According to an Aug. 14 Wall Street Journal story, “U.S. households boosted retail spending 1.2% in July, the third straight monthly increase despite a rise in coronavirus infections.”
At the risk of bragging, Glendale businesses might comment: “That’s nothing!”
Despite slowdowns and outright shutdowns of restaurants, bars, gyms and movie theaters, the Glendale economy is not just surviving the COVID-19 pandemic but thriving through it.
A strong early indicator of a local economy is a city’s share of sales tax, which is placed on nearly all items sold.
According to the city’s first monthly financial report, released last week, “Through May 2020, General Fund revenues are slightly above target at $223 million or 94.6% of the annual budget. Revenues are $15.5 million or 7.5% higher than the same time last year. … City sales tax increased by $6.8 million or 6.4% over the same time last year.”
A 6% increase would be solid most years—but considering the pandemic economy, it’s fairly remarkable.
“These numbers are not completely surprising, due to the city’s focus on economic development over the past several years and our strategic approach supporting the attraction of new business,” Glendale City Manager Kevin Phelps said.
The city continues its powerful expansion, he noted: “Even during the pandemic, Glendale has seen continued growth in new business development, particularly near Loop 303. But while this is an encouraging development, we are also cautious in our optimism when we think in terms of overall recovery for our city, due to the serious and unpredictable nature of this virus.”
Robert Heidt, president and CEO of the Glendale Chamber of Commerce, said his membership is optimistic about the local economy.
“Overall, there is more positive traction within our membership and community, which is great to hear,” he said. “In fact, we just recently connected with several brokers and property management companies and they, too, are seeing positive movement for their tenants.”
On the down side, Heidt said, closures and partial closures due to the pandemic have been painful: “Restaurants have been impacted as gyms, theaters, water parks, our sporting events, concerts, tourism for conventions—while we hate to see this occur, every step we take towards creating a safe community increases the ability for these operations to resume.”
Another indicator of strength is many Glendale companies are hiring.
“We have been very fortunate, relative to a lot of other businesses,” said Matthew Mitchell, Corning Optical’s Glendale plant manager.
“We are still hiring, as 2020 revenue will be better than 2019. We have had to navigate all of the new COVID challenges like everyone else and believe the worst is behind us, as the statewide statistics are improving.”
Indeed, the city’s financial report shows Glendale emerged from a short, sharp dip:
“For April and May 2020, General Fund sales tax revenues decreased a total of $2.3 million over last year as a result of the COVID-19 ‘stay-at-home’ executive order.”
Heidt said the chamber recognized the need for safety—though with a cost.
“As we all learn how to deal with COVID while keeping our lives and economy going, we need to help to increase consumer confidence—we know there is a reduction in some businesses related to consumer confidence,” Heidt said.
He said the chamber is “launching a business pledge encouraging businesses to take a pledge to continued safe practices and by doing so receive recognition they can use to show their customers, patrons and the rest of the business community they are doing their part.
“This can have a significant impact in getting people more comfortable going to their favorite coffee shop, place to eat, place to shop local.”
According to Vicki Rios, Glendale’s assistant city manager, May and June tax revenues also increased.
“The increases are mostly a result of strong construction contracting sales tax revenue, which offset losses in retail, amusements like sporting event ticket sales and movies and restaurant/bar,” she noted.
Rios said she expects Glendale’s economy to remain strong through 2020, fueled by large construction projects all around the city.
“The reason I think Glendale is in better shape than others is a pretty significant increase in construction and contracting revenue,” she said.
In May and June, as Glendale closed its fiscal year strong, general fund revenues topped $20 million, rising 4% compared to the same period the year before.