Hermosa Beach : City Officials Hear Rustle of Sales Tax as Plaza Opens

The first of 25 stores at the new Plaza Hermosa Shopping Center, which together are projected by city officials to increase annual sales tax revenue by at least 30% next year, opened Wednesday with flowers, band music and a catered breakfast at nearby Hermosa Community Center.

Scores of shoppers rushed into the Vons grocery shortly after 8 a.m. as city officials, developers of the $15-million shopping center and invited guests predicted that the white stucco and red tile complex would provide a much-needed catalyst for a revitalization of the downtown business district.

Several other stores and restaurants are expected to open during the summer, with the entire project scheduled to be completed by the end of the year, said Tom Corley, project manager for Alexander Haagen Development Co. of Manhattan Beach. Construction of the center, which includes 100,000 square feet of retail space, began 10 months ago.

The center will provide about 200 jobs, Corley said.

The city floated more than $6 million in bonds to finance construction of a 175-car parking garage beneath the center, which will be repaid by the developer through rent. There are an additional 300 surface parking spots, Corley said.

City Manager Gregory T. Meyer said the center should provide $300,000 in additional sales tax revenues during its first year, making it the largest single source of sales tax for the city. The city currently receives just above $1 million a year in sales tax revenue and has a $9.2-million budget.

Several City Council members were more optimistic than Meyer, estimating that the center will earn the city between $600,000 and $900,000 in sales tax revenues during its first year.

“It is a phenomenal boon to the city,” said Councilman Jack Wood.

Corley said the center, which has access from Pacific Coast Highway and Pier Avenue, took four years to pull together because of the difficulty in finding 5.5 acres with access to the highway and near the beach. Haagen purchased several homes along Pier Avenue as well as the former Thompson manufacturing complex in order to build the project.

Meyer said it is the first center south of Los Angeles International Airport on the west side of Pacific Coast Highway. He said that makes it a prime target for southbound commuters who want to stop on the way home from work.