A simple analysis of the statistics related to the proposed Target Shopping Center reveals that Target would be an expensive proposition for Scotts Valley property owners.
The preliminary traffic report concluded that the only way to alleviate the significant traffic impacts of this proposed project would be to build a mid-town interchange — a new on/off ramp on Highway 17 between the Granite Creek Road and Mt. Hermon Road exits.
A new interchange would cost about $50 million dollars if it were approved today. Land costs and financing this construction over 20 years at a 6 percent interest rate would easily result in a total project cost of $100 million.
According to the Santa Cruz County Assessor’s Office, there are about 4,000 property parcels in Scotts Valley. About 300 of those are commercial properties.
Simple math reveals some amazing numbers. Dividing the estimated $100 million cost of the mid-town interchange by the number of private properties tells us that this interchange would cost each household more than $2,700. That is a high price to pay for the privilege of having a local Target!
Mayor Randy Johnson and Councilman Dene Bustichi have been quoted as saying Target would generate about $500,000 in sales tax revenue for the city of Scotts Valley. The city only gets to keep 1 percent of the 8.5 percent sales tax. To achieve that, Target would need to generate $50 million in annual taxable sales — a tall order, even for a 155,000-square-foot big-box store.
For the economics of this project to be really worthwhile for our city, this $500,000 would also need to be additional sales tax revenue, not dislocation of sales from other local retailers, as admitted by Target in local advertising.
The Scotts Valley City Council should do the simple math. A Target Shopping Center is too expensive for Scotts Valley.
Les Dittert, Scotts Valley