Shakedown or Business as Usual? Pappas Seeks Millions From Elk Grove Taxpayers to Develop Costco
After several weeks of whispers and parlor talk, last week residents learned the rumors that the developer of the new Costco approved for Elk Grove would seek an incentive had come true.
As posted last week by the Elk Grove City Clerk's office, the developer of the new Costco located near Elk Grove Boulevard and Bruceville Road, The Ridge EG East, LP, is seeking a 25-year $8 million sales tax sharing incentive.
According to the documents associated with the request, "The agreement would provide for sales tax sharing between the City and the landlord/property owner in a present value amount of not more than $8,000,000, as escalated and adjusted over time, all as provided in the agreement. Payment would be made for up to 25 years, or until the entire economic development incentive amount of $8,000,000, as provided in the agreement, is paid, whichever occurs first."
Aside from the information posted last week, there are unanswered questions regarding the matter such as who requested the placement of the item on the public hearing portion on the City Council agenda? Was it a city staff members who placed it at the request of Pappas Investments, developer of the Costco, or perhaps a City Council Member?
Pappas Investments already has a successful track record extracting economic incentives from the City of Elk Grove. In the City's 2012 effort to recruit California Correctional Health Care Services to relocate to Elk Grove, a $1.4 million incentive was awarded to Pappas Investments as part of a larger $3.3 million package.
The bigger question is how the City Council will react to this request, particularly given the acrimony expressed by nearby residents regarding the effects the big box store will have on their neighborhood and the already heavily traveled Elk Grove Boulevard. Given the comments these residents heard from former Mayor Gary Davis telling them "tough luck" when expressing their concerns, will they feel as if awarding a multi-million dollar incentive is rubbing salt in the wound?
Moreover, more importantly, given that Pappas Investments has generously donated significant amounts of campaign cash to Mayor Steve Ly, Vice Mayor Steve Detrick, and Council Members Pat Hume and Darren Suen, will this affect their decision? Also, given Ly's indecisiveness on almost every tough decision brought to the council, how will he try to wiggle through what could be very controversial public comments.
These questions should be answered next week at what could be an interesting meeting.