In Effort to Stimulate Growth, City Council Approves Tax Deal with Mall

By Nikki Garrett Metzger

(Victorville) – In one of the more explosive council meetings the city has seen in a while, the council approved a development agreement with Macerich Inc., owner and operator of the Mall of Victor Valley, to help stimulate growth and attract new tenants in an effort to maintain and grow the current level of sales tax the city receives from the mall.

The vote was 3-1 in favor of the agreement, with council member Angela Valles voting no and Mayor Ryan McEachron abstaining from the vote because he lives too close to the mall.

The agreement is a tax incentive for the developer, where they will get to keep a portion of the sales tax that is generated by the mall.  Assistant City Manager Keith Metzler explained that the tax incentive kicks in once $1 million in sales tax is generated. This level is what the City has been collecting over the past several years.

“The Mall has been critically important to our local economy over the years,” Metzler said. “We are at a crossroads because the mall has been an asset to the city and an asset to the region. Since 2006 we’ve seen a decline in sales tax, a drop of 39-40%.”

“Sales tax is the life blood that is largely relied upon to provide essential services such as police and fire.”

Metzler explained that the agreement with Macerich provides vesting rights, giving them certainty to continue with plans that have been already approved at the planning commission level. These plans include an expansion of the former Gottschalks building that will eventually become Macy’s and the development of the former Forever 21 to make room for jcpenney to expand into that location.

“The agreement that you have before you does a number of things, but what it doesn’t do is just give away the current level of funding that we have,” Metzler said. “We actually believe that this is a very one-sided agreement in the city’s favor. In fact, it puts the greatest amount of risk on the developer’s shoulders.”

Metzler said that this agreement will result in the completion of many of the projects that are currently underway, and it will provide incentives for the developers to bring in new tenants that they are in talks with now to provide new opportunities for the residents of Victorville.

Toward the end of the meetings there was heated discussion between council members that involved negotiations of some of the terms of this deal in closed session meetings. As a result, Councilman Jim Kennedy made a motion to disclose recordings and transcript of the closed session meetings, and the council approved it.

The recording and transcripts can be found at the city’s website

1 comment for “In Effort to Stimulate Growth, City Council Approves Tax Deal with Mall

  1. July 26, 2012 at 7:22 am

    We have seen malls in this county decline to nothing and this one was on a declining path. Macerich and Macy will put $40 million in improvements in, that will grow taxes in the future. Surrounding businesses will benefit as well. This was an easy policy decision for me.

Leave a Reply

Your email address will not be published. Required fields are marked *