HomeMy WebLinkAboutAgenda Statement 1981/06/02 Item 17
COUNCIL AGENDA STATEMENT
Item ~ i7
Meeting Date ..tHtlsf/
ITEM TITLE: Resolution/b'lf3Execution of an Agreement with the
San Diego Local Development Corporation
SUBMITTED BY:
(/, "
Community Development Director '-~"
(4/5ths Vote: Yes
No~)
'~
The Council is requested to approve a resolution authorizing the Mayor to enter into
an agreement with the San Diego Local Development Corporation (LDC) for the provision
of economic development services to business firms located in or wishing to locate in
Chula Vista. These services include packaging Small Business Administration (SBA)
Section 7A, 502 and 503 loans and loan guarantees, and technical assistance. Without
the participation of a certified local development company, these services will not
be available to local businesses. It is therefore my
RECOMMENDATION: That the Council
Approve a resolution authorizing the Mayor to execute the attached agreement with the
San Diego Local Development Corporation.
BOARDS/COMMISSION RECOMMENDATION:
The Chula Vista Town Centre Development Corporation has entered into a similar agree-
ment with the San Diego LDC for the provision of their services within the Town Centre
Redevelopment Area.
DISCUSSION:
The San Diego LDC is a non-profit corporation established in 1979 to provide economic
development services, including the packaging of SBA loans, in the San Diego metro-
politan area. Although their funding is primarily provided through the County and
City of San Diego Block Grant programs, the San Diego LDC is authorized to provide
services throughout the San Diego, Imperial and Riverside Counties. The LDC does not
normally operate in other counties or entitlement cities unless they are specifically
requested to do so and are reimbursed for expenses. Expenses may be reimbursed by
charging fees to businesses who use their services pursuant to SBA limitations.
The San Diego LDC is similar to the Town Centre Development Corporation with the
exception that they have a full-time staff of 15 employees and the potential to offer
a wider variety of services. Recently, the SBA activated the Section 503 low-interest
loan program in addition to the older Section 7A and 502 loan programs. In order to
qualify to underwrite the more complicated Section 503 loans, a development corporation
must be certified by the SBA. Certification requirements include the provision of
full-time staff support, legal counsel, insurance and the capability to provide free
technical advice and services. It is estimated that no more than 10% of the nation's
2,500 LDC's will be certified. The San Diego LDC is the only certified corporation
in San Diego County.
In order to promote economic development in the Town Centre redevelopment area, the
Town Centre Development Corporation has entered in to a similar agreement with the
San Diego LDC. Fees for their services will be paid by recipient businesses. The
Town Centre Development Corporation may subsidize fees when considered necessary to
make a workable project.
uZ3
Continued
Form A-113 (Rev. 11/79)
Page 2, Item
-+8- 17
~81
Meeting Date
The Town Centre Development Corporation was requested to consider expanding their
services City-wide. At their meeting of March 25, 1981, they voted to retain their
current geographic limitations and concentrate their efforts in the downtown area.
Since the availability of SBA financing may be an important factor in retaining
existing businesses and attracting new firms to Chula Vista, I am requesting that
the Council approve and execute the attached agreement which authorizes the San Diego
LDC to provide services in the remainder of the City.
FISCAL IMPACT:
Fees for LDC services will be paid by recipient !">,.-
of $500 and may not exceed 1.5% of the appr""
fees if considered necessary to promot'
expenses, and $10,000 is available fo
_J. Fees will be a mlnlmum
.. amount. The City may subsidize
,..,cnt. Fees are eligible Block Grant
..I~ purpose in the -v 1980-81 budget.
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