Gilroy’s sales tax was flat in the fourth quarter of 2012 as a direct result of fewer shoppers spending at the Gilroy Outlets. It’s the first time in 12 quarters that the City’s sales tax receipts have leveled off.
“We were expecting it,” Mayor Don Gage said.
The fiscal hiccup won’t be enough to derail any plans the City has for sales tax receipts, however.
“If you add everything together, we’re still positive,” Gage observed.
The Paragon Outlets in Livermore opened to much fanfare in November 2012 – giving the Gilroy Outlets a run for its revenue – but horror stories of long drives on roads not equipped to handle large amounts of traffic are surfacing, Gage said.
“If you live here, why would you drive all the way up there?” the mayor asked.
Still, a rival hub of outlet stores within driving distance opening just before Christmas is directly responsible for the City’s small monetary bump in the road, according to Gage.
“If you open up something new then people are going to be curious,” the mayor noted.
It appears that the Simon Property Group, Inc. – owners of Gilroy Premium Outlets – weren’t going to take the chance that heads would be permanently turned. Simon Property Group purchased the outlets in Livermore in December and changed the name to Livermore Premium Outlets. The mayor finds that business strategy appealing.
“They don’t sell the same thing up there that they do here,” Gage reasoned. “They cater to different clienteles.”
As for the future of one of Gilroy’s prime economic engines, Gage is in no doubt.
“I’m not worried, they don’t have one empty store,” he said.
Updates to follow.
