This week a new Best Buy opens at Marina Pacifica Mall, and ground-breaking is celebrated for a new Residence Inn down by the Queen Mary. How good is that? Not as good as it could–should–have been, and not as good as city officials are trying to make it seem. Not since the City Council voted to give away millions of dollars to the owners and developers of the projects.

Yes, millions: half of the sale tax revenue that is supposed to go into city coffers — up to $980,000—will be kicked back to the Best Buy chain while Rebates of $1.5 million in city bed taxes will go to the developers of the Residence Inn. Additionally, Long Beach has agreed to spend another $1 million in taxpayer money to upgrade streets, medians and landscaping around the new hotel.

The District reported these gifts of public money last summer when the City Council approved them in hurried votes at its June 19 meeting. The votes were not unanimous. Gerrie Schipske and Dee Andrews voted against the tax rebate on the Best Buy deal — “It has opened the invitation to any other major sales-tax generator to ask for the same deal,” Schipske explained on her blog — and Rae Gabelich called the hotel deal “an outrageous gift.”

However, most city officials continue to see the subsidization of the private sector as the normal course of doing business in Long Beach, although they like to call it something else — incentivization. “It’s unfortunate,” said Councilwoman Suja Lowenthal before voting for Councilman Gary DeLong’s motion authorizing the giveaways, “but we’re still at a point where certain retailers need to be incentivized.”

Still, indeed. Such corporate welfare was originally promoted as a short-term means of jump starting Long Beach’s new local tourist economy after the old manufacturing-based setup was ruined by the departure of the Navy in 1994 and the depletion of jobs at places like Boeing. But after hundreds of millions of dollars in public money has been poured into the redevelopment of economic districts on Pine Avenue, The Pike, Shoreline Village, Belmont Shore and Marina Pacifica, the expansion of the Convention Center and the creation of the Aquarium of the Pacific, these big gifts of taxpayer money have become a way of life.

And the practice is deceptive, making it next to impossible to tell how well the city’s economy is really doing—especially when city officials continue to talk up the so-called recovery while failing to mention its hidden costs.

“Opening up a Residence Inn is confirming that as a city, and as a tourist destination, we’re maturing,” Steve Goodling, president and CEO of the Long Beach Convention and Visitors Bureau, tells the Press-Telegram this week, echoing a familiar refrain.

Maybe so, but the Long Beach City Council shows little maturity by giving tax breaks to developers and big businesses on some of the city’s most-desirable properties–especially during an ongoing budget crisis that will put a mega-million-dollar bond measure on the November ballot to pay for city infrastructure. To the contrary, it shows that they really don’t believe in the city’s ballyhooed recovery at all.

Tags: Best Buy, Dee Andrews, gary delong, Gerrie Schipske, Long Beach City Council, Queen Mary, rae gabelich, Residence Inn, suja lowenthal, tax giveaways

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Juan 6 months ago 1 point
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Dave. I disagree with Suja's statement. The City of Long Beach, isn't at a point where it has to "incentivize" retail. Its at a point, where elected officials can't seem to set priorities outside of city government. Perhaps, this is why no city councilmember is willing to discuss the upcoming budget.

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Gunther 6 months ago 1 point
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City officials just don't get it. It's a simple lesson of economics that you could learn from any local crack dealer in the LBC. Your first hit might be free, but from there on out you're hooked and paying. City officials just likes to keep giving it out for free. Come on Long Beach, stand up for your self and sell your crack for full price like every other self respecting city seems to be able to do.

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Andy 6 months ago 1 point
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I liked the P-T's slam on Lakewood in this morning's paper.

"Lakewood faces fiscal challenges", the headline states. Notably, Lakewood, which doesn't give away tax incentives like Halloween candy, is able to attract substantial new business, however.

Here's a tip: EVERY city is currently facing fiscal challenges. Long Beach's best resources are its money spending populace and vibrant convention business. When you're pouring money into a redev agency that can't make an empty lot fast enough for the stucco-box developers and spending 125K to an agent for some corporate sponsorships of bridges and alleys, it's no wonder LB is behind the budget curve.

Here's a statistic: Pine Street between 3rd and 6th. 7 small businesses closed their doors last year. 0 have reopened. I don't think these two subsidies will help rebuild downtown business at all.

And west Broadway has three nice big empty lots on your way to the 710. Good job.

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LB Resident 6 months ago 1 point
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This is a symptom of a larger problem. Long Beach will never bring in the retailers downtown until it abandons the objective of affordable housing. We need to get our average income up. Continual pushes to add affordable housing downtown really hurt. The high end condos along Ocean are great, but we need to see some of that wealth north of third as well.

As for the Best Buy in Marina Pacifica, I agree it doesn't make sense. Seems like given the average income in that area we should be able to get Best Buy to pay full price.

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