Sales tax sharing agreement draws Maserati, Alfa Romeo dealership to Yorba Linda's Savi Ranch

A sales tax sharing agreement with a planned Maserati and Alfa Romeo dealership in Savi Ranch and a letter of support for an Amazon headquarters in Orange County have earned approval from Yorba Linda's City Council members.

The tax sharing agreement with J Star Auto Group is designed to assist the company with capital improvement costs associated with building a new permanent dealership facility at

the site of the former Olive Garden restaurant on Oakcrest Circle in Savi Ranch.

The city would rebate 45 percent of the city's one percent share of the dealership's sales tax collections for 20 years, up to the amount of improvement costs, which the city estimates will be $2.7 million.

Projected sales tax revenue to the city during the subsidy period is $3.3 million, with $300,000 estimated in each future year. The dealership will hire 40 full-time employees. This year's total sales tax revenue from all sources in the city is expected to be $7.3 million.

The city “has found that it will benefit the city to induce J Star Auto Group Inc. to open and operate a dealership by enhancing local employment and expanding the tax base of the city,” officials noted before a required public hearing. (Nobody from the public spoke at the hearing.)

J Star bought the Olive Garden site in 2014 and has been discussing the possibility of a tax sharing agreement with the city for three years. The agreement becomes effective when the dealership opens, expected by Jan. 1, 2019.

A report to the council noted, “the city's share of sales tax will be a significant increase in revenue over that generated by the previous business occupied on the property.”

Among terms of the 29-page agreement: The city has the right to audit the calculation of sales tax, and should the dealership close for a continuous period of one year or more, J Star's right to receive payments is permanently terminated.

Currently, J Star sells Chrysler, Dodge, Jeep, Ram and Fiats from a facility on East Crystal Drive in the Anaheim portion of Savi Ranch.

The council also has voted to send a letter of support for Amazon's proposed second headquarters to be located in Orange County, an estimated $5 billion project that has drawn interest from dozens of cities and counties nationwide.

Lucy Dunn, president and chief executive officer for the Orange County Business Council, requested Yorba Linda send a letter supporting a proposal to locate a new facility in Irvine, but the council instead indicated backing for the project anywhere in Orange County.

However, most council members noted it was unlikely any Orange County city would be up for serious consideration due to workforce costs, inadequate employee housing and other issues, such as traffic.

A headquarters facility would not include just warehouse workers, but would involve a cross-section of jobs, which the business council said could be up to 50,000 high-paying positions.