City’s downtown, Solano Square thriving

Benicia gets its sales tax results after a two-quarter lag, but if those results come in as expected, the city’s 2013 results may be its highest-grossing year, Economic Development Manager Mario Giuliani told the City Council on Tuesday.

Giuliani opened his talk with an April Fool’s joke, threatening to take 90 minutes to explain the city’s economic outlook and asking the Council members to hold questions until “the intermission.”

But instead, he swiftly described how Benicia’s tax receipts are getting healthier in the city’s downtown area and the nearby shopping center, Solano Square — though things aren’t doing as well at another shopping center and the city’s Industrial Park.

Benicia’s downtown receipts come primarily from restaurants and bars, which produced $36,707 in tax receipts during the second quarter. In the same period, downtown retailers in the area contributed $16,067, Giuliani said.

However, a restaurant, Kimono, that had expected to move into a vacant area of Harbor Walk instead will be opening in the building formerly occupied by Pappas Restaurant, he said.

That’s because the Harbor Walk Association and the vacant first floor’s owners are disputing whether that part of the building can return to retail use, he said.

Giuliani said none of the paperwork has changed, but the Harbor Walk Association’s paperwork “is at loggerheads” with other documentation, and the two parties will have to “hammer out” their differences before the building gets a new tenant.

Councilmember Christina Strawbridge, who lives at Harbor Walk, suggested one of the reasons for the disagreement is turnover in the association and new interpretations of the agreements. “It’s a conflict,” she conceded. When she moved in, she said, “we were told there would be a restaurant under us.”

However, she said she was glad to see the former Pappas property, at East Second Street as motorists turn toward the city from Interstate 780, gain a tenant.

Solano Square, the shopping area to the north of the downtown area, not only has been producing an increasing amount of sales tax every year, its results were strong even during the recession, Giuliani said.

But when he showed the Council the charts that marked Southampton Shopping Center’s sales tax, he said, “Something looks amiss.”

In contrast to Solano Square, Southampton’s receipts for 2013 were tracking to be the second-lowest results in recent years.

He said merchants have been meeting regularly with Benicia Chamber of Commerce staff in hopes of improving traffic to the shopping center, which has experienced vacancies and has filled some storefronts with tenants less likely to produce strong sales tax.

However, it also has two new restaurants, Huckleberry’s and Panda Express, which Giuliani said his office hopes will improve tax receipts in the future.

Meanwhile, Benicia Industrial Park, a major economic driver for the city, is experiencing a flattening of its sales tax revenues, Giuliani said. At one time it produced $1 million a quarter, a figure that declined to $877,018 last year.

Ironically, the park has had up to 20-percent vacancy, but that has dropped to its current rate of 10 percent. However, some of those new tenants aren’t sales tax-producing companies, Giuliani said.

Nor is the petrochemical industry the top sales tax producer, accounting for only 8 percent of Industrial Park receipts, he said. Heavy and light industries produce 78 percent of the tax receipts, and contractors contribute another 11 percent.

The city’s industrial area, which at one time was an Army military arsenal, may get a boost from Carter’s Biz Café, owned by Carter Rankin, who wants to use the Commanding Officer’s Quarters as a place where home-based business owners can use its offices and meeting spaces.

In addition, the city is still trying to meet its goal of a gigabit of broadband capacity to every business in the Industrial Park, Giuliani said. Benicia has committed $750,000 toward the $3 million to $4 million project, and has sought company proposals, receiving three.

AT&T has been adding fiber equipment to Industrial Park businesses, Giuliani said, and city staff has seen “more AT&T activity in four months than in the past four years.”

But while that’s an improvement — “a good thing,” he observed — it isn’t close to meeting the city’s goal.

“We don’t want just to have capacity,” Giuliani said. “We want to be more competitive,” especially against East Bay and other nearby industrial parks. He said the city’s consultant is expected to give the Council a report on the matter in about a month.

In other matters, Giuliani said companies participating in the Business Resource Incentive Program, which analyzes operations and offers financial incentives and low-rate or no-cost loans to cut costs and power consumption as well as reduce waste production, have been able to sequester 438 metric tons of greenhouse gas emissions.

Elizabeth d’Huart, executive director of the Benicia Historical Museum, also spoke Tuesday, saying agents showing properties to a prospective tenant or buyer only need to show a letter she provides and leave their business card for free admission to the museum, so clients can learn more about the city’s past.

In other economic developments, the former Nationwide sign has been removed from city property near Interstate 680 will be replaced by a digital sign being built by CBS Outdoor starting in a few weeks.

Clear Channel also will turn two billboards into digital types that also are on city property near that highway.

Strawbridge said she wanted more feedback about Benicia Main Street and said she’s still disappointed that some of the city’s entryways have vacant buildings. She also expressed hope that service businesses along First Street would be encouraged to offer some items for retail sales.

But she was happy with another part of Giuliani’s report that indicated news articles encouraged by the city’s tourism consultant, Jack Wolf, and published in the Sacramento Bee and picked up by the Miami Herald, was the equivalent of $84,000 of advertising.

That’s significantly more than the city’s tourism budget of $50,000, Giuliani noted.

“That’s really amazing,” said Strawbridge, a former chairperson of the Economic Development Board and a long-time tourism advocate before being elected to the Council.

Councilmember Mark Hughes praised the city’s economic development efforts, saying, “It’s only going to get better.”