Needles, CA: Needles City Council tablets agenda item regarding Economic Development Program Funds from tax revenues received from local cannabis businesses after they asked questions and gave input.

By: Zachary Lopez (ZachNews):

Source: City of Needles (Information and Agenda Packet):

Needles, California: Members of the Needles City Council tableted an agenda item regarding Economic Development Program Funds from tax revenues received from local cannabis businesses after they asking questions and giving input.

Live Broadcast By ZachNews (Skip to 22:14 for Agenda Item #17):

The vote occurred during the regular meeting of the Needles City Council and Needles Public Utility Authority that was held on Tuesday, October 12th, 2021, which you can watch at ZachNews on Facebook.

This agenda item was continued from the meeting of the Needles City Council that was held on Tuesday, August 10th, 2021, and the City Council requested to revisit the City’s Economic Development Program.

Documents from the City of Needles said at the March 12, 2019 City Council meeting, Resolution 2019-8 was adopted which established an Economic Development Program to be funded with ten (10) percent of tax revenues received from cannabis businesses. These funds will be used at the Council’s discretion to offer economic incentives or grants to attract new non-cannabis businesses to the City or to incentivize the expansion of existing non-cannabis business within the City as follows:

  • Ten percent of tax revenues received from cannabis businesses shall be deposited in an Economic Development Fund which the City will use to incentivize new or expanded non-cannabis businesses;
  • Incentives or grants from the Economic Development Fund may be requested by any business or person proposing to open a new non-cannabis business or to significantly expand an existing non-cannabis business with a physical location in the City;
  • To be eligible to apply for an incentive or grant, the proposed new or expanded business must create two new sustainable full-time positions;
  • The business must provide a minimum private investment of at least twice the amount of the requested incentive or grant;
  • The business must allow public access; and
  • Prior to the awarding of a grant, the applicant must enter into a contract with the City in form and substance acceptable to and approved by the City Council.

City Staff has identified a few discussion items regarding the Economic Development Program:

  • Set an expiration date for the economic development grant funds if they are not used within a period of time?
  • Require a description of the jobs being created in addition to the number of jobs in the application?
  • Provide funding opportunities for housing developers. Two sustainable jobs are not created from a housing development.
  • Make funds non-transferable to new owner?
  • Require project approval with an entitlement, zoning permit, or developer agreement defining the project prior to approval of a grant application?
  • The grant purpose is to cover the difference in remaining costs of bringing a project online and not for preliminary planning, engineering, or advertising.

To-date the Economic Development Fund has allocated a total of $343,567:

  • December 10, 2019, Greens Needles LLC (Hampton) $104,543
  • September 22, 2020, Water asset replacement transfer $200,000
  • September 22, 2020, Scott Goodman remodel Chevron $4,524
  • March 8, 2021, Greg Yeager remodel The Filter Change $10,000
  • April 12, 2021, Needles Marina Resort $24,500

As for the fiscal impact, the City of Needles said in the documents that since the establishment of the Economic Development Program in 2019, there has been a total of $830,985 collected from the ten (10) percent of tax revenues received from cannabis businesses.

Initially the recommended action to members of the Needles City Council was to provide direction to City staff.

*** Agenda Packet for Agenda Item #17 (Unless otherwise noted, all downloadable agenda packets that are posted here are in a PDF file format so please make sure to have a PDF file reader or viewer): ***

cc-17-101221-econ dev prog

Needles City Manager Rick Daniels added during the meeting that if the Needles City Council agreed, then we will bring this back to the Needles City Council in an amendment policy, but we’re looking for guidance.

During discussions, Needles City Council Member Ellen Campbell spoke saying to Needles City Manager Rick Daniels that on the ‘setting an expiration date on the Economic Development Fund,’ “I think that’s a marvelous idea.”

Needles City Council Member Ellen Campbell asked Needles City Manager Rick Daniels, “Is this negotiable if there was good reason?” which Needles City Manager Rick Daniels said “of course.”

Needles City Council Member Ellen Campbell then asked Needles City Manager Rick Daniels, “Because it’s ambiguous, if we approve this, we are approving the fund non-transferable to the owner?” adding that, “I just want to make sure that said made transferable to the new owner because we don’t want to give the former owner the siphon and leave the new owner – who is hitching the project – with no… without that incentive.”

Needles City Manager Rick Daniels said to Needles City Council Member Ellen Campbell “Yeah… Right… Right… Right; That’s poor sentence structure – my apologies.”

Needles City Mayor Jeff Williams then spoke, saying members of the Needles City Council, “One of the things I would like the Council to consider perhaps is putting another item on here that “if the existing business would like to get some of this grant money to help them update their façade like Williams (Arizona) has done, like Seligman (Arizona) has done; make it a Route 66 boutique or whatever – just like Big O (Tires), if they redo their outside if they would use some of this money to help them. And I like to see that in this also.”

Needles City Manager Rick Daniels said afterwards, “Okay, we can add that,” which Needles City Mayor Jeff Williams then said, “While the Council agrees, I would like to see that added.”

Needles City Council Member Zachery Longacres liked Needles City Mayor’s Route 66 boutique idea, adding “In the downtown area” and asked “Are we going to take a boutique/façade theme?”

Some members of the Needles City Council suggested Route 66 theme, which Needles City Council Member Zachery Longacres asked “what style?; a ‘Get Your Kicks on Route 66’ like new convertible? 60’s style? Main Street style? What would we do (Regarding Theme)? I love that – I love that idea.”

