Economic Development Director Glosses Reality; Pitching Sales Tax Increase, Errand Boy For Elk Grove City Council?

Is Darrell Doan,  Elk Grove's economic development director nothing more
 "an errand boy sent by the grocery clerks to collect a bill."  |  

March 29, 2018 |  

In a video produced for Mayor Steve Ly's March 23, 2018, State of the City Address, several members of the city's executive staff spoke glowingly of projects undertaken in Elk Grove.

One of the presenters was the city's economic development director, Darrell Doan. In his portion of the video, Doan made several claims, while not inaccurate, are nonetheless incomplete.

Among the city projects covered in his portion of the video (see below), Doan glossed over the new Costco store and pre-funding of public facilities for the Southeast Policy Area. Additionally, Doan made a not-so-subtle pitch for the city council's long-sought sales tax hike.

Southeast Policy Area

In his presentation, Doan waxed poetically about the development of infrastructure in the city's Southeast Policy Area (SEPA) noting "we're building roads, water lines, power lines." He said this is being done primarily in the SEPA portion of the city, which he characterized as an employment center.

Comments on the SEPA do not paint an entirely throrough picture though. Here Doan says "whereas other cities sit back and wait for developers to come in and build infrastructure, we're grabbing that bull by the horn, so to speak, and we are putting in infrastructure in front of the development."

Doan's statement is correct, but it omits crucial information. First, it is true most cities wait until developers to come in and build infrastructure, and for good reason. By Elk Grove building the infrastructure with taxpayers monies, they are doing two things - they are fronting the cost for developers, and playing a dangerous game of land speculation - something that should not be undertaken by the public sector.

Elk Grove is speculating, some would say gambling, with taxpayers money that once they build this infrastructure the jobs center developers will come and pay the city back for the improvements. But what happens if it takes 20-years or more for the job center development to come to fruition?

Put another way, the City of Elk Grove has socialized the risk on the shoulders of taxpayers but will be privatizing the profits for developers. Could not this highly speculative maneuver with taxpayer money be better used for the benefits of residents by doing things like addressing the multi-million dollar road maintenance deficit?

As for the job center aspect of the SEPA - let's not forget former Elk Grove Mayor Gary Davis' promise of 25,000 jobs on the 300-acre jobs center portion of the 1,200-acre special planning area. How many of those jobs have materialized to date?


Furthermore, the first development in the SEPA was not surprisingly yet another housing subdivision. For all the talk about an employment center, and Davis' 25,000 jobs, the SEPA project is just another housing development.

The only difference is that the city council is giving housing developers, not employers, a big-fat interest-free loan on infrastructure to build more rooftops.


Undoubtedly the new Costco to be located on the southeast corner of Bruceville Road and Elk Grove Boulevard will be another shopping choice for residents. The way Doan describes the entry of the retailer into the city though, you would think it was like the highly sought-after Cabela's was opening a branch in The Grove.

"Having a brand like Costco in our city sends a signal to the rest our market, and the rest of the retailers, that Elk Grove is a place that they need to be," Doan said.

While admittedly Costco has excellent deals on six-packs of organic Romaine lettuce, is having a Costco in Elk Grove really sending a signal? After all with close to 800 stores, Costco is by some measures the worlds second largest retailer, only behind Walmart, and with no disrespect to our neighbor to the south, Lodi, California,  with less impressive demographics than Elk Grove has hosted a Costco store since 2011.   

Lodi, California's Costo store, like several others in the region,
is located by a major highway. 
Beyond Doan's Costco hyperbole, he avoids talk of the dirty truth about the new Costco store in Elk Grove - taxpayers, more specifically the Elk Grove City Council, gave its developer, Louie Pappas, a multi-year incentive worth over $8 million. Even though they will deny it swayed their vote on the incentive, but four of the five current Elk Grove City Council members have accepted campaign contributions from Pappas over the course of several years.

(Say what you will about Lodi, at least their city had the wisdom to locate that store near Highway 99, not in the middle of a densely populated residential area as is the case in Elk Grove).

Sales Tax Revenues

Following his talk about the significance of the Costco store, Doan segways into a discussion of the mothers' milk of California municipal financing - sales tax revenues.

