After a long history of hostility toward big-box stores, the sprawling single-floor retailers ubiquitous in U.S. suburbs, Los Angeles is now starting to court them in hopes to build up the city's much-needed tax revenues.
Mayor Antonio Villaraigosa's office is to release a plan in the next few weeks that will focus on ways to lure giant retailers, especially big boxes, the Los Angeles Business Journal weekly reported Monday.
The reason behind the apparent turnaround is that other cities in the area are making off with much of the bounty of sales taxes that big-box stores create.
Villaraigosa has met with the chiefs of Home Depot and Costco warehouse stores for opening their outlets in some of the city's densely populated communities, the Journal said.
"L.A. has a very anemic situation in terms of sales taxes," said Robert Ovrom, deputy mayor of commercial and residential development. He said nearby cities are getting more sales taxes.
Los Angeles brought in 111 dollars in sales tax revenue per capita in the 2007 fiscal year that ended in June, while other cities in Los Angeles County brought in an average of 21 percent more, officials said.
If the city could raise its per capita sales tax revenue to the county average, it would generate 92 million dollars, almost enough to erase the city's current structural deficit of 95 million dollars.
But the problem is that Los Angeles has a long history of snubbing big box stores, which are generally defined as occupying at least thousands of square meters and sitting in the middle of area of asphalt.
Industry analysts said traffic was among a few reasons that big-box stores had been opposed by local activists and often well-organized neighborhoods in some Los Angeles communities.
The mayor's office is now turning the argument around in a way. It is saying that residents won't have to drive a long distance to shop if there's a big box in their neighborhood.
And there are job opportunities as well as sales taxes. Villaraigosa reported said in an email that "retail stores like Costco provide good paying jobs to Los Angeles residents and bring in waves of tax revenue."
Deputy Mayor Ovrom has been talking to neighborhood groups in the city's Pacoima district, where a Costco store is planned. He said so far local residents and groups have been generally supportive of the retail space.