By Robert J. Norton
Other Voices
The editorial in the March 7 edition of the Crier discussed pros and cons of a group of theaters vs. a boutique hotel at the city’s First and Main site. I wish to address some additional points of considerable significance.
The site has appreciated significantly in value since its purchase and should now be worth in excess of $4 million.
Annual lease payments on the property for a best-use hotel should be more than $400,000, producing an annual income for the taxpayers of $900,000 when the $500,000 annual room tax is included.
Sales-tax revenue from the restaurant and other retail establishments on the site, estimated at up to $25,000, would add to this total.
The promoters of the six-theater complex, which includes housing and retail, point to only sales tax as a city revenue source; they do not include sales tax on theater tickets, since these are not subject to the tax.
They also state that a theater is a financially marginal operation and would have to have some sort of subsidy from other projects in their development package - or from the city?
At the Feb. 27 city council meeting a city consultant stated that 10 large theater chains were in various stages of bankruptcy.
In a report issued Feb. 23, Moody’s Investors Service said six of the top 15 movie theater companies are in Chapter 11 bankruptcy proceedings.
The report also said there are probably 30 percent more movie screens nationwide than are needed.
The theater in downtown Los Altos folded years ago for lack of business. The art theater in Palo Alto seems to be barely scraping by. Prime-time shows at Century 16 seem to be very sparsely attended.
Every year at budget time the city council becomes painfully aware that Los Altos does not have the commercial and industrial tax resources to help it pay its bills, unlike Mountain View and other cities in the area.
Consequently, our city is not able to provide the services, some essential, that we need. For example, we cannot accommodate 500 youngsters who need gym space for basketball and other sports activities.
The city is asking a local foundation for a gift of $2 million to help out in this effort.
If the city had the additional income each year that a fine hotel would produce, it could increase the salary scale for its employees and have a much better chance of attracting the qualified people it needs to fill its many job vacancies.
The theater complex you read so much about will not help with the city’s revenue needs. One of the hotels proposed can contribute close to a million dollars annually to the city’s revenue.
As the Crier editorial stated, there are other locations for a theater (for use by those willing to pay their own way).
Norton, a Los Altos resident, is a frequent visitor to council meetings and has researched the Main and First site issue.