After omitting the fact that taxpayers are giving multi-millionaire Louie Pappas an $8 million payoff, Doan transitions to a discussion about the importance of this revenue source. Interestingly, over the last several months Doan has dropped all talk about recruiting high-paying employers to Elk Grove and has, to use the parlance of former Mayor Gary Davis, been laser-focused on retail recruitment, but that is an entirely different topic.

"Costco is going to bring in sales tax dollars, and that is important because sales tax is the lifeblood of the city's budget, we use them to hire the cops, we do all the things that resident expect of government," he said. "We need sales tax dollars to do that."

The comments about sales tax dollars are not being made in a vacuum. For the last three years, the Elk Grove City Council has been champing at the bit for the opportunity to place a sales tax increase to jack-up revenues on the ballot, and this video production was but one vessel the city will use to push their tax and spend agenda.

Final thoughts

We would be remiss if we did not remind readers that Doan, though he is failing in his duties to bring those 25,000 high-paying jobs to The Grove and doesn't have a lot to work with, is just an employee. As such, his directions as an employee comes from his bosses - city manager Laura Gill and Mayor Steve Ly, and his council members Steve Detrick, Pat Hume, Stephanie Nguyen, and Darren Suen.

When you hear Doan talk about how great the Costco is for Elk Grove, the importance of sales tax revenues, and taxpayers subsidies for SEPA infrastructure, keep in mind he is nothing more than a highly-paid "errand boy sent by the grocery clerks to collect the bill," or in this case, provide political cover.

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D.J. Blutarsky said...

I noticed his underling was also featured on the propaganda video too--and her title was Economic Development Manager. So let me see, we got Doan as Director, directing a second person who is a Manager, who is managing maybe one other person in the department. Quite a bloated top-heavy (and expensive) fiefdom they got running there!

What started out as a lofty goal to be the new Silicon Valley has now ended up describing Costco as "sending a message" and touting the jobs as good livable wages. Even if both couples worked at Costco, try going down to the bank and getting a loan for a house in The Grove on that one!

Lowered expectations will make anyone look good!

Capt. Benjamin Willard said...

Speakings of jobs, why in the city's video was there no mention of the Wilton Rancheria's gambling hall and bingo parlor on the site of the Elk Grove Promenade? If memory serves me correctly, everyone from Mr. Wood at Region Business to Wilton Rancheria Chairman Mr. Raymond Hitchcock to Mayor Ly ballyhooed the 2,000+ jobs supposedly coming to town. It would have been appropriate for city leaders to update that development given its future implications for the community.

Josie said...

I might also add that this bloated top-heavy(and expensive)fiefdom has also hired a Specialist plus a contract with an Alabama firm to bring in higher end retail. Appears to me this Department needs some heavy duty oversight.

At what point does the City require the Director, Mr. Doan, to use a local cell phone number on the cities web site instead of one in Baltimore, MD? That would seem to be confusing when making inquires for doing business in Elk Grove, but calling a number in Baltimore, MD.

Connie said...

I call BS!

This is why the residents of Elk Grove need websites like Elk Grove News a la Paul Harvey. Those of us who pay attention are insulted by videos like this with comments that try to fool unsuspecting residents as if Elk Grove is another giant arcological dome.

If the Elk Grove City Council and staff want to paint Elk Grove as a version of The Truman Show and such a nirvana city, why the need for a $40 million bond and the push for a sales tax increase?

Here is my opinion: Darrell Doan, wearing his perennial rosy colored glasses, is trying to pull the wool over the taxpayers’ eyes by painting a picture of the Costco deal is better than it really is. Doan forget to mention the millions in incentives the developer demanded in order for the Costco to be built on their land. It is very unfortunate that Doan cannot speak the entire truth, opting instead to tell lies of omission which are just as damaging as an outright untruth.

The people are owed the entire truth, no matter what; and note to everyone over on Laguna Palms Way, we can handle the truth!

D.J. Blutarsky said...

Wikipedia: "Drinking the Kool-Aid" is an expression commonly used in the United States that refers to any person or group who goes along with a doomed or dangerous idea because of peer pressure. The phrase often carries a negative connotation when applied to an individual or group. It can also be used ironically or humorously to refer to accepting an idea or changing a preference due to popularity, peer pressure, or persuasion. In recent years it has evolved further to mean extreme dedication to a cause or purpose, so extreme that one would "Drink the Kool-Aid" and die for the cause.

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