Innovative Stimulus Plan Makes the National News

When a dependable source of revenue for the City of Lancaster dried up as the recession worsened and consumers cut back their spending, it opened the doors for new ideas and new thinking at City Hall. While a change in the culture of city government was already underway, a response to the recession put that change on a fast track and resulted in a multi-approached program that landed Lancaster on the NBC Nightly News and CNN and has other cities in the Antelope Valley following its lead. To encourage spending, the city is offering $30 gift cards for every $300 spent in local businesses and rebates vehicle registration on new car and motorcycle purchases. Incentives to brokers will fill empty industrial and commercial space. Homeownership will increase through a program to fix up foreclosed homes in deteriorating neighborhoods. With a drop in fourth quarter sales tax revenue of $822,000 between 2007 and 2008, this is an environment where every idea is on the table; where the city officials and staffers in the economic development department, in the words of one major business owner, “get it” that business needs to thrive and without business Lancaster can become a ghost town. A $30 gift card may not seem like much but in the poorest economy the nation has experienced in decades the important thing is making the effort. “If we do not fail at a few things we are not pushing the envelope enough,” said Mayor R. Rex Parris. An attorney who handles personal injury and civil litigation, Parris came into office a year ago following an election that had a field of eight mayoral candidates. New city leadership followed a spurt in hiring that brought in younger people and those who didn’t come from a government background. The combination of these two factors created a new dynamic. The elected officials could ask for change and get it, and the staff could come up with new ideas that the leadership would be receptive to. In the city government Parris said he found a culture made of two types of people innovators who weren’t afraid of facing problems and making mistakes; and the maintenance workers who wanted to maintain the status quo. It was those innovators that Parris wanted to motivate and give latitude to develop new ideas. “In some departments it took,” Parris said. “Economic development was one of them.” So far about 300 businesses have signed up to take the gift cards, with city officials expecting that number to rise as high as 500. By the end of March, 200 buyers of vehicles had been rewarded with gift cards that served as a rebate on the registration fee. While it is understood that retailers suffer the most when consumers cut back on their spending, the redevelopment staffers opened the gift card program to anyone who had a business license. That brings in professionals such as lawyers and insurance agents where the $30 card can buy services that workplace benefits had previously covered. “We understood the dentist is also struggling during this economy,” said Luis Garibay, of the city’s redevelopment department. While the gift card distribution gets the most attention, the Lancaster stimulus plan is more comprehensive, said Steve Gocke, a senior redevelopment project coordinator. With the merchants program the goal is not just to bring customers into city shops but create long-term alliances between the city and the business community and among the businesses themselves. The housing portion of the program assists in keeping people in their homes and gives work to contractors and sub-contractors by fixing up shabby homes in foreclosure that have been purchased by the city. Buyers of the rehabbed homes are required to live in them for 45 years. What that does is tip the balance in some neighborhoods toward ownership and away from renting. “We will continue until we can stabilize the more blighted neighborhoods,” said Elizabeth Brubaker, director of housing and neighborhood revitalization. By devising a results-oriented program that rewards the consumer who spends, Lancaster struck on something other cities want to emulate. Neighboring Palmdale has also been hard hit by the recession, losing more than $500,000 in sales tax revenue in the fourth quarter of 2008 when compared with a year earlier. So in February city leaders set aside $200,000 to give out as $300 gift cards for the Antelope Valley Mall to buyers of new cars in the city. Another $100,000 will fund $30 gift cards for every $300 spent at local shops. For the month of March, 216 gift cards were given to new car buyers. The city needed its own stimulus program so that its car dealers and merchants were not at a disadvantage, said David Walter, economic development manager.