GILROY—A growing hub of outlet stores in the East Bay stands to challenge one of Gilroy’s revenue-generating powerhouses: the 145-store Gilroy Premium Outlets.
But local leaders are optimistic Gilroy’s outlet mall, which brought in nearly $2.9 million in sales tax revenue last year, will continue to attract droves of consumers. And that’s despite the addition of 35 high-end stores in August to the San Francisco Premium Outlets in Livermore.
A spokesperson for the Indiana-based Simon Property Group that owns both shopping centers said the company does not anticipate a negative impact in Gilroy.
“Located over 60 minutes apart, Simon centers provide consumers with choice,” a spokesperson wrote to the Dispatch.
The opening of the newest stores at the Livermore center, from Armani to Versace, did not have an immediate effect in Gilroy last month, the Gilroy Welcome Center reported. The nonprofit works to promote the city as a regional and international tourist destination and tracks visitors to the center from within the outlet mall.
“That tells me we have an amazing draw from around the world. That was encouraging,” said Welcome Center Executive Director Jane Howard. “The word is out about coming to Gilroy for shopping.”
While the organization tracked a 15 percent decrease in foot traffic in September 2012, when the Livermore outlet first opened, the numbers rebounded within two months, according to Howard.
“I’m not worried about it,” Mayor Don Gage said Tuesday, pointing to near 100 percent occupancy levels at the Gilroy complex since 2010.
Gage said traffic problems around the Livermore outlets are significant, and that the Gilroy mall is better positioned geographically. The Gilroy Premium Outlets are located directly off of U.S. 101, while the Livermore center is 1.2 miles from its Interstate 580 exit.
“It’s a disaster up there,” Gage said. “It’s pretty congested.”
Others said the reputation the Gilroy Premium Outlets has for deals and its healthy occupancy rate bode well for the center’s future. Of all available commercial space, 97 percent is currently occupied, the Simon Property Group reported to the Dispatch.
“The reputation Gilroy has and the quality stores we already have in place will probably continue to be a draw for many of our out of town visitors and tourists,” Gilroy Chamber of Commerce CEO Mark Turner said. “I think we’ll continue to do OK. They [the Livermore center’s management] are probably concerned about the traffic we’re getting down here.”
Those looking for a “high-end shopping experience” will likely turn to the Livermore shopping center due to recent additions, Howard said. But Gilroy has a “nice cross-section of stores from Michael Kors to Kate Spade and Abercrombie & Fitch.”
Six of the top 25 businesses to generate the most sales tax revenue in the last quarter were stores at the Gilroy Premium Outlets. In 2014, the outlets collectively generated nearly $2.9 million in sales tax receipts, according to city revenue officer Irma Navarro.
The shopping center as a whole has produced more than $2.7 million each year since 2011, data provided by Navarro shows.
“Those are incredible numbers,” Howard said. “There are communities out there that would kill for that.”
The city of Gilroy depends on those dollars, Gage said. He told the Dispatch the city could not get by without it.
“The outlets and the auto mall are the two most important sales tax generators in the city,” he said.
• 2014: $2,887,991
• 2013: $2,834,292
• 2012: $2,860, 600
• 2011: $2,757,352
• 2010: $2,444,576
Source: city of Gilroy
