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! CITY OF RIVERSIDE COUNCIL/AGENCY MEMORANDUM Honorable Mayor & City Council and Redevelopment Agency Date: Item No.: July II, 2000 8 Subject: Joint Public Hearing to Request Authorization to Submit an Application for a Title II Public Works and Economic Development Grant to the Economic Development Administration (EDA) in the Amount of $917,000 for the Landmark! Global Medical Malls Project- Downtown! Airport Merged Redevelopment Project Area Background Since July] 998, the Redeve]opment Agency has been negotiating with Germania Construction and Global Medica] Malls, LLC regarding the development of the 200,000 square foot Landmark office project, which will be located on approximately 7.5 acres at Market Street and Highway 60. As part of the Limited Right to Negotiate and the Memorandum of Understanding, the Agency is obligated to provide the public improvements consisting of signalization at the main entrance, curb, gutter, sidewalk, landscaping, street lighting, street widening and storm drain improvements. Estimated to cost $] ,834,000 (rounded), it has been anticipated that approximately 50 percent of the funding for the public improvements could be obtained from federal grant funding availab]e from the Economic Development Administration (EDA) of the U.S. Department of Commerce. In a preliminary project application review, EDA staff indicated their support of the project due to the proposed job creation and necessary financial assistance needed for the required costly infrastructure improvements, which are required due to the challenging liquefaction and drainage issues associated with the site. Current Issue On May 27, 2000, the City received a formal invitation from EDA to submit a final application for a Title II Public Works Grant to assist in funding the required public improvements. According to the invitation, the City is authorized to request $9] 7,000 in EDA grant funds, which is 50 percent of the estimated total public improvement cost. The remaining balance of $9] 7,000 in costs must be provided from a local funding match. Staff has identified available funds for this match from Redeve]opment, Public Works, and UDAG program income funds and Riverside County Flood Control and Water Conservation District. The final EDA application was due by June 27,2000 for the October 2000 anticipated federal funding round, however, the City has been provided an extension to July ]4,2000 in order to accommodate this public hearing. At completion, the proposed Landmark office project is estimated to create] 50 to 250 new full times jobs and generate over $30 million in private investment. The EDA grant application presents an opportunity for the City to obtain 50% of the necessary funding from federal sources for the required street and drainage improvements. The federal funds will be used for planning, design, engineering, inspection and construction costs. The public improvements must be constructed in order to attract quality development to this important site. The EDA grant is an outstanding financial mechanism to leverage the Agency's resources to construct these necessary public improvements. Many of the planned street improvements required for this project would provide the basic infrastructure that is needed to stimulate further development in the immediate surrounding area. Today, staff is seeking authorization to submit the final EDA Public Works Grant Application in the amount of $9] 7,000 and approval of the attached resolution. Fiscal Impact At full development, the project is expected to generate in excess of $30 million in assessed valuation in the Downtown/Airport Merged Project Area, generating approximately $300,000 in gross annual tax increment and 8-1