Residents ringing alarm bells over secretly negotiated tax-sharing agreement that would bring Costco and gas station to OC city
A plan to bring Costco to an Orange County city has sparked a bitter backlash.Residents in Brea say city officials approved a decades-long tax-sharing deal that favors a developer, and the dispute is now moving toward a potential lawsuit.The controversy centers on a proposed Costco and gas station planned for the former 34-acre Beckman Coulter campus.City leaders approved a 50-year tax-sharing agreement with developer Dwight Manley last December, according to Voice of OC.Under the agreement, Brea’s general fund would receive none of the project’s discretionary sales tax revenue for the first two years after Costco opens.The city’s share would then start at 5% and gradually increase, reaching a 50-50 split about 30 years into the 50-year deal.
Another 5% of the annual sales tax generated after the rebate begins would be set aside each year for the city’s senior center programs.Over the agreement’s span, Manley is projected to receive roughly $77 million, while the city is expected to collect just over $50 million and about $7 million will go toward senior programs.The developer would also receive 40% of any additional sales tax revenue if Brea raises its sales tax during the agreement.City officials say the incentive is necessary to lure Costco to Brea, arguing the project would generate new tax revenue, create jobs and boost property tax collections that otherwise would not exist.
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By clicking above you agree to the Terms of Use and Privacy Policy.Never miss a story Manley said the agreement reflects the enormous cost of acquiring and developing the property, citing the site’s roughly $140 million purchase price and additional development costs.
He argued the project offers only a modest return by industry standards and pursued it because city leaders had spent decades trying to attract...