Guerra predicts layoffs in townhall meeting

DOWNEY – Rising pension costs may trigger layoffs in the city of Downey within one year, this according to Councilman Mario Guerra who delivered the news during his town hall meeting Wednesday at the Barbara J. Riley Community and Senior Center.

The City Council has approved employment contracts with several labor unions representing municipal workers during the last year. Guerra has voted against all the contracts, maintaining that current employees should begin contributing to their own pension plan – Downey taxpayers currently pay employees' contribution to CalPERS, the state's retirement system.

"I will be surprised if we don't have layoffs in the city of Downey within a year," Guerra told an audience of about 140 people. "I'm not trying to cry wolf or scare people."

Guerra said the city's pension deal with employees is "very super generous. I think it's too rich under today's circumstances."

The councilman also said devoting 70 percent of the city's total general fund to the police and fire departments "may not be sustainable."

"But I don't want to get rid of our police and fire, so don't get scared," he said.

The rest of Guerra's town hall meeting was otherwise upbeat. Guerra said the city projected a nearly 20 percent increase in sales tax revenue compared to last year, thanks to strong support from the community.

The Olive Garden restaurant is No. 2 in the chain's list of highest grossing restaurant, and BJ's Restaurant and Brewhouse and Elephant Bar are in their companies' top six in sales, Guerra said.

Guerra called the city's deal to bring in a Fiat dealership on Firestone Boulevard "one of the best economic deals in the city's history." Downey purchased the land at auction for $1.9 million and sold it to the Fiat dealer for $3.8 million, in a deal financed at a 6-7 percent annual interest rate.

Construction of the Fiat dealership is still underway but 50 Fiats have already been sold.

Other news Guerra delivered at the town hall:

•The new supermarket at Imperial Highway and Paramount Boulevard – previously Beach's Market – is expected to open within 60 days

•Wal-Mart's grocery store in the former Alin's Party supply store is still "on track" to open possibly within six months. Guerra described the market as "WalMart's version of Fresh & Easy with a Latino twist."

•An official announcement will be made within 60 days, but the Columbia Memorial Space Center is now an official affiliate of the Smithsonian.

•Sambi's restaurant will "most likely" reopen but under new ownership and possibly under a new name

On redevelopment, Guerra said there is "no way to save the Avenue (Theatre)."

"It's nostalgic, not historic," he said. "There's no one who wants to spend $2 million for a community theater. The business model doesn't work."

Guerra offered few details on the proposed Tierra Luna project that would replace Downey Studios, but divulged that it would include a four-star hotel, and high end restaurants and retail.

"It's not going to be a mall," he said. "We're finally going to have our steakhouse."

The land totals 88 acres, 20 of which is owned by the city. More details are expected to be released next month when the Planning Commission reviews preliminary plans.

Responding to a resident's inquiry about Trader Joe's, Guerra said the city doesn't fit the company's preferred demographics.

"We're not white enough for them, we're not rich enough for them," Guerra said bluntly. "I don't have a problem throwing them under the bus on this. Downey's story needs to be told. We can support them, but they're not interested."

Guerra, now in his second term on the City Council, has hosted a town hall meeting in each of his years as a council member.