Calling it a “calculated risk,” the City of Tracy is looking to spend $2.75 million to help bring a Macy’s department store to town in an effort to revitalize the suffering West Valley Mall.
On Thursday June 10th City Manager Leon Churchill said city employees will present the City Council with a plan on how the money will be spent on fixing up the anchor space of Tracy’s West Valley Mall, left empty by Gottschalks last year. The plan is to have Macy’s move in and open its doors sometime in October – in time for the holiday shopping season.
The voting will be held during a special meeting after the council’s regular meeting on Tuesday June 15th.
The Tracy Press Reports:
Churchill said the $2.75 million would come from the residential specific plan fund, money set aside years ago after a settlement with developers. The money — which amounts to developer impact fees and is not tax revenue — can’t be used for things like the fire or police departments, Churchill said. It can only be spent on one-time projects.
“Every so often, the city has to take some calculated risk if it wants to create a better end result. I think this is one of those opportunities,” he said.
…The declining state of the mall is one of the reasons the city manager gave for the city’s courting of Macy’s. He said having a high-end fashion store in the vacant Gottschalks property could have a lasting benefit for the entire mall, in addition to the city and its residents.
…According to city projections that Churchill called “conservative,” the $2.75 million investment should be repaid through sales tax receipts within 10 years of Macy’s opening its doors. He said that timeline could be accelerated, depending the store’s success — Tracy takes in via taxes about 1 percent of all sales, and the future Macy’s is “conservatively” supposed to generate between $15 million and $22 million annually.
That’s compared to Gottschalk’s best sales year of $11 million, Churchill said, adding that Macy’s worst sales years should be far better than Gottschalk’s best.
Churchill said partnering with General Growth and Macy’s is a chance for the city to make a statement and respond to numerous calls for increased economic development.
“I think the community has been asking for some action on the city’s part,” Churchill said, “and I get the impression that this is the sort of thing that’s been asked of the city.”