Comments on: 2nd Qtr: Sales Tax Drops $1 Million In 2 Years http://missionviejodispatch.com/budget/sales-tax-drops-662000-for-2nd-quarter/ The most complete news for America's premier planned community Tue, 07 Sep 2010 03:17:36 -0800 http://wordpress.org/?v=2.8.6 hourly 1 By: Allan Pilger http://missionviejodispatch.com/budget/sales-tax-drops-662000-for-2nd-quarter/comment-page-1/#comment-4491 Allan Pilger Mon, 21 Dec 2009 18:30:26 +0000 http://missionviejodispatch.com/?p=13447#comment-4491 A $1,374,000 sales tax shortfall in the first six months of 2009 confirms several trends that could get a lot worse for Mission Viejo. In reviewing the following, consider that the City of Mission Viejo has accelerated discretionary, non-essential spending: 1. Mission Viejo mall and import auto dealers showed the biggest decline, in tune with national trends of a consumer shift from high-end brand purchases to value purchasing. I recall that the #1 complaint in a Coto de Caza survey a couple years ago was that the nearest Wal-Mart was too far away. Yikes! Upscale Coto residents are prime targets for the mall and auto dealers. Meanwhile brand purchasing continues shifting to outlet centers. 2. The current holiday shopping season is not encouraging so far, so look for more than the usual number of post-holiday vacancies. 3. Mission Viejo's Redevelopment Agency subsidizes the mall and auto dealers, with the mall using the windfall to leverage against local mom and pop retail competitors, making small business even more vulnerable in a down economy. 4. Closing of big-box retail stores, even entire chains, may continue in 2010, as more companies will be unable to pay off debt from acquisitions and store openings during a decade of overbuilding. Commercial loan defaults are on the rise. The Freeway Center has highly noticeable big-box vacancies. A $1,374,000 sales tax shortfall in the first six months of 2009 confirms several trends that could get a lot worse for Mission Viejo. In reviewing the following, consider that the City of Mission Viejo has accelerated discretionary, non-essential spending:

1. Mission Viejo mall and import auto dealers showed the biggest decline, in tune with national trends of a consumer shift from high-end brand purchases to value purchasing. I recall that the #1 complaint in a Coto de Caza survey a couple years ago was that the nearest Wal-Mart was too far away. Yikes! Upscale Coto residents are prime targets for the mall and auto dealers. Meanwhile brand purchasing continues shifting to outlet centers.

2. The current holiday shopping season is not encouraging so far, so look for more than the usual number of post-holiday vacancies.

3. Mission Viejo’s Redevelopment Agency subsidizes the mall and auto dealers, with the mall using the windfall to leverage against local mom and pop retail competitors, making small business even more vulnerable in a down economy.

4. Closing of big-box retail stores, even entire chains, may continue in 2010, as more companies will be unable to pay off debt from acquisitions and store openings during a decade of overbuilding. Commercial loan defaults are on the rise. The Freeway Center has highly noticeable big-box vacancies.

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