PITTSBURG -- The city will loan the company that owns Century Plaza $1.3 million over a five-year period so that improvements can be made to the shopping center to retain Target as an anchor tenant.
The Pittsburg Target store opened in 1988, and there were concerns that the retailer might be leaving. Century Plaza, which is owned by the Seeno development family, generates more than $1 million annually in sales tax revenue for the city. A large chunk of the loan amount -- $350,000 -- was to be disbursed to Century Plaza within 30 days of Century providing written confirmation that a lease extension with Target had been signed on or before July 1.
"We, working with the property owner, are trying to make sure the anchor tenant not only stays for the 10-year period but also renovates and expands," said assistant City Manager Garrett Evans.
He is referring to long-range plans by the retail giant to eventually remodel the Pittsburg store into an expanded Target that has a wide selection of groceries. But when that will happen is unclear. A representative from Target could not be reached for comment.
The transaction is essentially an interest-free loan provided that Century Plaza Corp. repays the loan over a five-year period that begins in July 2019. There are also repayment credit provisions in the loan agreement that would knock off a third of the amount owed, provided Century Plaza meets conditions that call for keeping the shopping center in good condition, having a minimum occupancy rate of 70 percent and having an anchor tenant while the loan agreement is in effect.
The loan, approved unanimously Monday by the City Council, comes from the city's economic development fund, which has a balance of about $1 million. The rest of the loan will come from reserves of the Pittsburg Power Co., a city-owned entity that uses revenues from energy projects it develops to promote economic development in the city, according to a staff report recommending approval of the loan.
Douglas Messner, president of Sierra Pacific Properties, the Seeno firm that owns Century Plaza, could not be reached for comment about how the loan proceeds will be used to make improvements at the shopping center.
In addition, the city has agreed to install police surveillance cameras, at no cost to Century Plaza, at locations throughout the shopping center within the next several months. The cost of adding the cameras will be paid from reserves of up to $100,000 from Pittsburg Power Co.
At Monday's meeting, the council also approved a citywide operating budget of $182.9 million for the 2013-14 fiscal year that calls for no layoffs or reduction in city services. The fiscal year starts July 1.
The budget calls for general fund spending to be $33.6 million, or 8 percent greater than fiscal year 2012-13. The general fund pays for most city services, including police operations, and is derived mainly from sales and property taxes and fees.
General fund revenues are expected to increase by 10 percent to $31.8 million. Most of the general fund's revenue gain is expected from the passage in June 2012 of Measure P, which increased sales taxes by a half-cent on the dollar. But it wasn't enough to completely close the gap. So the $1.8 million deficit is being made up with money from the city's budget-stabilization fund.
Contact Eve Mitchell at 925-779-7189. Follow her on Twitter.com/EastCounty_Girl.