Is Outlet Mall Worth the Price?

Love it or hate it, the one thing that seemed evident from the crush of customers storming the new outlet mall was Livermore must be ringing up a lot of cash for the city coffers.

Cha-ching turned to cha-what after talking to Mayor John Marchand and Assistant City Manager Troy Brown on Monday.

They told me the outlet mall is expected to produce approximately $2 million in projected annual sales tax revenue, although that’s all just guesswork until the actual money hits the bank sometime after the first fiscal quarter.

My heart fluttered. I started thinking about all the things that money could buy — reopening the Springtown library, bringing in more services, chipping in for Fourth of July fireworks. The list was just beginning, and I was growing more forgiving of the traffic tie-ups that have largely been contained to just the exit lane on the freeway.

But then I learned that half the money would be going back to the developers. I don’t claim to know all the ins and outs of financing such projects, or if this is standard procedure. All I know is the money given is to be used for funding “public improvements,’’ and Brown says the developer is only being reimbursed a portion of those costs.

The total eligible amount for reimbursement is about $15 million, so if they collect a million a year, this would continue for about 15 years before the city gets the entire tax.

But if, for example, in one year the sales tax was only $1.5 million, the city would still collect their $1 million, but the developer would only get $500,000. That would prolong the time before the $15 million cap would be reached.

Let’s make this clear: The first million goes to the City of Livermore, the second million goes to the developers. Anything less than $2 million is taken out of the developer’s share. Anything more than $2 million goes back to the city.

So for our purposes, we’ll just move on to Livermore’s projected income, which has now been chopped to $1 million — still a sizable amount.

We can still get a lot of bang with a million bucks. Except it isn’t a million going into the general fund.

Out of that money, the city needs to put about $600,000 out for maintenance and city services for the mall, according to Brown and Marchand. The city had already brought on four new police officers, with three more coming on July 1, 2013, all because of the mall and the reinstated gang and drug task force.

(As a side note, I think the officers are better suited to patrolling the parking areas where break-ins have been occurring than directing traffic — a task any civilian who has worked the Alameda County fair could perform. I’ve seen zero police presence in the pitch-black overflow parking areas, and quite a few manning the intersections that could probably flow just as well using the traffic lights.)

But back to the bottom line.

“At the end of the day, the city will get about $400,000,” says Brown of the projected funds. “That money isn’t earmarked for anything right now and will go into the general fund.”

So it boils down to this: Is the $400,000 worth the I-580 traffic jams to Livermore residents?

Perhaps. It does bring some money into our city directly, and there’s hope the mall will raise Livermore's profile — which it has already accomplished. More importantly to city officials is the belief the mall will have a halo effect by creating interest in outlet shoppers to come to downtown Livermore to shop, eat and even venture out to the wineries.

Personally, I don’t think that’s actually going to happen — at least not until there’s some nice hotels to accommodate vacationers who would include a trip to the outlets as part of their plans.

I’m not really into retail therapy, but when I’ve gone to other outlet malls for a day trip I’m like most bargain shoppers who have their eye on the prize — saving money, then getting the heck out.