There's been a lot of debate in San Juan Capistrano about the $5 million deal for Tuttle-Click to come to town, and other redevelopment deals to generate some business activity.
In an Orange County Register story, Esmael Adibi, the Chief Economist at Chapman University, said cities need to provide incentives to kick-start their economies.
The Register also cites one of its own stories about Orange Coast Chrysler coming to San Juan, in which the dealer said the incentives weren't important to him -- but remember, he's moving into an exising building (the former Honda shop next to the CHP on Camino Capistrano) and didn't even require City Council approval, so that dealer's costs aren't comparable to Tuttle-Click.
Tuttle-Click is moving the Ford dealership to the closed Chrysler and Nissan plots on Camino Capistrano, where they must tear down existing buildings and dealerships and build new ones. That's a substantial-upfront cost.
Is $5 million too much? Maybe. The break-even period is about 12 years in the 27-year deal with Tuttle-Click.
Compare that, though, to Buena Park, which -- according to the Register story -- is offering to give a developer an acre of land and return $50 million in sales tax for an office and retail project.
Esmael Adibi, chief economist at Chapman University, suggested it's the only way to go. "A city, in the current economic climate, must look into developer incentives in order to create jobs and a tax base," he said.
"In this recession, it is challenging for cities to give (very) much," Adibi added. "However, if cities do not create incentives, down the road, there will not be a strong tax base. If they do not assist developers, projects will not get off the ground, and cities will struggle in the long run."
Recent Comments