VACAVILLE — The city of Vacaville has done everything it can now to woo light aircraft maker ICON.
With a 5-0 voice vote, the city council approved an agreement with ICON that would provide the company with tax incentives if it chooses to build its offices and manufacturing facility at the Nut Tree Airport.
City manager Laura Kuhn outlined the agreement she hammered out with ICON representatives, which puts the city in a position of near-zero risk.
Part of that agreement involves a sales and transient occupancy tax deal with ICON tied to the number of jobs generated at the facility, which will be used to build the company’s A5 sport light aircraft.
Kuhn said the 10-year agreement calls for a rebate on sales tax generated by ICON up to 50 percent for the first two years as an incentive for ICON to get the facility up and running.
After the two years, the rebate is tied to jobs with salaries averaging $40,000 per year
Up to 75 percent of the sales tax could be rebated, after the city receives its sales tax revenues from the state, if 500 full-time equivalent jobs are achieved. If job generation is less, the rebate is reduced.
The evaluation of jobs and rebate payments would be quarterly as the city receives its sales tax reports.
On the TOT, or hotel taxes, the city would also refund 50 percent of the ICON-generated TOT taxes, using a special promotion code to track the money generated by the manufacturer’s customers and business associates.
The agreement is for 10 years and is automatically renewed for another decade if the 500 jobs are achieved.
Kuhn and the council called the agreement a milestone.
“In a post-redevelopment world, we have to be really creative,” Kuhn said.
The council lauded Kuhn for her negotiating skills and her efforts to see the project through.
“These kinds of things don’t happen without collaboration,” said councilman Curtis Hunt.
There’s more work to be done, but the city is ready if ICON chooses Vcaville as its new home.
“The next step is we’ve got to work with the county, and get to an agreement with the county and then we’ve got some approvals to work through with local landowners and the (Federal Aviation Administration),” said Kirk Hawkins, ICON founder and CEO. “A few more hurdles to get through, but this was a big one.”
There’s no definite timeline, for a decision.
“We expect in the next several months to have a decision, to be able to make a public announcement at some point, which way that is,” Hawkins said. “While we’re not ready to celebrate just yet, we’ll celebrate this milestone.”
Reach Mike Corpos at 427-6979 or firstname.lastname@example.org. Follow him on Twitter at www.twitter.com/mcorposdr.