2024. 07.22 Speaker Cards-PC - Laserfiche WebLink

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A decision this November on a business license tax increase that goes too far may get you an infusion of new tax revenue in the short term but is it worth the risk that in five or so years your structural deficit is worse because your tax structure drove business and investment away. This represents a significant and avoidable risk, and we advise against this all or nothing approach. And specific to the City of Redwood City having an ongoing glut of empty office space and becoming a place too expensive to operate a medium or large business, we caution about these very real consequences: • Your post-COVID vacancy rates will only get larger – driving your sale tax down more; • Projects under construction like Broadway Plaza, South Main, and 240 Twin Dolphin Drive will continue to struggle to find new tenants; • Approved projects like Harbor View Place and 1 Twin Dolphin Drive may further delay construction; • Your mixed-use Gatekeeper projects and any other existing projects currently seeking development agreements may never get built – and even if you don’t care about losing office, you should care about losing the associated hundreds of affordable housing units and other community benefits like childcare, teen centers, etc. Economic development broadly defined is about business retention and business attraction. It is about paying attention to those companies and industries that cluster on the Peninsula. Think life sciences in South San Francisco, Foster City, Redwood City and now expanding to Brisbane, Belmont, San Carlos. Think about tech in Redwood Shores, Burlingame, Menlo Park and San Mateo. Also consider the industrial businesses at the Port of Redwood City and in South San Francisco. All these varied business sectors allow for buffers to both downturns and inevitable churns whereby industry either grows, expands, stagnates and/or dies. Focusing on business retention means having respect for what business already provides to Redwood City and engaging with your business community separate and apart from times of crisis. It means being willing and open to understanding the complexities of different industries and what their challenges are and how a City can partner with business so that a business wants to stay, grow, hire, partner and become part of the fabric. DES, BKF Engineers, W.L. Butler Construction and the Chan Zuckerberg Initiative (CZI) are examples in Redwood City. SAMCEDA encourages the City Council to reject the recommendation of $250 per employee in the Professional Services category and a $500,000 cap on total tax payments. Instead, you should reduce these amounts, raise the TOT tax to 15% in 2026 which could net an additional $1,250,000 in new tax revenue, seek voter approval of an infrastructure bond in 2026 or 2028, focus on getting new development approved and constructed, and double down on economic development strategies to create additional new tax revenue. And this can all be accomplished without laying off any of the City’s workforce. Thank you for your consideration. Sincerely, Rosanne Foust President & CEO, SAMCEDA