Lancaster, Palmdale Approve Truce in Retail Dispute
The cities of Lancaster and Palmdale have agreed to bury the hatchet — and, for once, not in the other jurisdiction's back. Early this year, both city councils adopted "anti-piracy" resolutions in which they pledged not to offer incentives to businesses located inside the other's borders.
For years, the two cities have engaged in classic battles over retail businesses. But some recent changes on the Palmdale City Council and the business community's leadership appear responsible for the removal of the "Cactus Curtain" along Avenue M, which separates the two cities.
"They would steal from us and then claim we were stealing from them," Lancaster Mayor Frank Roberts said. "We just got really tired of it. This was a big mess for years and years and years."
The mess was partly responsible for the Legislature's passage last year of a measure (AB 178) intended to prevent cities from luring a neighboring jurisdiction's large retail store or automobile dealership. The measure, co-authored by Republican Assemblyman George Runner — a former Lancaster mayor — allows for sales tax-sharing agreements in cases where a retailer does relocate. Runner also authored legislation last year that implemented 1998's Proposition 11, which allowed jurisdictions to share sales tax revenues with a super-majority vote of the elected body, rather than requiring an election.
Roberts said he and Runner worked on the same issues years ago when they were colleagues. But Roberts was unsure that the legislation was adequate to halt the Lancaster-Palmdale rivalry, so he sought the anti-piracy resolution.
Relations between the two cities were sour as recently as last summer, At that time, representatives of Costco, which wanted to expand the Lancaster store, made it known that Palmdale city officials had offered a free building and free land if Costco would relocate. Palmdale officials deny they ever made such an offer, but the Lancaster City Council refused to believe the denial and fought to keep the sales tax-generating Big Box.
By September, the Lancaster City Council had approved a $3.9 million plan in which the Lancaster Redevelopment Agency would buy an empty shoe store and restaurant next to Costco and a 99-Cent Only Store that remains in business. The city plans to level the empty stores and lease the site to Costco for $1 a year. The city would sell the other building to Costco for $1. The city apparently will need to exercise eminent domain to get the 99-Cent Only Store, which is not interested in moving from its two-year-old location.
Palmdale Vice Mayor Shelly Sorsabal said the incident was simply a matter of a business playing one city off another.
"We weren't even trying to get Costco. But because we have such a history, the retailer can say whatever they want," Sorsabal said.
"They have constantly courted Costco," retorted a still-suspicious Roberts. "They held $5 million in check and said anytime you want to come over from Lancaster, it's yours."
In the past, Palmdale has enticed other retailers to leave Lancaster — and vice-versa — and both sides know that retailers have used the competing municipalities for bargaining leverage. "In fact," noted Lon McCracken, of the Greater Antelope Valley Chamber of Commerce, "there has been a fair number of retail establishments who have moved from one city to another."
But Sorsabal contended those days are history. "To spend millions of dollars to lure one business to move five miles is ludicrous," she said. These days, the lines of communication are open, said Sorsabal. If she or her staff hears a rumor, she picks up the telephone and calls a colleague on the Lancaster City Council.
"We think those days of a cantankerous relationship that have occurred are over," said Stafford Parker, Lancaster Redevelopment Agency Executive Director. The two cities worked jointly on the anti-piracy resolution, which, Sorsabal said, "sets a precedent" for the city managers and economic development directors.
Added Lancaster Mayor Roberts, "City managers are generally into the competitive mode a lot more than the rest of us." Roberts said the written resolution, which both city councils approved unanimously, is important because past oral promises were quickly forgotten.
"It's clear that the old guard is out and the new guard is in," said McCracken, chairman of the Greater Antelope Valley Chamber. The organization formed in mid-1998 in response to the division between the two cities. "There are bigger fish to fry than each other. There are a whole lot more businesses outside the Antelope Valley that we need to get."
Both cities have extensive economic development programs, and neither side apologizes when it comes to competition for businesses from outside the area. The cities became increasingly aggressive during the 1990s as the aerospace industry eliminated thousands of jobs in the Antelope Valley. Both cities have extensive enterprise zones that offer tax breaks for businesses that purchase equipment and add workers.
In December, Palmdale celebrated the announcement from SR Technics, an offshoot of SwissAir, regarding the opening of an aircraft maintenance and repair facility this year. The SR Technics shop will employ about 1,000 people by June and as many as 6,000 people within five years.
That news offset probable layoffs at the Lockheed Martin factory, where state-of-the-art spy planes are built. Up to 800 people could lose their jobs at Lockheed Martin, the Antelope Valley Press has reported.
In Lancaster, Rite-Aide opened a 1 million-square-foot distribution center that continues to add about 20 employees a week, said the Redevelopment Agency's Parker. Michaels Arts & Crafts also opened a distribution center with 320 workers, and room to expand, in Lancaster last year.
And both cities continue to experience retail growth, with Palmdale getting a Lowe's home improvement center, a Dillard's department store and two Marriott hotels, and Lancaster seeing a new 22-screen Cinemark theater.
Shelly Sorsabal, Palmdale vice mayor, (661) 267-5100.
Frank Roberts, Lancaster mayor, (661) 723-6019.
Stafford Parker, Lancaster Redevelopment Agency executive director, (661) 723-6128.
Lon McCracken, Greater Antelope Valley Chamber of Commerce chairman, (661) 942-0466.