The Gilroy City Council and members of the Gilroy Economic
Development Corporation met Monday night to hash out whether the
city would be willing to fund up to nearly 80 percent of the EDC’s
$200,000-plus budget.
The Gilroy City Council and members of the Gilroy Economic Development Corporation met Monday night to hash out whether the city would be willing to fund up to almost 80 percent of the EDC’s $200,000-plus budget.
In 2007, the city shrunk its contributions to the EDC from $120,000 to $96,000, according to the EDC. Now, EDC members say the time is right for the city – with it’s $21.4 million reserve – to up its funding to help the organization support business growth in Gilroy.
The EDC provided the city with options: Do nothing, restore funding levels to $120,000 or increase contributions to $160,00 or $180,000.
Though the topic provided some mixed feelings amongst Council members and EDC reps, both sides expressed some optimism that they could reach a plan to fund business development opportunities in Gilroy for the long term despite recent poor economic settings.
“The last few years have been difficult for us,” EDC Board Chairman Kurt Michielssen said.
According to numbers provided by the EDC, Gilroy has a 23 percent vacancy rate for industrial properties and a median household income of $75,000.
Gilroy’s unemployment rate was more than 16 percent in 2010, according to the Bureau of Labor Statistics. Construction jobs fell by more than half between 2005 and 2009, according to EDC figures.
EDC President Tammy Brownlow said if the city doesn’t increase funding, the EDC would like operate on an ongoing deficit.
City Administrator Tom Haglund said the city’s current economic outlook was different from several years ago, which could allow the city to throw more cash the EDC’s way.
“It’s our hope to bring that funding back,” he said.
Mayor Al Pinheiro said Gilroy shouldn’t lie in wait while other city councils and EDCs are increasing their efforts
“If we become quiet, we’re just going to be amongst everybody else. That’s kind of the way I’m looking at it,” he said.
Several Council members and EDC leaders agreed any plan the two sides come up with will need to include ways to measure just how efficient the EDC uses city funds.
Local developer Gary Walton suggested eventually approving a plan with “built-in resiliency.”
“What we really need to work on in the plan is to create resiliency in this community in the face of economic circumstances,” Walton said.
For example, Walton said, the plan should be able to work around a scenario similar to what happened in 2008, when gas prices went up and sales tax revenue dropped.
“I think this community is really at risk without a strategic plan that looks at, “How we will make this community grow?'” Walton said. “What if the world doesn’t come back to the way that it was?”
Councilman Peter Arellano said he was “just a little disappointed” that the EDC was asking the city for more money.
“There’s no partnership when we’re providing more than 50 percent of the budget,” he said. “What I hear is, ‘Give us more money and we’ll work on it.’ The taxpayers are getting squeezed. And we’ve been so careful with (city money) and so tight with it, and now we’re just going to let it go? I don’t think it should work that way. I’m sorry. That doesn’t work. It doesn’t work with me.”
Pinheiro said he disagreed with Arellano’s outlook.
“Economic development is for the city of Gilroy,” Pinheiro said. “They are not asking for anything that is for some private sector.”
Councilman Bob Dillon also said he didn’t agree with Arellano, and added he had faith the economy would improve.
“Seems to me you’re kind of down on the home team because they’re not winning right now,” Dillon said to Arellano. “I’m beginning to get a little optimistic about the economy.”
EDC member Rob Oneto, though, said Arellano was asking “valid questions.”
“Whether its $5,000 or $50,000,” Oneto said. “It’s a tough decision. There’s a lot of people out there that really aren’t happy about spending money.”
Councilman Perry Woodward said the city needed to keep the impending California high-speed rail project and the possibility of environmental or “green” businesses.
Dillon also said the high-speed project would carry a lot of weight.
“I think everything in this town is on hold until we find out what high-speed rail does,” he said.
Council approves letter opposing Caltrain cuts
The Council voted 7-0 Monday night to direct staff to draft a letter in opposition to possible cuts to Caltrain service south of San Jose.
Caltrain announced in January it could eliminate service to its southernmost stations, including Gilroy and Morgan Hill, if it didn’t close a $30.3 million budget shortfall by July.
Woodward, who serves on the Valley Transportation Authority board of directors, last week said the VTA could loan money to the San Mateo Transit District to cover that organization’s contributions to Caltrain to save service levels for the next year.
Woodward said there was a misconception in North Santa Clara County “that ridership is so low (in South County) that its not important to us.”
Woodward said that isn’t the case.
