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Cerritos’ Economic Engine Slows, Could be Reflecting the Effect of Online Sales

STAFF REPORT

The Spring 2018 Cerritos Quarterly Economic Profile, an exhaustive study by Cerritos’ Advanced Planning Department, reports that the Cerritos economic engine slowed slightly in the fourth quarter of 2017, reporting $7.659 million in sales tax revenue versus $7.698 in 2016, a decrease of $40,000 or 0.5%.

Overall, City revenue grew only slightly, from $27.7 million to $28.1 million, an increase of 1.5%, or $416,000.

The statistical data behind the report is compiled from a wide variety of sources, including Cerritos’ Finance Division, the California Employment Development Department, and several real estate publications.

Overall from 2013 to 2017, total annual sales tax revenue has grown $5.1 million from $23 million to $28.1 million.

For the fourth quarter 2017, the Cerritos Auto Square (CAS) generated the greatest amount of sales tax at $4.053 million, compared to $3.798 million in 2016, a 6.7% increase.

But in the first quarter of 2018, the CAS actually sold less cars, 13,407, as compared to 15,025 in 2017, a decrease of 1,618 cars, or 10.7%. The revenue increase is a reflection of the increase in the price of cars.

It is a three-year downward trend for the CAS. In the first quarter of 2016, the CAS sold 15,563 cars; in 2017 Q-1, 15,025 cars; and in 2018 Q-1, 13,407 cars, a decrease of 2,156 from 2016-’18.

The Los Cerritos Center (LCC) was second in sales tax, but revenue dropped $168,000, or 12%, from $1.410 million to $1.242 million.

The Cerritos Industrial Park was the third highest sales tax generator, contributing over $707,000 in revenue which was an $87,000 increase, a healthy 14%, over last year.

Other sectors not including the industrial park generated nearly $573,000 in sales tax revenue, an increase of $30,000. These businesses include retail sales, machine shops, wholesaling, and warehousing.

In the first quarter 2018, TOT, which is 12% of the room rate charged by a hotel operator in the City, generated almost $189,000 versus $179,000 in 2017, a 5.7% increase from the same quarter last year.

Also, the city issued 1,066 new and renewal business licenses generating over $300,000 in fees for the general fund, a decrease of 8%.

Cerritos homeowners will be happy to know that the first quarter average for single-family three and four bedroom dwellings in the City was over $744,000; three-bedroom average was $690,000; four-bedroom average was $782,000.

Comparing houses housing prices regionally, Cerritos homeowners enjoy a substantial positive gap from comparable cities such as Cypress, Glendora, Lakewood, and Downey.

Cypress values sit at $691,000, Glendora $623,000, Lakewood $585,000, Downey $571,000.

Similar to housing prices,  the City “continues to experience a significant increase in commercial development, with new businesses opening in the City and commercial property owners continuing to invest in the renovation of existing shopping centers, providing the City with future additional sales tax revenue.”

Chase Bank construction located at 18801 Gridley Road in the Los Cerritos Center parking lot is nearing completion, it is anticipated that construction will be completed in the coming weeks.

HomeGoods will take over the old Golfsmith building offering kitchen essentials, lighting, bedding, bath and other home furnishings. It is anticipated that construction will be completed by summer 2018, with a potential store opening in August 2018.

The Lincoln Station Shopping Center is entering Phase III, with Blooming Asian Fusion Cuisine and other in-line stores being upgraded to a more contemporary design. The final phases of construction are scheduled to be completed by November 2018.

The Penske Jaguar/Land Rover of Cerritos dealership, located at 10861 183rd Street will be renovated, including a minor expansion of the showroom . Construction is scheduled to begin in May 2018 and is anticipated to be completed by the first quarter of 2019.

The Bank of America located at 18641 Gridley Road in the parking lot of the Los Cerritos Center will be renovated. Bank of America will remodel the facades of the existing building, the attached service canopy, and the ATM drive-through facility.

The former Coco’s Restaurant  will be replaced by Lunasia Dim Sum House  in the Fountain Plaza shopping center, it is anticipated that Coco’s Restaurant will vacate the existing building in the coming months.

The Sheraton Cerritos Hotel will be renovated. The current registration counter will be removed and new reception host stands will be erected. The bar and restaurant will feature a new configuration that extends to the exterior patio, which will house new steel shade structures.

The Chipotle Mexican Grill will soon replace Red Chile Mexican Restaurant at 10826 Alondra Boulevard, adjacent to Staples, in the College Square shopping center. It is anticipated that construction will be completed by August 2018.

Eureka American Restaurant will join Frida Mexican Cuisine in the former EI Torito Restaurant location. Building permits for tenant improvements were issued in April 20 18.

On July 28, 2016, the Cerritos City Council approved a proposal to reuse an existing building located at 17900 Crusader Avenue for Great Value Storage and supplemental auto storage for new vehicles. Demolition and grading permits were issued in February 2018 and interior demolition has begun on site.

Phase III of the master plan of development for the Valley Christian School campus is underway which includes the addition of a new gymnasium building, two metal bus office and maintenance buildings, and modular restrooms.

Finally, Aria luxury apartments is reporting 185 of the 197 units under lease, amounting to a total occupancy of 94%. Sage luxury apartments is reporting occupancy of 50%.

“The City of Cerritos is experiencing positive results in several major areas of the economy as documented in the Spring 2018 Cerritos Quarterly Economic Profile,” remarked Cerritos Mayor Mark E. Pulido. “Sales tax revenue from the Cerritos Auto Square, residential property values, business licenses and Transient Occupancy Tax revenue all increased, contributing to a continuing trend of a positive local economy.”

“You can’t argue with facts, and the overall facts show that Cerritos remains a great place to do business,” said Scott Smith, President/CEO of the Cerritos Regional Chamber of Commerce. “The overall economic numbers are a reflection of the great mix of retail, restaurants, entertainment, and industrial businesses.”

 

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3 Comments on "Cerritos’ Economic Engine Slows, Could be Reflecting the Effect of Online Sales"

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Tzeshan Chen
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But most of Orange county is only 7.75%.

Jas
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Most of OC sales tax is around 8%. Cerritos is
9.75%, plus Cerritos has to pay multiple Mello Roos School Taxes on all properties. Residents are not dumb, they surf for lowest sales tax. No sales tax in Oregon, so big items are being purchased in Oregon.

Jas
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All buyers are going to purchase in OC cities, in order to avoid Hiiiii sales tax. Even car buyers are going into other Orange County cities, changing their DMV to save thousands of dollars. New immigrants purchasing in Cerritos, Furnishing houses is less compared to the 1960s- 80s Boom. Big Ticket items are bought in in Orange County such as computers furniture and appliances. Cerritos does not have any luxury car dealers, luxury Clothiers, so 90703 is going into Orange County. Not surprised with the high vacancy rate, there’s better promotional offices close to Long Beach-Irvine Airports, and both have… Read more »