Redlands council asks voter for distribution center tax increase
The City of Redlands, at the center of the booming Inland Empire warehouse development market, is set to ask voters in November to approve an annual 3.5 cent-per-square-foot tax on the area's numerous distribution centers.
Currently the distribution center's pay $24 per year to maintain a business license with the city. Redlands City Council last week approved the new tax, and if approved by voters, could add thousands of dollars a year to the distribution center tenants' license bills and land these funds squarely in the city treasury.
As an example, a 300,000-square-foot distribution center under the current system pays $24 per year. Under the proposed tax system, the same center would pay $10,500 in licensing fees. The amount is more in line with the city's business license tax system for warehouses, which is now based on the gross receipts produced by the storing of products.
Redlands has seen an explosion in the number of distribution centers throughout the city over the past several years, as operators handling goods from the Southern California ports have moved to the area in search of cheap land to develop. The city, which sits at the eastern edge of the Inland Empire's distribution center growth area, has more than 7 million square feet of distribution center space being utilized, with an additional 20 percent more sitting vacant.
If approved, the tax is expected to raise an additional $250,000 in revenues for the city. Despite this, the city would still be facing a projected $3.2 million shortfall.