I have to admit to a guilty pleasure. Over the years I have been
amused with some of the actions taken by off-the-wall political
groups in Berkeley.
I have to admit to a guilty pleasure. Over the years I have been amused with some of the actions taken by off-the-wall political groups in Berkeley. I have bad news for you. A group of activists has come to Gilroy to propose something just as self-destructive as any headline from the Bay Area.
By now I’m sure you have heard about the Pacheco Pass Center and how it will employ approximately 1,000 people and provide approximately $2 million in annual revenue to help fund Gilroy police, fire and emergency medical technician services.
The center will also provide more than $6 million towards public infrastructure improvements, and make a significant contribution to the multi-million dollar upgrade to Highway 152. Opposition groups funded by labor unions in San Jose are planning to distribute petitions to put a referendum on the ballot intended to stop Pacheco Pass Center.
This referendum would overturn a recent 5-2 Gilroy City Council vote approving the development agreement between the city and Newman Development. The irony is that the people they would be hurting the most are the residents of Gilroy.
The purported referendum aims to eliminate the financial incentives Newman Development will use to generate new business and sales tax to the area. These incentives are used by municipalities to entice retailers, restaurants and developers to make multimillion-dollar investments in their communities. The City of Gilroy has given similar financial incentives to other large retail developments in the recent past.
Make no mistake about it, the referendum effort is aimed at Wal-Mart, even though the company won’t receive a dime of the financial incentives in question and Wal-Mart has stated its intent to relocate and upgrade its presence in the Gilroy area with or without Pacheco Pass Center. But the referendum would severely limit, if not scuttle entirely, the shopping center’s ability to entice other national retailers and restaurants to Gilroy.
Referendum supporters have described the $5.4 million in potential incentives as a giveaway and risky for the city. Nothing could be further from the truth. The reimbursement or waiver of these fees is actually contingent on a strict, carefully constructed agreement.
Before any fees are reimbursed or waived, retailers must generate significant taxable revenues and must sign a lease for a term of at least five years.
If they fail to meet these requirements, they are ineligible to receive the waivers or reimbursements. If existing Gilroy retailers choose to relocate to Pacheco Pass Center, the city will not have to pay any disbursement (as is the case with Wal-Mart).
So with all of these requirements it is likely that the actual financial incentive package will be substantially less than the hypothetical maximum of $5.4 million. In addition, the city has many opportunities through the term of this agreement to terminate the development agreement if Newman Development doesn’t meet numerous contractual commitments. In effect, all of the risk to the city has been eliminated.
City officials and department heads have had the opportunity to discuss how the Pacheco Pass tax revenues would be used.
According to Gilroy Mayor Tom Springer, these funds would go a long way towards providing a new world-class emergency medical technician program and funding police and fire safety services. The Pacheco Pass Center is expected to be the most significant outside funding source for these programs for years to come.
Newman Development will also provide additional funding to immediately accelerate the purchase of important public safety items such as a new aerial apparatus for the fire department and a new public safety radio system.
It is clear that the proposed referendum is all about Wal-Mart and has very little to do with the merits of the Pacheco Pass Center or Newman Development.
Let’s talk for a moment about Wal-Mart. Over the past few years the company has given back more than $125,000 to local organizations such as the Gilroy Unified School District, 4-H, the Salvation Army, and the Mexican American Community Services Agency. Wal-Mart provides working families with everyday value and a convenient shopping experience. The company also employs hundreds of people from the community, providing good jobs with benefits.
As the lead for this project, let me be clear that we are confident the citizens of Gilroy will reject this effort to threaten the prosperity of their city. I think the proponents of the referendum should be asking themselves if this is the most responsible way to make their point.
Over the past four years, we have worked closely with Gilroy city officials and staff, community leaders, and members of the public to develop a plan that works for everyone. We have received nothing but encouragement from the city.
While Gilroy and Berkeley are both popular destinations, Gilroy shouldn’t let some of Berkeley’s infamous notoriety come to town – say NO to the referendum and NO to reckless politics in Gilroy.
Guest columnist George Akel is a managing member of Newman Development Group, which is based in San Francisco. Anyone interested in writing a guest column may contact Mark Derry at 842-6400.
