Politics & Government
New Car Sales Are Capistrano's 'Niche'
Financial consultant urges San Juan Capistrano officials to continue growing its auto industry, which accounted for 27 percent of the city's economic base in 2010-11.
New-car sales contributed to the bulk of San Juan Capistrano's sales tax revenues in 2010-11, accounting for 27 percent of the city's economic base.
Indeed, auto dealerships and gas stations dominate a list of the city's top 25 sales tax generators and are the type of businesses that financial consultant Jerry Peeler is urging city officials to grow.
Meanwhile, it should diversify, encouraging other types of businesses that proportionately generate very little revenue for the city's coffers: business-to-business operations (solar, biotech, telecommunications), construction, food markets and restaurants, Perry said.
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"The thing that we’re saying here is that you’re very dependent on transportation categories," Peeler told the City Council on Tuesday night.
"You can attempt to attract other types of businesses to try to diversify the economic base. There's nothing wrong with what I call niches, and you have a niche here in new auto sales," he added.
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However, since the city's sales tax revenues peaked in the second quarter of 2006, transportation revenues have plummeted nearly 50 percent—$1.57 million from $3.52 million.
In the second quarter of 2011, the city collected $5.25 million in sales tax revenues, down from $7.6 million in the same quarter five years ago.
"If you have a solid core, even though this core of auto sales was really hurt in most recent recession, you can continue to attract, and try to attract, additional car dealers," Peeler said.
Peeler advised the council to consider easing sign regulations for dealerships.
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"I can see where we want to make sure we give our auto dealerships as much help as we can, but I'm not sure it's really smart of us to get even more heavily weighted in that area," countered Councilman Larry Kramer.
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Mayor Sam Allevato said he expects a loss of about $300,000 in sales tax revenue when three gas stations and at least two fast-food joints close to make way for construction of the .
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2010-11 TOP 25 SALES TAX GENERATORS
Audi/Bentley Leasing Pacific Sales California Color PetSmart Capistrano Ford Ralphs Capistrano Toyota Scion Rite Aid Capistrano Volkswagen Ross Dress for Less Chevron Shell Chevron Staples Office Superstore Costco Wholesale Tuttle-Click Capistrano Ford D.M. Color Express Vons HD Construction Supply Weseloh Honda Hirsh Pipe & Supply Weseloh Kia Main Street Materials Weseloh Nissan Marshall'sGet more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.