City Council took unprecedented steps to prohibit the proliferation of payday lending and check cashing businesses within Gilroy, preventing them from expanding or even relocating to the Garlic Capital, following unanimous votes to amend the City’s zoning ordinance and waiving any further readings.
Gilroy has now joined eight other Bay area cities that have prohibited or limited payday lending within their jurisdictions, in addition to Santa Clara County, following Monday night’s action by City Council.
According to Gilroy Planning Manager Sue Martin, payday lending businesses are primarily located in low-income areas and 17 other states have banned the institutions altogether or “severely restricted” them.
“(Customers) often get stuck in a cycle of debt they often can’t get out of,” Martin said, referring to a common cycle where a first-time customer will get an advance of more than $300 to pay bills, and then will take out another loan to repay the lender to pay off the first loan on time.
There are five check cashing and payday lending businesses within Gilroy’s borders, but only four have business licenses through the City, according to Gilroy Planning Manager Sue Martin.
Mayor Don Gage took a few minutes to acknowledge Executive Director David Cox of St. Joseph’s Family Center. Gage said Cox first called him with concerns about the type of interest the businesses typically charge – often approaching 460 percent on a short-term loan, according to City staff.
“When (Cox) called me and I looked at the amount of interest that was being charged, it made me ill,” Gage said. “We might want businesses to have licenses, but unless we actually approach them and check the licenses, this kind of stuff will slip by us. We need the eyes and ears of the community.”
Harbor Freight Tools acquires 10-year variance for freeway sign
City Council granted Harbor Freight Tools, located in Gilroy’s South Valley Plaza Shopping Center, a variance request Monday. This allows them to add 147-square-feet of signage to an existing freestanding sign pointed towards U.S. 101.
The sign is located in the shopping center, near the intersection of U.S. 101 and 10th street. In order to increase the visibility of the sign, also occupied by Guitar Center, Arteaga’s Market and Burlington Coat Factory, nearby trees have been topped by the property owner, West Valley Properties.
Though the current maximum area allowed by City municipal code is 330 square feet, the sign occupies 359 square feet because of City approval of a special sign permit, according to David Bischoff, who is in charge of special projects for the City. The Planning Commission denied the variance request in a vote of 5-1 on July 18, 2013, and the property owner appealed – but Council approved the request on the condition the variance expires after 10 years.
“The private parties can work it out by the end of the temporary variance,” said Mayor Pro Tempore Perry Woodward.
Various representatives for the property owner (Harbor Freight Tools), along with others, made the case that the additional signage will help increase the amount of tax dollars flowing into the City’s coffers.
“A large part of being successful in today’s economy is being able to be visible to the customer as well as attract potential new customers,” said Steve Frazier, project manager with Coast Sign, Inc., representing Harbor Freight Tools. “It is critical to capture the transient traffic passing on the 101 freeway to achieve long-term success.”
But City staff argued the property owner of the shopping center, West Valley Properties, should have limited the amount of freeway signage for the other businesses so it could be allocated for new businesses, Bischoff added.
