Gilroy
– The city’s economic engine continues to gain steam, and the
future looks bright.
In Gilroy, retail stores posted about $218 million in sales
during the third quarter of 2003, a $23.5 million growth compared
to the same time period in 2002, said a report released Tuesday by
the California State Board of Equalization.
Gilroy – The city’s economic engine continues to gain steam, and the future looks bright.
In Gilroy, retail stores posted about $218 million in sales during the third quarter of 2003, a $23.5 million growth compared to the same time period in 2002, said a report released Tuesday by the California State Board of Equalization.
Bill Lindsteadt, executive director of Gilroy’s Economic Development Corp., attributed the growth to new retail that opened in Gilroy during that period, including a Costco and Lowe’s Home Improvement.
“More retail, especially the bigger stores, along (Highway) 152 and (U.S.) 101, mean people don’t have to go to Salinas or San Jose to find what they’re looking for,” he said.
The stores also act as a magnet for regional shoppers from as far away as Hollister and Prunedale.
Lindsteadt said he expects the city’s taxable sales to continue to rise as a new Chuck E. Cheese’s, Super Wal-Mart, Krispy Kreme Bakery, Party City and a gas station are planned for the east side of Camino Arroyo north of 152. Additionally, a new Kohl’s in Pacheco Pass Center is scheduled to open Oct. 7.
Lindsteadt estimated those stores will earn an additional $400 to $450 million in taxable retail sales per year. One percent of all taxable sales go toward the city’s General Fund, so the new stores will provide the city between $4 million and $4.5 million per year. About $2.02 million went to the city for last year’s third quarter taxable sales earnings, said said Irma Navarro, the city’s revenue officer
Projected taxable sales for the city in the third quarter of 2003 were about $202 million. Gilroy’s taxable sales were about $16 million more than what was projected.
Retail sales contribute about 35 percent or $8 million to the city’s General Fund. Revenue from hotel taxes, a utility tax and taxable sales from manufacturing and wholesale businesses also contribute to the General Fund. The General Fund helps pay for salaries of firefighters and police officers, as well as employees in the community development and community services department and general administration. At the end of the 2003 – 2004 fiscal year, the city’s General Fund balance was slightly more than $22 million. .
Other parts of Gilroy also soon will see new development, Lindsteadt said, including the southeast corner of First Street and Santa Teresa Boulevard and the ten acres south of Home Depot at 8850 San Ysidro Ave., both of which have contracts submitted on them. Additionally, a small retail center is in the works for the northeast corner of Forest Street and Leavesley Road. A new building on the corner of Miller Avenue and First Street, nearing completion, will be used for retail and offices.
Taxable sales in the state rose 5.6 percent between the third quarter of last year and the same quarter of 2002, continuing to follow an increasing trend over the past five consecutive quarters, according to the report.
During the third quarter of 2003, California consumers spent $118.5 billion on transactions that have sales and use taxes, up $6.3 billion from the same quarter in 2002. Almost $8.3 billion was spent at retail stores during last year’s third quarter, a 7.6 percent increase from the same quarter in 2002.
Statewide, new car dealers and building material dealers each saw about a 10-percent increase in taxable sales from the same time in 2002, with new car dealers posting $16.2 billion and building material dealers posting $7.6 billion. Construction contractors saw a more moderate growth of 3.3 percent, totaling $4.8 billion in taxable sales.
While motorists statewide spent slightly more on gasoline during the third quarter of 2003 – a 1.9 percent increase to total 4.1 billion gallons – that growth might be attributed to gasoline’s average price, which rose about 17 percent since 2002’s third quarter.
Bad news came for business and personal services during the third quarter of 2003, with taxable sales decreasing 1.5 percent to $5.5 billion compared to the same time in 2002.
Willie Villasana, owner of Bookkeeping Systems Design and Service on First Street, said his business has seen a slight decrease since 2003 but generally has remained stable. More noticeable to him has been the struggles of some of his clients, primarily small businesses that either closed or declared bankruptcy.
But, with enough local appeal and demand, Villasana said some of his small-business clients have been doing some big numbers in Gilroy.
“So much of it depends on the economy, and the economy is weak right now,” he said. “But it also depends on what type of business you’re talking about. You look around and you’ll see Mexican restaurants, taquerias and Mexican grocery stores springing up on every corner. That’s the market here, and they’re able to do well.”
Andrew Eller, supervisor at the Puma store at Gilroy Premium Outlets, said that store has seen about a 25 percent increase in sales since 2003, topping numbers above and beyond their expectations.
“We’ve seen a phenomenal increase in sales. You wouldn’t believe it,” he said. “We’ve blown away last year’s plan. It’s incredible.”
Eller said he expects sales to slow down between now and when the holiday shopping season begins around Thanksgiving. While the economy has attacked many other businesses, Eller said the store he works at has thrived in spite of it.
“People tend to go to outlets to shop when the economy is down,” he said. “I know sales at (Puma’s) concept store in Valley Fair (Shopping Center in San Jose) have been down. But we’ve been amazed.”