Needles City Mayor Jeff Williams said that, “I like the Palo Verde College; when they took out all the aluminum siding off the Claypool building… That’s a beautiful building.”

Afterwards, Needles City Manager Rick Daniels said, “So we are going into the visiting stage of the General Plan, the first workshops are in November (2021). In that process, we can… you all can establish a theme for downtown.”

Needles City Council Member Donald Wade Evans II then spoke saying “I did all that can come out of the General Fund what Zach (Zachery) and Rick (Daniels) was talking about – the Economic Development Program; everything you said sounds awesome; what Jeff (Williams) said, but going into the housing thing, will it impact fees… Building Development fees, put a stimulation in there that they have to complete it in five years or something. And then you mentioned… Ellen (Campbell) said transferable funds to the buyer, I would like to put in there “As long as the project continues current construction” you know; that way they can’t just buy it and rise the price up.  I like it all.”

Needles City Council Member Donald Wade Evans then asked “so do we act on this agenda item or do we let it get revised? which Needles City Council Member Zachery Longacres said “We’re directing staff here,” which Needles City Manager Rick Daniels then said “What we will do is take your comments and line them up as an amendment of the policy; so then it will be part of the revised policy document. So we’ll incorporate the suggestions, and then it will come back to you before adoption.”

Afterwards, Needles City Council Member Kirsten Merritt said, “I guest… I guest I always thought the Economic Development Fund was to help all of the citizens in the sense by bringing in businesses and stuff, and I think we need to make sure we define exactly what this is and it’s not just for… you know ‘Come here and we’ll do this; we’ll give you money’ and all that stuff. I think we really need to make sure we know… I don’t know because I feel like Economic Development is developing; that’s just my opinion.”

Needles City Council Member Tona Belt then spoke asking, “Are all of these have term limits on them? On the sense of… you said how long they can collect on and the project has to be completed. So no money will be delivered until the project is completed… correct?” which Needles City Manager Rick Daniels responded saying, “Correct,”

Needles City Council Member Tona Belt then asked, “On all cases?” which Needles City Manager Rick Daniels responded saying, “We did one for a hotel, and part of the grant was to reimburse for building and permitted expenses. So part of the building permit was the permit for the foundation – the slab, and when they completed that; they paid for the permit, and when they completed, we reimburse them for that part of the building permit. And then… they had to start the rest of the building.”

Needles City Council Member Tona Belt interrupted and said, “I think… I personally feel we need to revise that because the slab isn’t the completed project,” which Needles City Manager Rick Daniels responded saying, “Right, but most things we’re requiring that they be done.”

Needles City Council Member Tona Belt said, “Correct. We just had so many…” which Needles City Manager Rick Daniels interrupted and said, “False starts,” which Needles City Council Member Tona Belt said, “False starts – in my life time.”

Needles City Manager Rick Daniels then brought up example of an uncompleted project, the abandoned Emerald River Resort tower, which sits on the riverbank of the Colorado River in Laughlin, Nevada.

“There’s a half-finished hotel up at the south end of Laughlin. It’s a monument,” said Needles City Manager Rick Daniels which Needles City Council Member Tona Belt said, “That’s why it should be done (the revise).”

Needles City Manager Rick Daniels then said, “It seems – to my wreckilation was – the Council didn’t want to front end any of it but it was revised after the fact that it’s done, and there would be jobs created.”

Needles City Council Member Tona Belt then said, “That’s what I’m saying; even if it’s for the cement, we’ll give you that – back for the cement after the entire project is completed.”

Shawn Gudmundson spoke during public comments saying “I think this is a great idea for all of the… all Councilors have a great input and opinion. I have to say I also disagree with Councilor Merritt (Kirsten) because economic development is about bring in new industry, businesses, population and retaining population. We are not in a struggle to get people here from Southern Cal (California) right now, we’re in a struggle with people here from going across the river. So people taking advantage of the market right now in Needles (California), and they sell their house for three and they’re all just seen across the river; hay we got to keep this rooftop in our hometown and give them their five year of building fees back if they still reside in Needles (California).

Shawn Gudmundson then asked, “Why wouldn’t you not do that to them; a private party, as to developer? As in right now we’re giving for rooftops or I think Councilor Longacres (Zachery) said ‘putting lipstick on a pig’ with our beautification project. We’re doing that to beautify homes; it’s all about rooftops. Rooftops create the new businesses and the economic development that we need.

Shawn Gudmundson continued saying “But Councilor Belt (Tona) is one-hundred percent right, we got to be careful with this; we say the very end tale of the project – we’ll pay it all at once when the project is completed when you get your ‘Certificate of Occupancy,’ no matter what it is; if it’s a house, it’s a business… whatever; COO is the biggest and important thing. So but I think Miss Merritt (Kirsten Merritt)… you really need to think about ‘Yes, we are in a struggle right now’ and ‘we do not have the cheapest power rate in the Tri-State anymore.'”

Needles City Manager Rick Daniels is seen shaking his head ‘No’ when he said about not having the cheapest power rates as Shawn Gudmundson continued saying “they’re going across the river. We’re fighting to keep what we have here.”

After discussion and debate members of the Needles City Council as well as public input, Needles City Manager Rick Daniels said for the recommendation to “Just continue for two weeks and we’ll give you some language on those matters.”

After the Needles City Manager Rick Daniels’ recommendation, Needles City Council Member Donald Wade Evans II said that he made the motion to table this item.”

After a second on the motion, members of the Needles City Council voted unanimously to table the agenda item.

For more information, please contact Dale Jones, City Clerk at the City of Needles at: 1 (760) 326-2113.

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