City’s financial future rests with brisk holiday sales
With numerous projects in the works and the money to fund them
tight, officials from the City of Gilroy are hoping that retail
stores in the Gilroy Premium Outlets have a green Christmas.
City’s financial future rests with brisk holiday sales
With numerous projects in the works and the money to fund them tight, officials from the City of Gilroy are hoping that retail stores in the Gilroy Premium Outlets have a green Christmas.
As retail sales go, so goes the fortunes of the city that depends so much on them.
“We’re just like every other city in the state that has retail stores. We rely heavily on them for sales tax revenue,” said City Administrator Jay Baksa. “The outlets and the car dealerships account for 50 percent of all city revenues. What they bring in is vital to us.”
The city generates roughly $11 million annually in sales tax revenue, $11.2, in fact, in the year before the Sept. 11 attacks. Since the decline of the tech sector and the nationwide economic downturn that followed, this year the city is expected to generate $10.8-$400,000 less than what the city received a year ago.
“Right now this is the most critical part of the year-the Christmas season,” said Baksa. “And what they (outlets) bring in will be a pivotal part of our budget analysis in January and February. Right now, it’s just wait and see what happens.”
According to Gilroy Economic Development Corporation Executive Director Bill Lindsteadt, the city is now in a position where it could not survive without the outlets.
“In simple English, it is the outlets and the sales tax revenue generated from them that allowed the city to weather the recession of the early 1990s.”
Since 1996, the year that the outlet’s final development phase opened, retail sales in Gilroy have jumped from $595 million to $1.1 billion in 2001, thanks mostly to out-of-town shoppers who don’t mind if they “drive a little” to find bargains.
“Every year, retail sales go up about $100 million,” Lindsteadt said.
But Lindsteadt, although positive about the future of the economy, isn’t surprised about projections that number will drop in fiscal year 2002-2003.
“This year, 75,000 people were laid off in San Jose,” said Lindsteadt. “Six thousand of them live in Gilroy. Eventually, that’s got to affect on local retail sales-tax revenues. If you’re not making it, you can’t spend it.”
The city relies on sales tax revenues to fund services such as police, fire, parks, roads and salaries. As a result, a dip in revenue at Christmastime would have a rippling affect.
“It really impacts our budget and affects everything,” said Baksa.
Without being able to bank on future revenues from new projects that will bring the likes of Lowe’s and Costco, the city would be in deep financial trouble, said Lindsteadt.
So far, the sprawling 145-store outlets complex just east of U.S. 101 at Leavesley Road has been doing brisk business since the traditional holiday shopping season kicked off the day after Thanksgiving. Stores include DKNY, Nike, Polo, Reebok, Fossil and Kenneth Cole.
“That’s how the saying ‘Black Friday’ came about, because it’s the day that stores go into the black and start making money and profits,” said Maura Eggan, regional marketing director for the Gilroy Premium Outlets. “We’re very pleased with the business in Gilroy this year and traffic has been steady. It’s still too early to determine the whole season, but we’re optimistic.”
In addition to the numerous brand-name stores that sell everything from apparel and jewelry to home furnishings and specialty items, there are also be a few new stores to attract the shopping buff this holiday season and others on the way, including Movado.
“All stores do fairly well this time of year,” said Eggan. “But I think the jewelry and toy stores do best.”
Eggan said that the biggest problem at the outlets so far is parking.
“But that’s expected at Christmastime,” said Eggan.
Compounding the parking problem this Saturday from 1-4 p.m. will be a petting zoo with a nativity scene in front of the VF Factory Outlet. On Sunday, a caroling elf will wander throughout the mall from 1:30-3:30 p.m.
On Dec. 21 and 22, children will be able to have their pictures taken with Santa inside Erik’s Deli Cafe from 12-4 p.m. In addition to the appearance by Santa, the Gilroy High School choir will carol throughout the area from 1-3 p.m. on Dec. 22 and from 10-12 p.m. on the 24th.
Non-profits will offer gift-wrapping in front of Erik’s Deli Cafe and the Mikasa store. The service will available on Dec. 14, 15, 21, 22, and 24 by Marantha Christian Center and the Gavilan College Associated Student Body.
