Giant RV agrees to create jobs in exchange for tax rebate from city

DOWNEY -- The City Council unanimously approved an agreement with Giant RV on Tuesday, giving the business a sales tax rebate in exchange for significant job creation.

According to city staff, Giant RV will receive up to $504,000 over the course of seven years and create 55 new full-time jobs at the cite per the agreement. The RV dealership will use those proceeds to offset operational and facility costs.

“This is just another effort of staff’s; we’re always seeking to expand our economic development opportunities and work with our businesses and see how in conjunction we can increase our property tax base, our sales tax base and other benefits associated with a new business, especially a dealership of this size and that job creation component,” said Community Development Director Aldo Schindler during his presentation to council. “I think most importantly the sales tax rebate allows the city and Giant RV to reuse this land that has been vacant for quite some time.”

Staff will monitor the agreement on an annual basis to verify that Giant RV is meeting their end of the deal.

After the first year of operation, the city will examine the amount of sales tax produced by Giant RV. If that amount exceeds $180,000, the city will rebate the dealership 26 percent of the exceeding amount up to a maximum of $72,000 per year.

According to economic analysis run by the city on the site, a new dealership should bring up to $2.5 million of tax revenue to the city in the form of vehicle sales, part sales, service and property tax.

Mayor Sean Ashton admitted to having some reservations, but conceded that the agreement could work.

“I always have my reservations about this,” said Ashton. “When I look at this and I’ve seen how its worked, I do actually see the benefit of this…I think in this case this is gonna be a great benefit to Giant RV and more importantly a great benefit to the residents of Downey.”

Council voted 3-0 in favor of the agreement, with Councilmember Alex Saab absent and Councilmember Fernando Vasquez abstaining.