Tustin wants Ikea cash

Lolita Harper

COSTA MESA -- The city of Tustin is asking for a percentage of any

sales tax received from the Ikea component of the Home Ranch project,

citing Costa Mesa may have enticed the retailer to leave Tustin by

offering financial assistance.

In a letter to Costa Mesa, Tustin City Manager William Huston said the

proposed development agreement with C.J. Segerstrom & Sons appeared to

show some intention to establish a community facilities district on the

Home Ranch property. The formation of such a district could provide

significant tax-exempt incentives.

Costa Mesa City Manager Allan Roeder denied any suggestion that Costa

Mesa offered any financial incentives to C.J. Segerstroms & Sons. In

fact, Costa Mesa has a policy that prohibits the city from extending

offers to businesses to leave other cities.

“I think they are making sure they are covering all their bases,�

Roeder said.

To the extent Tustin believes it may be entitled to part of the sales

tax generated from Ikea, it is making sure it takes all due precautions

to protect its interests, Roeder said.

“It is perfectly understandable,� he said.

Tustin city officials were unavailable for comment.

Don Collins, the project manager for the proposed Ikea, said the

furniture store chose to relocate after unsuccessful negotiations with

the city of Tustin.

“We tried to negotiate with the city of Tustin and our landlords, but

after years of the back and forth they simply couldn’t give us enough

room to make the expansion we were hoping for,� Collins said.

Not only does Costa Mesa offer an available site -- a parcel of a lima

bean farm bordered by the San Diego Freeway, Harbor Boulevard, South

Coast Drive and what could be an expanded Susan Street, complete with a

freeway offramp -- the land is owned by the Segerstrom family, which

shares Ikea’s Swedish heritage.

The furniture store would best its Tustin location -- which would then

close -- by displaying twice the merchandise, have wider aisles and a

bigger child-care facility, Collins said.

In the letter, Huston stated Ikea’s proposed move to Costa Mesa is

within the same market area as its current location in Tustin. Huston

said Tustin could be entitled to half of the annual sales tax generated

by Ikea for the next 10 years after its relocation according to a

government code prohibiting neighboring cities from trying to steal

companies away from each other.

Under the government code, Costa Mesa is restricted from offering any

financial assistance, including payment or forgiveness of fees, any

appropriations of public funds, loans, grants or subsidies, or any tax

incentives, the letter said.

* Lolita Harper covers Costa Mesa. She may be reached at (949)

574-4275 or by e-mail at o7 [email protected] .