Report: Target center could net city $1.5M each year

<p>A Target-anchored shopping center at the former Kenilworth Junior High site on East Washington Street could pump more than $1 million a year into Petaluma’s General Fund, a new report on the project’s fiscal impacts concludes.</p><!-- Nothing to do. The paragraph has already been output --><p>In addition, the redevelopment of the 39-acre site could add $472,000 a year in property taxes and create 720 permanent jobs, the study notes.</p><p>The report says the 377,000-square-foot project would have “a relatively significant positive impact on the city’s overall fiscal position,” thanks in large part to the additional sales tax, which represents 2.8 percent of the city’s yearly General Fund that pays for basic services.</p><p>The report, known as a Fiscal and Economic Impact Assessment, was required under a city policy adopted last year for large stores wishing to locate in Petaluma. The East Washington FEIA is the first to be released since the policy was adopted in October.</p><p>Project developer Regency Centers, which purchased the former school site in 2004, is proposing several large retail stores at East Washington Place, along with smaller shops, restaurant and some office space.</p><p>A Target store is the only known tenant, but the FEIA says potential sellers of electronics, sporting goods and home furnishings at the project could help recapture sales-tax “leakage” from Petaluma residents currently buying those products out of town.</p><p>Of the $119 million in annual sales projected for the shopping center, about $68 million would come in recaptured sales from residents who now spend that money in other cities, the report said.</p><p>Regency vice president Bruce Qualls said the report is “further evidence” of Petaluma’s need to plug retail holes.</p><p>Information from three previous economic studies on the project was used by Bay Area Economics, the city-hired consultant that prepared the FEIA, Qualls said. The company spent $90,000 on those studies and $30,000 on the FEIA, he said.</p><p>“All these studies keep finding the same result,” Qualls said.</p><p>The project would create 388 temporary construction jobs and 720 permanent jobs, of which 667 are in the retail sector. Slightly more than half of the new jobs would be full-time jobs, the report said.</p><p>The impact on existing retail stores in town could mean the loss of 75 jobs and $12.7 million in existing sales, the report said. The store most likely to be impacted by the project is the Kmart at the Plaza North shopping center, since both Target and Kmart sell similar “general merchandise” items.</p><p>However, even in competition with Target, the Petaluma Kmart’s sales would still be above the chain’s national average, so “this store would not necessarily face closure with a Target in operation in Petaluma,” the report said.</p><p>The FEIA is available on the city’s Web site at www.cityofpetaluma.net/cdd. A public hearing on the report is scheduled for the April 6 City Council meeting.</p><p>(Contact Corey Young at corey.young@arguscourier.com)</p>