Measure MM Initiative Supporters Dispute City Report

Reposted from The Independent (Livermore) website:

An analysis of Pleasanton Measure MM found differences in traffic and economic impacts between a citizen’s initiative and the proposed 40 acre Johnson Drive Economic Zone. Findings concluded that the initiative would have less traffic impact; it would have greater negative impact on existing retail.

The initiative, which if approved by voters in November, would limit individual retail uses to less than 50,000 square feet in the Johnson Drive Economic Zone area, located east of Johnson Drive and north of Stoneridge Drive.

Last December, Costco signed a letter of intent to acquire the 40-acre Johnson Drive site from Nearon Enterprises, which bought the property after Clorox moved its research center to a new corporate campus nearby. Once it was known that Costco was considering opening a store in Pleasanton, members of the public began attending council meetings, where they raised concerns about impacts of a Costco on local businesses and traffic. Eventually, they organized and launched an initiative drive, which was successful.

After placing the initiative on the ballot, the city council asked for an analysis of the impacts of the initiative on the city. Analyzed were such factors as fiscal impacts, economic impacts, traffic, and air quality.

The studies were conducted by ESA. They were paid for by Nearon Enterprises.

Citizens for Planned Growth, sponsors of the initiative, said they planned to hire a consultant to conduct a peer review of the study.

Christi Harris of ESA summarized the findings during last week’s Pleasanton City Council meeting.

The initiative would generate 1235 jobs compared to 678 for the zone, because general retail hires more employees than club retail, such as Costco. However, more employees would generate more demand for city services, such as water.

The initiative would generate less traffic. Both the initiative and zone would require similar improvements in traffic infrastructure. With no anchor store to generate funding, the initiative would be less likely to be able to finance the traffic improvements, said Harris.

Both the zone and initiative would exceed air quality standards.

The economic study found that the initiative would have somewhat greater impacts on existing retailers with the potential for existing businesses to lose sales and close. Harris explained that the report estimated that the initiative would divert $5.7 million of sales from local businesses, while the zone would divert $1.3 million at buildout.

Fiscal impacts were similar with the initiative generating $2.1 million a year by 2028 and the zone $2.5 million a year for the city’s general fund.

There were questions about whether the cost of traffic infrastructure was included in the studies.

City Manager Nelson Fialho set the estimated cost for improvements at $16 million. One-third would come from the developer; one-third from traffic impact fees accumulated by the city; and one-third would be paid from sales tax generated by Costco. Fialho explained that Costco would advance funds to the city and the city would pay back the money over time by returning sales tax over $700,000 a year to Costco.

Another concept would be for the city to borrow from its $270 million in reserves, then pay back the money overtime using Costco sales tax. Absent an anchor tenant such as Costco, another option would be to establish an improvement district that would issue bonds paid back by the tenants.

During the public hearing, Don Mayday, a resident, called the report an example of the city massaging assumptions, data and arguments that support the preconceived conclusions. He noted that the bottom line is that the initiative reduces traffic by over 2500 trips by day over the zone.

He disagreed that the initiative would have more negative impact on current retails than Costco, noting that Costco prices many commodities, such as gas, at or below what other retailers pay. “Small retailers cannot compete with Costco pricing strategies.” He added, “It’s not the city’s job to make a project feasible to a developer.”

Bill Wheeler, who heads Citizens for Planned Growth, stated, “It seems that some of the conclusions are debatable.” He noted that the purpose of the initiative is to allow voters to express their views about Costco or a new economic zone.

The council, consisting of Councilmembers Kathy Narum, Jerry Pentin, and Arne Olson voted to accept the report. Karla Brown was absent. The referred to it as a good report. Mayor Jerry Thorne was recused.

The study has been posted on the city’s website.