New Simi Target Store Too Expensive

The cost of doing business in Simi Valley might be a bit too expensive if you’re a big box store like Target.  Of course, the need for a new Target store at Madera and Los Angeles may be open for debate (a Target exists at Sycamore and Cochran and nearby the proposed new location in Moorpark).  Nevertheless, Target has been trying now for a while to get the new store rolling and it’s been slow going.

According to an article in The Ventura County Star, Target is going back to the city and asking for new terms in an effort to reduce construction costs.  So far, the requirements have included a million dollar plus storm drain system overhaul, two bus turnout lanes, and landscaping requirements that will make the new Target store look like every other new building and shopping center constructed in Simi Valley in the past 5 years, with faux towers and faux stone facades.

New Target Store

New Target Store

From The Star:
If at least $2 million can’t be shaved from Target’s plan to build in the west end of Simi Valley, store officials say they might have to scrap the project.

The company hopes to renegotiate the terms of its contract to remove some of the city requirements that make the project “financially unfeasible,” said one Target official.

“Target is not exempt from current economic conditions,” said Anna Anderson, a Target spokeswoman.

But she added Target is working with city officials to find something “mutually acceptable.”

So in this economy, the current plan is too expensive.  Will the City of Simi Valley be flexible?  They should be.  Despite the argument that another Target isn’t necessary, they’ll be successful in that space, resulting in sales tax revenue and new jobs in Simi Valley.  The city can also stand firm and keep the plan as-is, which may very well result in Target walking away from the deal.

Interestingly, the most expensive portions of the proposed development include infrastructure enhancements, like the storm drainage improvement.  However, with the newly developed Target store comes a new assessment of the property’s value which will undoubtedly result in an increase in property tax for the shopping center.  It seems reasonable, in an effort to keep the project moving forward, that the city might consider contributing to infrastructure costs to keep this rolling and bring these new jobs into town.  Time will tell…

In the meantime, enjoy this amateur video of mine from about 7 months ago while we geared up for local elections, and hear my borderline obnoxious view on government influence on local construction.

4 thoughts on “New Simi Target Store Too Expensive

  1. Mike,

    I disgree….This will dilute other business in town, it will add very little to the Sales Tax revenue. The city is deluded on sales tax that does not exist. Add more residential units and the shoppers will support our commercial base. The formula for that balance has been screwed up for years. Simi Valley is not a destination town. Simi Valley is not a reason for Valley shoppers to skip Topanga, Promenade or Northridge. The Thousand Oaks Mall is keeping Conejo people in Conejo…now that the hand writing is on the wall. Lets add the residential units to match the commercial tax dollars our city desires.

    Oh yeah and the high end stuff is done, we don’t need more Big Sky’s and Crests. Lets get busy with some nice middle range housing.

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  2. Ted,

    I don’t disagree with your points. But does another Target dilute existing businesses more than the existence of Simi Town Center? AND are you talking about a need for new housing in general, or new housing in place of the new Target store?

    I hear what you’re saying about the middle range housing. How likely is that to ever happen? And where would they build?

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  3. Why is it the role of government to determine if a store dilutes the profits of other stores? It is already zoned commercial ( a legitimate government role), why means the free market should determine what store type moves in.

    Mike, I really like that video.

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  4. By the way, this snippet in The Acorn today:

    http://www.simivalleyacorn.com/news/2009/0417/Editorials/007.html

    The Acorn admires the council’s determination not to see a building built below standards, but risking the loss of thousands of dollars in new sales tax and 250 new jobs seems a bold move given the current budget situation at city hall.

    The council likes to remind us how important it is to shop locally because of how sales tax goes to benefit local services like road work and law enforcement. And yet they’re willing to pass up a large sum of future revenue in order to save a few design elements?

    It’s understandable the council wants to aim high with this store at the western gateway to our city, but the current economy and the benefits this retailer is likely to bring may mean officials need to readjust their target.

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