness or an existing hllsiness looking to expand or
relocate in the Old Towne Historic District. The program would encourage a Qualified
Small Business to upgrade interior improvements that would satisfY building code
improvements such as ADA improvements, plumbing and electrical upgrades, seismic
retrofit work, and other related interior improvements. A "Qualified Small Business" under
this program encompasses a broad range of retailers including restaurants, food service
establishments, and antique and specialty shops. Applicants who are participating in the
Mills Act Program do not qualify for the Old Towne Retail Loan Program. Old Towne
Retail Loan Program criteria are as follows:
o Minimum loans of $5,000 up to maximum of $60,000;
o Loans will be structured over a five (5) to ten (10) year period and require annual
payments of principal and interest. Terms and amount of assistance may be modified
in certain circumstances to reflect the lease terms;
o Loans will bear an interest rate of three percent (3%) simple interest annually;
o 50% of the loan amount will be forgiven by the Agency to provide an incentive to
stay in operation depending upon the Agency's analysis of need;
o All contractors performing the work shall be required to pay prevailing wage rates as
established by the State of California Department ofIndustrial Relations; and
o All outstanding debt will be immediately due and payable upon closure, sale of the
business to a third party, or default.
3. SIGNAGE INCENTIVE PROGRAM
The Signage Incentive Program is a 60/40 matching loan program in which the Agency will
contribute 60% in funding participation towards new signs in the Merged Redevelopment
Project Area. The program provides for property owners and/or tenants seeking financial
assistance to remove existing signs and upgrade and/or construct new signs that will meet the
City of Orange building and zoning code requirements. Signage Incentive Program criteria
are as follows:
o 60/40 Matching Program. At time of application submittal, a Qualified Small
Business must provide proof of documentation that it's 40% contribution in matching
funds is available for the project;
o Minimum Agency participation is $2,500; maximum Agency participation shall not
exceed $30,000;
o Qualified use of funds may include: removal and disposal of original sign; new sign
design concept; sign fabrication, installation related work including foundations and
electrical work; permits and building fees;
o City and Agency must approve all sign designs and plans;
o Loan shall be interest free;
o All contractors performing the work shall be required to pay prevailing wage rates as
established by the State of California Department ofIndustrial Relations; and
o Assistance in the form of an unsecured loan shall be forgiven upon satisfying certain
agreed-upon performance conditions over a five-year term or other
negotiated term.
4. LANDSCAPE ENHANCEMENT INCENTIVE PROGRAM
The Landscape Enhancement Incentive Program is created to provide property owners and
tenants with financial assistance to enhance their properties through landscape treatments.
Under this program, property owners can pursue much needed aesthetic improvements to
their property thereby creating an environment more attractive, inviting and conducive for
business activity. General program criteria are as follows:
o 60/40 Matching Program. At time of application submittal, Qualified Small Business
must provide proof of documentation that it's 40% contribution in matching funds is
available for the project;
o Minimum Agency participation is $5,000; Maximum Agency participation shall not
exceed $60,000;
o Qualified use of funds may include: landscaping design and plans, construction of
landscape improvements including demolition, planting, trees, shrubs, hardscape and
masonry work, fencing and irrigation system;
o City and Agency must approve all final landscape plans;
o Loan shall be interest free;
o All contractors performing the work shall be required to pay prevailing wage rates as
established by the State of California Department ofIndustrial Relations; and
o Assistance in the form of an unsecured loan shall be forgiven upon satisfYing certain
agreed-upon performance conditions over a five-year term or other
negotiated term.5. RESTAURANT EQUIPMENT
INCENTIVE PROGRAM The Restaurant Equipment Incentive Program provides for a loan of up to $30,000
to install and/or upgrade grease interceptors, grease traps or alternate methods as determined
by the City's Public Works Director. A "Qualified Small Business" shall be required
to maintain and clean the grease interceptors and/or grease traps for the life of the
business operation.The frequency of maintenance shall not be less than every six (6) months. Based
on actual generation of fats, oils and grease from the establishment, the maintenance
frequency may increase or decrease as determined by theAgency and/or the City's
Public
Works Department.A "Qualified Small Business" shall include but not be limited to any facility preparing
and/or serving food for commercial use or sale. This includes restaurants; cafes;
hotels; catering kitchens; bakeries; grocery stores with food preparation, food packaging, meat
cutting, and meat preparations; and other food handling facilities not listed above where fats,
oil and grease may be introduced into the community sewer system and cause line
blockages and sewer overflows. General program criteria are
as follows:o Minimum loans of $2,500 up to a maximum of $
30,000;o Loan shall be
interest free;o Assistance in the form of an unsecured loan shall be entirely forgiven
upon satisfying performance conditions over a five-year term or
other negotiated term;o All contractors performing the work shall be required to pay prevailing
wage rates as established by the State of California
Department ofIndustrial
o Qualified Small Business shall be required to maintain restaurant grease equipment
and remain open for business during the term of the loan; an
o Agency funds may be used for all costs associated with the installation of grease
interceptors and/or grease traps including but not limited to design and engineering
costs, equipment costs, permits and fees. Funds may not be used for on-
going maintenanceand/or cleanup
costs.6. FEE INCENTIVE
PROGRAM Recognizing the establishment, expansion, relocation of a small business comes
with substantial start-up costs, the Fee Incentive Program was created to allow
qualified small businesses to seek Agency assistance to offset costs associated development
fees including but not limited to planning, parking, Fire Facility, Police Facility,
Transportation System Improvement Program (TSIP), building, business license and utility fees. The
Fee Incentive Program provides financial assistance to shift dollars that would normally go to
pay for development fees and refocus those dollars into marketing and outreach of
the newly established business. Fee Incentive Program criteria are
as follows:o Minimum Agency participation of $2,500 up to a maximum of$
15,000;o Assistance in the form of an unsecured loan shall be forgiven
upon satisfYing performance conditions over a five-year term or
other negotiated term;o Qualified Small Business shall not exceed 100 full and/
or part-time employees;o New businesses must commit to marketing and outreach efforts
equal to 20-50% of the amount of requested Agency
assistance under this Program; and o Existing business intending to expand or relocate into
the City must commit to marketing outreach or other
performance-based conditions to be negotiated.Examples of performance-based conditions may
include: creation of new full and part time jobs, increase sales
tax generation,