Compton 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.[adsenseyu2]
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.
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.