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Council staff seeks public hearing Jan. 28 on updates to incentive policy, including reintroduced nonconforming project provision
Summary
City staff asked the committee to authorize a Jan. 28 public hearing on proposed updates to the economic incentive policy: technical edits to align with the new DRIVE program, a reintroduced nonconforming negotiated-incentives provision requiring a three‑quarter council vote, and clarifications of administrative responsibility for certain housing funds.
City staff told the committee the 2023 economic development incentive policy needs several edits to align with federal directives and the city’s new supplier program (DRIVE). The redline in the packet updates references previously tied to the Business Inclusion and Development program to the new Developing Regional and Inclusive Vendor Enterprises (DRIVE) program and includes technical corrections.
One substantive proposed change would reintroduce a "nonconforming negotiated incentives" provision to allow City Council to approve unique projects that do not meet the letter of the policy, but only by a three‑quarters vote of the council. Legal staff explained "three quarters of the entire body" means three-quarters of the full council membership (not merely those present).
Staff also proposed clarifying language that assigns administrative responsibility to the Office of Economic Development for funds resulting from Proposition H (2024 bonds) and the city's Mixed Income Housing Development Bonus (MIHDB) fee‑in‑lieu fund, noting program statements will be revised before deployment. The item would be scheduled for a public hearing Jan. 28; staff asked for committee feedback by the end of the following week if members have suggested tweaks.
Council members asked staff to closely review exhibits and redlines for typographical issues and asked advancement mechanisms for ensuring fiscal protections on large incentive awards; staff said they would follow up with councilmembers for more detailed policy conversations.
Next steps: public hearing on Jan. 28, staff to refine redlines and respond to councilmember comments prior to the hearing.
