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City of Alameda Ratifies Retail Ordinance

At last night’s City Council meeting, Council approved and ordinance amending various sections of the Alameda Municipal Code to implement regulatory controls pertaining to big-box or large format stores.

This makes a tremendous amount of sense. A study by the Public Policy Institute showed that “top performing” sales tax cities in the Bay area are located along major highways – “The accessibility advantages of the freeway can help make an area ripe for modern auto-oriented retail.” Alameda is not, of course, nor are any of the potential big-box store location in Alameda, located along major freeways.

Further, the study found that attempts by cites that are underperforming in terms of sales tax revenue rarely succeed in stealing sales tax revenue from other cities. The City of Alameda would desparately like to catch-up to Emeryville in terms of per-capita sales tax, but the Public Policy Institute suggests that this never happens – the metropolitan hierarchy of per-capita sales tax revenue has not been shown to change, because retailers tend to look for the same things everywhere they go when locating a store, namely, a “freeway-oriented suburban parcel.”

In any event, given that the portion of the sales tax that is returned to California cities is only 1%, a complete capture of the alleged $41 million in Alameda retail leakage would amount to only $410,000 per year – roughly enough to cover one fourth of the annual retail sales tax we will lose as the auto dealers vacate Park Street.

It’s time for City Council to start looking into co-operative sales tax agreements with neighboring communities, as provided for in Proposition 11. It’s also time for the City of Alameda to switch the focus for Alameda Point from building housing to drawing businesses that produce business-to-business sales tax revenue, and create higher paying, not just retail, jobs.

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