Certainty?
On Tuesday, the city council received an update on Sales Tax collection from the fourth quarter of last year (you know, the quarter during which retail businesses make all their money for the year.)
Given the local media’s obsession with controversy (and the spelling mistakes of their competitors) I can understand how this meaningless item slipped past.
As Alamedans debate development, Alameda’s sales tax slide continues.
Compared to 2005, the 4th quarter of 2006 saw sales tax receipts decline by 2.2%. during the ame period, the Bay Area saw increased of 1.6% and the state saw .1%
Given the reorganization taking place at Alameda Towne Centre, some of this decline is to be expected.
What is worrying is looking at the changes in the Top 4 Categories:
Category Represents Change 4th qtr ‘05 to ‘06 Collected in 4th qtr
Food Products Restaurants, etc up 7.1% $358,451
Transporation Autos/Yachts Down 8% $346,839
General Retail Stores, etc Down 9.1% $302,832
Biz to Biz nuf said Down 5% $273,975
Alameda’s #1 sales tax generator in the 4th Qtr of 2005, Transporation, dropped to number 2. The staff report indicates that this is in spite of a 7% increase in auto sales.
A major future concern should be that Alameda’s #1 tax generating business, Goode Toyota changed hands and the new owners have announced that they are leaving in the next couple of years. Transportation represents 25% or Alameda’s Sales Tax generation. This is going to have a large effect on tax collection in the city.
Two other interesting points:
1) I was surprised to see that Park Street, south of Lincoln (meaning without the auto sales) contributes about 60% of the sale tax receipts that Alameda Towne Centre contributes. While I am sure that reconstruction at ATC will boost the receipts from ATC, I was still surprised to see Park Street so close to ATC in overall collection in the 4th quarter. (also, “other” areas contribute nearly 40% to Alameda’s sales tax collection).
2006 Pct of Receipts in 06
OTHER $538,873 39%
Park - N $294,323 21%
ATC $263,630 19%
Park - S $167,887 12%
Webster - N $79,970 6%
Webster - S $28,383 2%
2) The Staff report indicates that the top 25 businesses in Alameda represent 48% of the quarter’s sales tax receipts.
It is enough to understand the economic concerns voiced by the majority, if not unanimity, of the council.
I apologize for bothering you with trivialities, you can now return to more important issues, like whether or not HOMES, a community group, hates poor people.
Lauren Do
May 18th, 2007 at 4:49 pm
Retail sales tax? We don’t need no stinkin’ retail sales tax. As long as we have Measure A and the elusive “quality of life” it has brough to Alameda, we don’t need to concern ourselves with a decline in retail sales tax collection.
Kirk Knight
May 20th, 2007 at 8:04 pm
I heard these stats about six months ago and was quite surprised at the strength of Park Street. It’s tragic that so few people comprehend that local car dealerships are going the way of newspapers and dinosaurs due to the Internet disintermediation.
BUT WAIT, HERE’S $400,000 A YEAR
Would lovely Alameda like an additional $400,000 a year in tax revenue with NO ADDITIONAL TRAFFIC?
Allow the rehab and conversion of 25 fourplex apartment buildings, to owner occupied condominiums each year and voila, we generate about $400,000 in transfer taxes, plus more property taxes (which are shared mostly with state and county).
There are over 500 lovelybuildings constructed before 1942, most as single family homes converted to apartments between 1930 and 1945, that could really be appealing if we fixed them up, kept the period details, and sell to 4 owner-occupants in the form of condominiums.
$400,000 a year…increasing for over 20 years…no new traffic…. no new construction…. same or lower density…more neighborhood stability…more sense of Alameda pride…..want to play?
Kirk Knight
Mark
May 23rd, 2007 at 8:39 am
I admire Kirk’s creative thinking and this is an interesting scenario, but for this impact we would need a large number of these conversions. What occurs to me is that most of these converted Vic’s are little money machines for the owners. I don’t see them running in droves to sell them. I know a long time rental owner who is selling off his buildings, mostly originally real apartment buildings. I asked how the buyers manage since it seems they have mortgaes which would require they subsidize the rents or raise them astronimically. He said the buyers are looking at the long term, but admitted that if he were trying to get into this market today he wouldn’t buy his buildings from him. He didn’t metion TIC but perhaps that’s how the buyers are managing to purchase. As they have sold I have not noticed mass turn over in tenants. It’s easy to observe people moving in and out. I don’t know what protections renters have in this town, except Barbra Kerr vehemently objected to any form of rent control.
dave
May 24th, 2007 at 5:45 am
Mark:
It never ceases to amaze me what people will pay for rental properties around here. In the rest of the nation East of Contra Costa, rentals trade btw 5-9 times gross annual rent, with obvious local and regional variances. They generally cash flow with only 20-30% down (again, varies). But investors in the Bay Area routinely accept negative cash flow, sometimes substantial negative cash flow, on rental properties. Lenders show similar “irrational exuberance” by financing these deals. I’ve never been able to get my heaqd around this, but I’m bright enough to know I can’t change it, so I buy REIT shares instead of local buildings.
Every Day I Write the Book « Stop, Drop and Roll
December 31st, 2007 at 9:28 am
[...] One of the most underreported issue, sales tax receipts continue to fall [...]