GILROY
– The business-friendly City Council seated earlier this month
could by the end of January turn Gilroy into an entrepreneurial
haven.
GILROY – The business-friendly City Council seated earlier this month could by the end of January turn Gilroy into an entrepreneurial haven.
At its Jan. 16 and 17 retreat, City Council will discuss two proposals aimed at stimulating the Gilroy economy from its industrial side to its mom-and-pop retail side.
Although details are only in the brainstorming phase, one proposal would make it easier for industrial companies to get financial breaks when they open a business in town. The other would make it vastly cheaper for business owners to improve their downtown restaurants and retail shops.
And several City Councilmen, including Paul Correa – whose reputation settles on business watchdog more than it does business sympathizer – seem ready to make these changes to Gilroy’s existing economic incentive program.
“I’m in support of economic incentive policies when they have a positive impact on the community,” Correa said. “We have to take a look at what we already have with a critical eye and see if it needs any tweaking.”
According to many city leaders, the system does need tweaking if Gilroy wants to revitalize its downtown and make the city more than the bedroom community some say it has become.
A growing downtown
City officials are drawing new commercial boundaries for Gilroy that would expand the downtown core beyond Monterey Street (from First to Tenth streets) to Eigleberry and Railroad streets (also from First to Tenth streets).
Since this month, the city has been waiving costly development fees for Monterey Street business owners. Now, Council wants to consider waiving those fees for business owners along any street between Eigleberry and Railroad.
“There’s plenty of interest along Monterey Street, but there are only about two vacant properties there,” said Bill Lindsteadt, the executive director of the Gilroy Economic Development Corporation. “If we expand the zone, there would be about a dozen vacant lots that would be eligible (for incentives).”
Lindsteadt said when City Council approved waiving the fees for businesses in the so-called Commercial 2 (C2) zone, it was at the behest of a special downtown advisory panel he sits on. The panel did not realize, Lindsteadt said, that the C2 zone did not apply to Eigleberry and Railroad.
“We dropped the ball on that one, and now we’re hoping Council can get that back on track,” Lindsteadt said.
For a time it looked like Council would not be able to expand the incentive deal. Bringing Eigleberry and Railroad street businesses – which are in the so-called Commercial 1 (C1) zone – into the incentive program would mean all C1 businesses could get breaks on their impact and permit fees. Even businesses as far away from downtown as Santa Teresa Boulevard or Arroyo Circle would have a legal right to the financial breaks.
Eventually, the City’s Community Development Director Wendie Rooney found a way around the legal loophole. Rooney says the city can expand the downtown incentive program to Eigleberry and Railroad by making that area the “downtown district” within Gilroy’s still unfinished downtown specific plan.
“I’m not saying it’s politically acceptable necessarily, but it is legally fair,” Rooney said.
Mayor Al Pinheiro does not believe there will be an outcry from business owners around town if Council expands the incentive program. People realize, he says, that downtown is in need of revitalization and that currently downtown business owners are at an economic disadvantage.
“You don’t hear people saying ‘I’m not going down First Street because it’s not lit enough,’ ” Pinheiro said.
The boundaries are especially important for any developer who wants to launch a business downtown. Developers will save more than $20,000 on waived storm drain, police, water, fire protection and public facilities “impact fees.”
The package includes other waived permit fees and a reduction on parking requirements for downtown businesses. There is an automatic 25 percent reduction in required parking spaces and an additional 25 percent reduction if certain conditions are met.
Livable wage jobs
The second component of the new and improved economic incentive program involves Gilroy’s industrial sector.
Lindsteadt will not divulge any specifics on the proposal he is to unveil in January at the retreat. However, he says he has developed an incentive program that will appease two disparate parties – industrial companies that want to set up shop in the least expensive area possible and job hawks like Correa who want Gilroy to bring in more “livable wage” jobs.
A livable wage job is one that pays a market rate salary and comes with standard health benefits.
Currently, Gilroy operates under a “job offset” incentive policy for industrial companies. For instance, companies can get a $2,000 break on development fees for each job the business generates, as long as wage earners make $35,000 a year plus benefits.
If those workers live in Gilroy, the company can get a $4,000 break.
A new policy would involve a combination of increasing and/or decreasing the financial break and the salary/benefit minimums. The new policy would have to make it easy for new companies to move here and at the same time guarantee a certain quality of life for the workers that fill the open positions.
“We need industrial jobs here,” Lindsteadt said. “About 1,600 people here lost their Silicon Valley jobs. I believe we can put together a policy that works for everybody.”
