An economic policy credited for transforming Gilroy into a
regional shopping destination may undergo retooling at the hands of
councilmen, who are considering shifting their emphasis to high-end
jobs.
Gilroy – An economic policy credited for transforming Gilroy into a regional shopping destination may undergo retooling at the hands of councilmen, who are considering shifting their emphasis to high-end jobs.
Councilmen disagree over how to update the city’s economic incentive policy, which allows retail and commercial enterprises to postpone paying sales tax revenues to the city during the critical first few years of business. In exchange, they guarantee the city a certain level of profits beyond the amount of tax credits received.
The city is rapidly maxing out its largest remaining tracts of land zoned for commercial development. The opening of the Super Wal-Mart in Pacheco Pass and the surrounding stores will complete that shopping center, while Gilroy Crossing has also leased out all its space.
During informal policy discussions July 22, some councilmen pushed to rework incentives to shift the city’s focus to high-end jobs.
“We instituted these economic incentives when this was a podunk town,” Councilman Bob Dillon said. “We’re past critical mass now. I don’t see why we should give any retail business an economic incentive to come here now.”
Mayor Al Pinheiro argued for a more measured approach.
“Let’s not get to a point where we’re taking away opportunities,” he said. “Why shut down an opportunity we have by saying, for instance, ‘no more retail incentives?’ ”
The city has extended $13.8 million in tax credits during the life of the economic incentive program, according to City Administrator Jay Baksa. The investment is expected to translate to a $4.7 million profit for the city.
For the moment, councilmen have deferred to city staff to flesh out changes to the city’s incentive program.
Community Development Director Wendie Rooney, who earlier in the year helped update the incentive program to allow small- to medium-sized shopping centers and stores to take advantage of the benefits, advocated a measured approach to any changes.
“There is still potential for new retail to move here,” she told councilmen. “I think council should be cautious before eliminating the entire category.”
