LIVING
WAGE COALITION OF SONOMA COUNTYPhone: 707-623-7395
Email: livingwagesoco@gmail.com
PO Box 427
Santa Rosa, CA 95402
LIVING WAGE COALITION IN THE NEWS
Weigh The Benefits and Costs of Outlet Mall Expansion
October 29, 2003
Petaluma Argus-Courier
Guest Commentary
By EILEEN MORRIS
A decade ago when phase one of the Petaluma Village Premium Outlets was first
wending its way through the city approval process, the project looked like a
great idea. After all, the outlet malls in Gilroy were bringing in millions of
sales tax dollars -- covering anywhere from one-quarter to one-third of Gilroy's
costs for firefighter, police and administrative salaries. These salaries have
to be paid by a city's General Fund, and sales tax is one of the few sources of
General Fund Revenue around.
Hopes for the Petaluma project were so high that the City Council annexed the
property and, to entice the developers to choose Petaluma, agreed that Chelsea
Corporation, the outlet developer, would have to pay only $1 million toward the
construction of the Rainier freeway interchange and over-crossing.
If the Rainier project is ever built (the great "what-if" in Petaluma), the most
recent estimates put its costs at over $30 million. Several council members have
proposed scaled-down versions, but the fact remains: if any version is
eventually approved, the developers will have freeway access to their project at
a very cheap price.
The first phase of the Petaluma project did indeed result in a boost in sales
tax revenues for the city of Petaluma. The return hasn't been as great as
expected -- partly, no doubt, because there is not yet freeway access -- but it
hasn't been anything to sneeze at either. The primary rationale of the council
which approved the project was very clear. The city needed General Fund revenues
and this was a way to get it.
But now, the outlet developers are proposing phase two of the project, a 600,000
square-foot expansion. The Living Wage Coalition of Sonoma County thinks it's a
good idea to weigh the benefits and the costs of a project like this, and to
examine the ways in which a city can better predict and avoid similar costs in
the future.
The developers are not required to divulge the names of their prospective
tenants, but, according to Chelsea, the project could create anything from
200-some to almost 600 new jobs -- most in retail, some at a proposed movie
theater.
The vast majority of those new jobs will be filled by adults and will not pay a
living wage. How do we know that? Researchers from UC Berkeley examined the
impact of our proposed living wage ordinance. While doing so, they looked at the
employees and the pay scales at the existing outlet mall, and at a similar
development in the county, interviewing managers and employees at 27 firms. Most
of these employees are adults and the bread-winners for their households. An
hourly wage of $8.50 per hour, without benefits, is considered handsome in one
of these retail establishments.
But studies from the National Low Income Housing Coalition show that a single
person hoping to rent a studio apartment in Sonoma County needs to make about
$17 per hour in order to live comfortably.
It's no news to Sonoma County residents that wages have not kept pace with
prices, but nowhere is this more pronounced than in the rapidly growing service
sector, where entry level wages hover around $7 per hour.
Therefore, the new retail stores will result in the following: increased
reliance by outlet employees on public and private subsidies and assistance;
less family time for employees because they'll need to work more than one job in
order to survive; housing overcrowding; long commute times for employees who
will be forced to live far away from their jobs; and increased reliance on
emergency room services, the "primary care physician" for many of America's
uninsured.
The most grievous costs are to the dignity and health of the employees, who see
their hard labor with wages that will not support them, but taxpayers can expect
to shoulder hefty costs as well. A study by the South Bay Labor Council finds
that low wage employment costs the city of San Jose, the county, state and
federal government $500 for single adults, and $17,000 for adults with two
children per job annually. These "hidden subsidies" of low-wage employers
include food stamps, housing assistance programs, MediCal, and the local
emergency room.
Those costs -- or some of them, at least -- should be factored into the project
approval process -- especially when the city provides a developer with financial
inducements to build here rather than elsewhere -- inducements like bargain-rate
freeway access, for example.
Here, it has to be noted that most of the approval process for phase two of the
Petaluma outlets was defined over 10 years ago. It's unlikely that the city will
be able to distribute costs between itself and the developer in a radically
different way, but we can and should analyze the project and use the lessons we
learn in future review processes.
Petaluma, of course, is not alone in grappling with skyrocketing housing costs
and stagnating wages in the service sector. Other communities, and our own local
leaders, have proposed creative solutions to these problems.
These solutions include a jobs/housing linkage fee (now under consideration by
Sonoma County cities), living wage ordinances, and community impact reports, a
development review tool. Inspired by the environmental impact reports required
for some projects by the California Environmental Quality Act, the CIR studies a
host of impacts, including employment levels and wages, affordable housing needs
resulting from the proposed project, and necessary increases in city services.
We encourage everyone in the community to follow the outlet mall expansion
proposal carefully, to ask for explicit answers about the true costs of the
project, and to support the above proposals for future project approvals.
LIVING
WAGE COALITION OF SONOMA COUNTY
Phone: 707-623-7395
Email: livingwagesoco@gmail.com
PO Box 427
Santa Rosa, CA 95402