Mission Gateway developer Tom Valenti of the Cameron Group in New York spoke with a city council member at the first open house to explain the Gateway development agreement earlier this week.
Will Walmart be part of the Mission Gateway Community Improvement District that will impose additional sales tax on transactions in the center??And do some council votes for the project hinge on whether the giant retailer is in or out?
?The request is on the table,? developer Tom Valenti told Mission council members Wednesday. ?I think I?ve done the best I can do to convince them (Walmart) to participate in a half-cent CID.? But, Valenti asked the council, ?if they don?t say ?yes,? don?t kill the project.?
Councilor David Shepard, who chairs the Finance and Administration Committee, told Valenti, ?I think this is an issue that two or three around the table are willing to die for,? meaning that some councilors might consider voting against the project if Walmart is not included. Articulating his own position, Shepard said, ?It doesn?t bother me (if Walmart is not in)?if the deal still works,? to fund the public assistance bonds.
The additional sales tax charged on businesses in the CID is just one portion of the revenue stream that would pay the debt service on bonds issued by the city to support the development. Walmart had initially refused to participate in the CID, citing a competitive disadvantage to Target and other retailers if they charged the additional one-cent sales tax. However, if Walmart agrees to join the CID, the additional sales tax on all retailers can be lowered to one-half cent and will produce an estimated $600,000 more than if one-cent is levied without Walmart.
Valenti said he has asked Walmart to amend the signed lease to participate in a one-half cent CID. Councilor Amy Miller was one who said she does not believe the Walmart contention that shoppers will compare prices including the sales tax difference between stores rather than just the retail price.
Shepard pointed out that regardless of the CID resolution, that Walmart will be generating revenue to pay the bonds from other sales and property taxes that are part of the financing mix. The CID sales tax is estimated to produce up to $16 million of the $68 million in debt service revenue.
The financing plan dedicates additional tax revenue and assessments generated by the project to pay off $30 million in public assistance bonds and pay back the city its $12 million investment in storm drainage infrastructure at the site.
A planned final vote by the eight-member council is now expected January 16, a date delayed to give members time to review a final development agreement.
Source: http://pvpost.com/2012/11/16/walmart-asked-to-charge-gateway-cid-tax-13804
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