Thursday, August 16, 2007

Sales Tax Revenue and Ponte Vista

Here are two images that I hope will help explain a little bit more why building many units at Ponte Vista will be bad for the residents of all of Los Angeles.

This first image shows the Ponte Vista site in red and surrounded by about the five-mile radius that Bob believes so much revenue will be generated inside.

The light blue boxes represent new car dealerships within the five-mile radius and the green boxes represent major shopping malls or areas within the five-mile radius.

The light pink area shows the area within the City of Los Angeles, also in the five-mile radius.

Cities need sales tax revenues to fund infrastructure and other items vital to the residents of those cities. This is a fact that is also shared with Property Tax revenues. The City of Los Angeles receives $0.09 of every Property Tax dollar collected within the City of L.A., with $0.76 of each dollar going to schools.

This post focuses more closely with Sales Tax revenues, where they will be generated, and which cities and residents will gain the most, and lose the most, if a large development is built at Ponte Vista.

This second illustration shows that for every dollar in Sales Tax revenue generated within the City of Los Angeles, only $0.10 of each dollar of collected Sales Tax revenue goes back to the City of Los Angeles to help fund government costs and infrastructure .

Here is a basic problem with having a large development at Ponte Vista; The Sales Tax revenues generated by folks within Ponte Vista, and other parts of San Pedro, don't fund the necessary costs and infrastructure that this area needs now and into the future.

If you look closely at the first illustration, where can you find any new car dealerships, fine furniture stores, major malls or major shopping centers, of other businesses where higher amounts of Sales Taxes are generated within the light pink area of the illustration.

The City of Los Angeles, within five-miles of the Ponte Vista site, simply does not have enough businesses that can produce enough Sales Tax revenues to support the area.

All the real major Sales Tax generating businesses are outside the City limits and the cities where those businesses are will get the Sales Tax revenues given to them by residents of Ponte Vista and the rest of the five-mile area.

Who will pay for the goods, services, and infrastructure needed for a large Ponte Vista development, as far as Los Angeles goes? Large amounts of Sales Tax revenues generated within other parts of Los Angeles, specifically the San Fernando Valley, will be burdened with giving funds generated there, to areas like San Pedro, where there are much fewer funds generated.

There has always been ongoing complaints that San Pedro and the Harbor Area received less than "their share" of L.A. City spending. If the residents in these areas can't contribute to revenue streams the city needs, it may be no wonder why the area has been left out.

If a large number of units are built at Ponte Vista, then perhaps, even more of rest of San Pedro may suffer because of a larger concentration of residents at Ponte Vista demanding more services from the City of Los Angeles, that the rest of San Pedro can call for.

It is absolutely true that a new Target store near the Ponte Vista site will generate Sales Tax revenue for the City of Los Angeles. The new Target will be one of three within the five-mile radius, and the only one within the limits of the City of L.A. This new store will bring much needed revenue into the area.

The fact that there are no more new car dealerships in San Pedro and near the Harbor Freeway, within the limits of L.A., mean when you buy a new car, the Sales Tax you pay on such a major item, goes to other cities, unless you find a new car dealership where you buy a new car within L.A. City limits.

If you don't shop in San Pedro, you are also contributing to other cities and their Sales Tax revenue.

Ponte Vista will put a drain on the L.A. City economy. Not enough Property Tax revenue can mitigate that. Also, since so many seniors wish to move into a Senior Housing section at Ponte Vista and move their Proposition 13 entitlements with them, one time, that means that even less Property Taxes will come from Ponte Vista, and the rest of L.A., including San Pedro will have to suffer.

The City of Los Angeles can not afford such a massive residential complex in an area where there is not enough revenue generation for that city. We all already contribute to the revenues of Torrance, Rolling Hills Estates, Carson, Long Beach, and other areas, when we purchase new cars, new furniture, new clothing, and other goods in those cities.

In 2003, we bought our Saturn within the City of L.A., so at least we contributed some Sales Tax revenue for L.A. Of course we bought it in the San Fernando Valley, but hey, it's still in L.A.

Police, Fire, infrastructure, City goods and services will need to be provided to all the residents at Ponte Vista, and the City of Los Angeles simply cannot afford to have such a large development so far away from City commercial areas.


Anonymous said...

Isn't Ponte Vista only 1950 units?? what is that, like 6,000 people? I'm sure that LA will be fine since they can already handle nearly 4 million people.

M Richards said...

Thanks anonymous 5:34,

Sure, 6,000 more folks is only a drop in the bucket of the number of residents in L.A., but look where they are going to live and the locations where they are really going to shop.

Bob is claiming over $100 Million Dollars coming into the five-mile radius to help with "local economy". The problem with that is that the local economies that will benefit most, will not have to support goods and services that the City of L.A. must provide to all of these new residents.

If a whole lot of folks move from other parts of San Pedro into Ponte Vista, and there is backfill from others moving into older homes, they too will probably shop, buy cars and upscale furniture from businesses outside the city limits of L.A., but within the five-mile radius.

Torrance, with its new car dealerships, malls, and large businesses will gain lots of Sales Tax revenues from new residents of Ponte Vista and the backfill San Pedro area, but those Sales Tax dollars will benefit Torrance and not San Pedro/L.A. which will have to come up with revenues to support all the new residents.

Target may help, but it needs to stay crowed with lots of buyers almost 24/7 to make even a dent in the revenue comparison that will be found even in Rolling Hills Estates, which has a mall of its own and Peninsula Center to boot.

San Pedro's downtown businesses will also need to have lots of shoppers and a whole bunch of really hungry folks to help generate revenue that can be spent in and around San Pedro, IF the government of the City of L.A. doesn't keep ignoring San Pedro, like it always seems to do.

Anonymous said...

wow Mark, you've outdone yourself. this is another great analysis of why bob's supporters are being hoodwinked.

keep up the great work!