SB Newsroom - News Analysis: Backers See Goleta Windfall in Business Park

Santa Barbara Newsroom
By Tom Schultz
May 4, 2007

When it gave the nod this week to the largest business park in Santa Barbara County, the Goleta City Council looked to the bottom line.

Backers of the plan say Goleta and the region can anticipate an enticing financial bonanza from expansion of the Cabrillo Business Park, a proposal years in the making.

The city stands to reap millions in tax revenue and fees while the project generates more than half a billion dollars in new worker wages during its initial 10-year buildout, according to developers.

In conjunction with this windfall, supporters say the project will be a boon for tech entrepreneurs. It will work in synergy with ventures emerging from UCSB, they say, providing new incubator space for start-ups and other companies otherwise restricted by tight 3 to 5 percent research and development property occupancy rates.

Indeed, the new park may prove to be a potential economic mecca. But what the Hollister Avenue project will not do is bring new housing — something detractors bemoaned Monday night when the council, acting as the city Planning Agency, decided 4-1 to approve the project. Councilwoman Jonny Wallis was the lone holdout, and a final council vote was scheduled for this coming Monday.

"I will probably be in a retirement home. But in 10 years you are going to have a huge tax increment that is going to be able to fund other things in the community, and that is the ultimate benefit," Councilman Roger Aceves said.

"Companies will grow too big and we will never have the room to accomodate them," Councilman Michael Bennett said. "This will at least give us the opportunity to capture that initial phase while companies are developing."

Financial estimates peg its overall economic stimulus at more than $2 billion during the project's first decade, or roughly 5 percent of Santa Barbara County output. This surge would include sales tax revenues of $48 milllion, property taxes of $8 million and fees paid to the city to the tune of $10 million.

Goleta operates on a more than $14.3 million budget, with about $14.7 million in revenues. Half its sales, property and other tax income goes to Santa Barbara County under a revenue-sharing agreement, though its retail sales tax contribution to the county will fall from 50 percent to 20 percent by the time the business park is complete.

Local earnings generated by the park could hit more than $520 milllion during its first 10 years, according to the developer, Sares-Regis Group.

"This is a gateway project for the city of Goleta," Russell Goodman, group regional president, told the council. "As appropriate for a gateway project we, will be bringing a tremdous stimulation to the Goleta's economy.

"Obviously, going forward after full buildout, the economic benefits will be at an even higher level," he said. "This gateway project will be good for the city, the public, the business community, UCSB and their creation of world class technology and processes."

Not everyone agrees the park is a good idea.

Critics worry about negative effects to traffic circulation, long-term water availability and, among other concerns, a strain on housing supplies.

Where is there housing for janitors, food service workers, or technology maintencance staff members who will work at the park, Goleta resident Katthy Gephardt wondered aloud. "There's certainly no benefit to my neighbors or my families."

Councilwoman Jonny Wallis said job creation at the site would outpace Goleta housing construction as currently envisioned.

"This is a project that has many benefits," she said, applauding the developers on efforts to make it consistent with city policies, and with few environmental impacts.

Still, she said, "There's an elephant in the room and it's the jobs-housing balance."

"The council needs to say where we're going to get the housing, how we are going to go about it and where it might be," Wallis said. "That needs to happen before the project is approved."

Anticipating a dozen buildings spread across 92 acres in the heart of Goleta, plans call for nine phases of construction to last at least 10 years if not more.

The park at 6767 Hollister Ave. would more than double in size from its current incarnation — to nearly a million total square feet.

The park would bring more than 1,400 new jobs the region, according to Sares-Regis.

The property in question was formerly owned by Delco, an anchor for research and development within the defense industry during the Cold War era. In 1975, the company employed about 2,200 workers. Now, the businesses on the property -- many of them also in the defense industry -- employ just 975.

After all nine phases of the project are complete, Goodman said the business park will employ about 2,300 total workers -- the same level as the 1970s.

Planning began eight years ago, when Goleta was an unincorporated area still under the governance of Santa Barbara County.

In addition to the nearly one million feet of square footage, the developer is proposing to set aside a large chunk of the property to wetland restoration, and to construct a community park and pedestrian walkway leading to Kmart nearby. The city will also net a 4,000 square-foot storage facility for its Community Development Department.

The property currently harbors two storage areas and nine buildings used for research and development, office, manufacturing and industrial activities. The project would retain seven buildings, remove two, and build 12 new structures.

While critics fretted, backers of the park carried the day.

"We are unambiguously supportive," said Joe Armendariz, executive director of the Santa Barbara Industrial Association, a countywide organization. "This is exactly the type of economic investment into the infrastructure that will allow the high-tech sector to expand."

The county lost 1,600 high paying jobs in the last decade, he said.

"These are head-of-household jobs," Mr. Armendariz said. "These are the kind of jobs that allow people to afford to live here."

Taxes to be generated by the project are "essential for the delivery of programs and services, whether it be public saftey, public health, recreational programs," he said, adding the more than half a billion earned by employees who work on site in the project's first 10 years would generate even more tax revenue through a multiplier effect.