Minutes 05/02/1989 - Laserfiche WebLink

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Ma~v 2, 1989 Sales Tax The reduction of sales tax revenue continues to disturb me. Portsmouth people simply are not shopping in Portsmouth for whatever reasons. Restaurant and Lodging Taxes are up, because of new eating establishments and our promotion of small conferences and tourism; however, retail sales are off. Today with mass transit systems and improved highways, the reg.ion of Hampton conforms more to the definition of a city than any on~? city. As transportation systems are improved in the fut-ure, we wll become even more of a community of interest -- economical, social, and political. A regional tax allowing al! munfcfp~l~tie~' to share the wealth i~ definitely in order. A review of the 198.8 Vital Statistics' of"Son~th-.Ha~m, pton Roads Virg~n,la. published by the Virg'i'hian~-Pilot/Ledger-~Star, indicates that .us much as 50% of Portsmouth's residents sl~'~p at Military Circ%e,__4~%' at Greenbrier Mali, 29% at LynnhaVen Mall, 28% at Best Square, 25% at Janaf, 17% at Pembroke Mall-an'd.~l~6% at W. aterside. Obviously, we do not, c01ieet any sal~s ta~es in virg~n~la Beach, ChesaPeake or Norfolk.~ su6h figures certainly'justify City council's efforts to expand and promote new. comme'rcial shopping areas in our city and re-vitalize existing ones. Because sales tax receipts continue to be very erratic in amount, I have based the revenue estimate on an annual rate 0f growth in sales of 4%. The estimate of $5,600,000 is higher than the present rate of sales tax growth, but substantially below the State estimate of $6~038,941. Although we have had and cohtinue to have strong economic development activities, housing starts have been slow in Portsmouth as well as the entire Metropolitan area. In the area the number of new single family housing starts d~c.reased from 17,545 new starts in 1987 to 16,851 new starts in 19'88, a reduction of 4%. In this respect, Portsmouth mi-~ore'd the region as the .over built housing market settled into-a year Of absorption. Doubts about interest rates and general economic conditions have put a damper on speculative housing s.tar~$. As such, ~ven though I expect growth, next year it will predominantly in housing, but in industrial and con~ir, ci~ development. As it relates to commercial/ir~dus~rial expansion, 1988 ~was a very good year with almost $24 million in taxable- building permits and nearly $40 million in taxable investment. Some highlights include:' o Urban Enterprise Zone~Building Permits totaled $8.8 million, third highest yearly total. Investment in the Zone has averag~ $10.5 million per year during 1984-1988 (years in which the program has been in effect~ compared to $1.9 million per year during the preceding five years (1979-19.83]. o PortCentre Commerce Park development kicked off with two major projects -- WAVY-TV, which is preparing for its debut, and Portsmouth Business Centre, which is under construction and ha~ an a~chor tenant ~or more than 25% of the project. o New retail development continued at a strong pace with more th~ 25,000 square feet of new space under construction.