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CERRITOS’ ECONOMIC ENGINE IN NEUTRAL, AUTO SQUARE SALES CONTINUE DOWNWARD TREND

BY BRIAN HEWS

The Winter 2018 Cerritos Quarterly Economic Profile, an exhaustive study by Cerritos’ Advanced Planning Department, showed that the Cerritos economic engine slowed slightly in the third quarter of 2018, reporting $8.3 million in sales tax, a decrease of almost $126,000 in tax revenue, or 1.5%.

The drop comes after the city’s tax consultant, HdL, adjusted the report to include use tax. Use tax is a tax on purchases made by Californians out-of-state on the internet.

In order to capture the taxes on those out-of-state purchases, California created a pooling system to distribute the local share of use taxes related to those purchases.

The Winter 2018 report includes the use tax allocation.

For the third quarter 2018, the Cerritos Auto Square generated the greatest amount of sales tax for the city totaling $2.824 million, compared to $2.968 million in 2017, a $141,000 (4.9%) decrease.

Fourth quarter 2018 vehicles sales continued the downward trend, with 1,479 less vehicles sold in 2018 versus 2017; a drop of 10.5%.

Vehicle sales for 2018 was 54,402 compared to 59,322 for 2017 for a drop of 4,920 cars, or 8.2%.

4,920 vehicles at $25,000 per vehicle equates to $123 million; a $1.23 million hit to Cerritos tax coffers.

The Los Cerritos Center (LCC) was second in sales tax revenue at $1.067 million, for a welcome increase during the era of online sales of $53,859 or 5.3% over 2017 third quarter revenue.

First and second quarter 2018 sales tax revenue for the LCC were $1.009 million and $1.070 million respectively.

The Cerritos Towne Center was the third largest sales tax generator for the city, tallying nearly $344,000 in revenue, for another welcome increase of $16,418 or 5% over 2017 third quarter revenue.

First and second quarter 2018 sales tax revenue for the CTC were $319,000 and $336,000 respectively.

During September, October, and November of 2018, the Transient Occupancy Tax,  which is 12% of the room rate charged by a hotel operator in the City, generated over $239,000 versus $320,000 in 2017, a 25% decrease from the same period last year.

It was noted that the Sheraton was under major renovation, which likely caused the decrease.

In a sign of future activity, the city issued 1,286 new and renewal business licenses generating over $390,000 in fees for the general fund, an increase of 3%; the license activity is reported for the fourth quarter 2018.

Another sign of future activity is the issuance of Certificates of Occupancy, a high number indicates robust future commercial activity.

78 CO’s were issued in fourth quarter 2018 compared to 63 in the previous year.

Cerritos homeowners will be happy to know that the fourth quarter average for single-family three and four-bedroom dwellings in the City was over $741,000; three-bedroom average was $685,000; four-bedroom average was $775,000.

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 $698,000, Glendora $625,000, Lakewood $587,000, Downey $584,000.

Work in Progress

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.”

Renovation of the existing Bank of America building located in the parking lot of the Los Cerritos Center is underway. The existing building attached service canopy, and an ATM drive-through facility are all getting a new look.

Interior and exterior plans have been submitted for the proposed Good Fortune Supermarket at the former Zion Market located at the corner of Carmenita and Artesia Boulevard. 

Good Fortune is a large chain supermarket with a majority of its locations on the East Coast, but the supermarket chain is beginning its expansion into the California region. Modifications are expected to be finished by early Spring 2019.

Jersey Mike’s Subs is in process to take over the former Coffee Bean and Tea Leaf space located at the corner of Bloomfield and Artesia.

As part of the improvements, the property manager will be required to restore the fountain art piece currently located on the corner. The project is scheduled to be completed by Spring 2019, with a potential opening in March 2019.

Plans for the Tous Les Jours Bakery located at 13359 South Street within the Cerritos Plaza Shopping Center are going through final stages. Final corrections are being made to the

grading and construction plans , and the project is anticipated to be completed by Summer 2019.

The Sheraton Cerritos Hotel is under renovation with expected completion by Spring 2019. 

Finally, the city is reporting that Aria and Sage luxury apartments, on the corner of Bloomfield and Artesia, are at 90% occupancy. 

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