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What do you want Compton: jobs or sales tax revenue?

ComptonCityHallx720_2Compton city council is back in session.  As the mayor and council return from their August break, residents are once again not happy with the contents of the regular city council meeting scheduled for September 6.  City Manager Jerome Groomes wants to hold a public hearing, September 13, to give a multi-billion dollar company a break on their sales tax for the next TEN YEARS.  This is VERY perplexing considering the mayor just ran a campaign to increase the city’s sales tax to fund city services.  The proposed location also signals a major tenant has presumably backed out their intended occupancy.

United Parcel Service aka UPS is pledging to invest $70 million in the city in exchange for a sales tax break, which would last for 10 years.

Related:  Compton Sheriff’s department justifies recent shooting

UPS is trading on the stock market at $109.50 per share and consistent annual revenues of $53 billion.

So, what do you want Compton:  job or sales tax revenue? 

Here is an excerpt from the Groomes’ staff report:

UPS is considering operating a package delivery center at the 59 acre “Brickyard” site, bounded by Sam Littleton Street to the north, Central Avenue to the east, Rosecrans Avenue to the south and McKinley Avenue to the west. The proposed incentive agreement would obligate UPS to:

(1) hire a minimum of 50 Compton residents as net new full time equivalent employees at its facility, and (2) invest a minimum of $70 million in capital expenditures in the City within five years from execution of the agreement.

In exchange, the City of Compton would pay UPS the equivalent of 30 percent of sales and/or use taxes that UPS reports from this proposed location and remits on transactions and purchases sourced to the City for up to a ten (10) year period. UPS would also be obligated to comply with the Brickyard Development Agreement local hiring requirements.

California Government Code Section 53083 requires notice and a hearing to be held prior to approval of an economic development subsidy.

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7 Responses so far.

  1. Michael Hill says:

    Then there’s this article indicating that Amazon is getting ready to replace UPS as their primary shipper of choice. Like I asked before, does anyone in city hall even read financials or Forbes? Apparently not. UPS is not the one they should have courted, but life if full of blown opportunities, isn’t it. Compton, typical missing the mark. Here it’s like, “fire, fire, fire, aim”, instead of the other way around. Lack of sophistication and bad reasoning avail us little in the long run. Sorry to see it this way, seriously. http://www.forbes.com/sites/greatspeculations/2015/12/29/will-ups-fedex-lose-out-to-amazon/#188ae9d82fbc

  2. Michael Hill says:

    Amazon would have been a better choice. Figures confirm it. Compton, getting it wrong again and again. Don’t they read the WSJ or Forbes? http://www.investors.com/news/technology/how-much-of-a-threat-is-amazon-to-shippers/

  3. Anonymous says:

    Here are points to consider
    1- invest a minimum of $70 million in capital expenditures in the City within five years from execution of the agreement.
    A)Describe in detail what type of capital expenditures are you going to invest in?
    B)Who gets to make the decision on what capital expenditures UPS gets to invest in
    C)Are the investments going to be made in an average yearly investment or will the investment be ear marked for specific projects
    2)the City of Compton would pay UPS the equivalent of 30 percent of sales and/or use taxes that UPS reports from this proposed location and remits on transactions and purchases sourced to the City for up to a ten (10) year period
    A)The money that the city has belongs to the citizens of the Compton not City Hall. The citizens should have a say so in this matter.
    B)Inform the citizens of Compton what 30% in sales tax for 10 years equates to in $$$$DOLLARS$$$…The residents of Compton are looking for transparency from the City Government
    3) pledging to invest $70 million in the city in exchange for a sales tax break, which would last for 10 years
    A)When you pledge to invest in exchange for a “break” you are merely stealing from Peter to Pay Paul…..
    In this case both Peter and Paul need their money

  4. Tomas Carlos says:

    This is the same brick yard that is being built by a general contractor that did not / is not following the structural plans. Also the jobaite has not followed the city charter on the city requirements to hire local work force.


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