Council weighs options for economic development

Rebecca Neipp

News Review Staff Writer

How to spend what could be the last-ever funding pot for economic development was weighed by the Ridgecrest City Council at its May 21 meeting.

In 2010 Ridgecrest was able to sell some $24 million in tax allocation bonds through the now-dissolved Ridgecrest Redevelopment Agency. With some $1.8 million still available from the $2 million marked for economic development, Economic Development Program Manager Gary Parsons presented a proposed list of broad spending categories before he brought back a list of recommendations.

His outline for the council allocated $1 million for industrial development, $500,000 for retail development, $250,000 for blight abatement and $55,000 for matching funds to put signs up to direct visitors to the downtown district.

Parsons said that industrial development is what brings employment opportunities to the area. It also creates revenue streams that fund services through development of income and sales tax.

He identified that category as having the most potential for return on investment, but noted that the five proposals before the city are looking for a total of $4.5 million.

“We have some really hard decisions to make,” said Parsons, adding that staff will provide the city with background and a value metric on each project. Among the criteria Parsons has created for each project is how many jobs each would create, how much sales tax it would generate, what property-tax improvements would be made and what other private investing sources would be involved.

Parsons also noted that the community has suffered hurdles in developing industry outside of the work at China Lake. “One of the reasons the base brought this work here is because we are isolated.” But having a low population base and being located a significant distance from other industrial centers is generally a deterrent to attracting other industry, he said.

This remoteness poses a challenge for the city because municipal services such as street repairs, public safety and quality of life are funded primarily through tax streams from which federal government work (such as that performed at China Lake) is exempt. A study presented early in the council meeting noted that although the median income in Ridgecrest is the highest for any city in Kern County, the taxes collected are immeasurably low.

The only way to offset that is by developing other kinds of compatible industry, which he suggested could include manufacturing or biofuel generation.

Mayor Pro Tem Chip Holloway said that one could make the case that since economic development funds all services, investing in that should be the city’s top priority.

“I know I’d have my head handed to me if we didn’t do streets, but I would like to see what those people say in 20 years when we didn’t spend money on economic development, and the streets are back to their original condition.”

Holloway also pointed out that the allocation for economic development had dwindled since the city first passed the bonds. Parsons said that the Super Walmart development ate into part of the money, but Holloway said the numbers still didn’t seem to add up.

“I think this number is wrong, and we might deny a project where we never have an opportunity again. These numbers need to be rock solid before we move forward.”

From the public microphone, Stan Rajtora said that four years ago the city collected some $10 million in property tax, and this year the city collected $2.3 million. “Have we really lost $7.7 million in property tax?”

He agreed that the city needed to focus on industrial development. “We’ve got a limited amount of money, and we’ve got this one chance to do something really worthwhile, to bring in some jobs to our community. My feeling is we are shorting the budget for the industrial. That’s where the leverage is.”

“I don’t think the council has anything more important, at all, than doing something about the economic development of Ridgecrest,” said Carol Vaughn. “I’ve sat here I don’t know how many years and watched us shrink.”

She said that the council needed to develop a longterm plan. “Not just words, but something implementable, with someone actually doing work on it. We owe that to our community.”

Skip Gorman said that the selection process seemed sterile, and he would rather see project advocates go head-to-head in promoting their individual proposals. He said that would give the council a glimpse of the “character, personality and leadership when you actually listen to a warm body.”

When the item returned to the council for a motion, Sanders recommend putting a small amount of funding in blight abatement, and putting the rest into industrial development. Holloway also voiced his support for focusing on industrial development, but emphasized the need for solid numbers. “I hope there’s no surprises. I feel like we’ve spent money two and three times with this list and haven’t even realized it.”

Although the council did not vote in a resolution, individuals gave what Parsons said was the direction he needed to come back with formal recommendations.

The item is expected to return to the June 4 meeting of the council.

Story First Published: 2014-05-28