Laguna Retail? Sales Doubled in Last 10 Years

Next week the Planning Commission discusses the Downtown Retail Market Evaluation – (or the Urban Economist’s Report.) The report will likely be used to justify upcoming decisions regarding the future of your downtown. While the report includes helpful data, it is also laced with opinions and suggestions that may be less grounded in fact.

Here are two important facts that you may want to consider:

  • Over the past ten years sales tax collected by the City has more than doubled. How bad is business if sales have doubled?
  • And all the sales tax received by the City from the downtown amounts to less than 3% of the City’s total revenue.

There is no doubt that Amazon and other online retailers are having substantial impacts on brick and mortar retailers everywhere. But how bad is it in Laguna? Pages 130 and 131 of the City’s latest audited financial statements (the “CAFR”) report that sales tax from all local retail businesses has more than doubled in the last 10 years. If sales tax has doubled, then sales have doubled. And much of that increase has come from bars and restaurants.

Secondly, based on the report, the total contribution to the City budget from sales tax from the downtown is less than 3 percent of all City revenue.

One of the most aggressive suggestions in the report is that there be changes to Conditional Use Permit and parking requirements that would result in there being virtually no local limit on the number of new alcohol serving bars and restaurants that could be added to the downtown as long as they serve alcohol no later that 10PM or 11PM (that small detail to be determined) and have approval of the Director of Community Development (no public hearing required.) It also recommends that almost any business in the downtown, in addition to bars and restaurants, be able to dedicate a small area for serving alcohol.

While the report claims that “continued performance of downtown retailers and restaurants is critical to the City,” if the total economic contribution from sales tax paid by the downtown is less that 3% of city revenue, is that really “critical?”

The report raises a number of questions, but a good start is: How many more places do we need in the downtown that serve alcohol? And, if business has doubled in the last ten years, how much help does the downtown actually need?

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