Mitsubishi of Long Beach Moves to Cerritos; Loss of 4th District Traffic Circle Auto Dealership Is Blow To Sales Tax Revenue For City's General Fund; UPDATED: With Reaction from Councilman O'Donnell & Election Challenger Supernaw

LBReport.com is told that the move was basically a business decision by it and its landlord and the location may not remain an auto dealership and will instead become some non-auto retail use.

Auto dealerships are highly prized, large retail sales tax generators, and LB City Hall has made efforts (including rebating some tax revenue and other inducements) in efforts to retain other dealerships. The loss of several LB auto dealers (to Signal Hill) under previous administrations decades ago proved extremely costly to LB City Hall.

The 4th district Traffic Circle area remains home to three other car dealerships.

UPDATE: LBReport.com requested and received comment from Councilman Patrick O'Donnell [seeking a third term on the City Council on June 5]:

As the leases for auto dealerships along the Traffic Circle have come up, I along with city staff have reached out to them to ensure they stay in Long Beach and are supported by our city. My strategy has worked.

We have worked with the Audi, Porsche, and the Toyota Dealer to ensure they did not leave Long Beach. Our aggressive efforts have worked and these tax revenue and job producing businesses were able stay open in Long Beach. Further, they have a commitment to our city long-term and two of them have undergone significant upgrades and modernization.

We tried the same aggressive strategy with the Mitsubishi Dealership. We were told the dealership...was to be folded into an existing dealer. This was a corporate business decision that I and others worked hard to overturn. Despite our efforts, the interest in continuing the operations just did not exist. Further, the landlord decided to move-on to other business opportunities as well. We cannot override corporate business decisions but we can do everything in our ability to influence them and to make businesses know they are welcome in our city. We will now welcome the new businesses along the Traffic Circle.

LBReport.com also requested and received comment from Daryl Supernaw, who finished first in an April 10 initial election for the 4th district Council seat and is now in a June 5, 2012 runoff with incumbent Councilman O'Donnell:

The departure of Mitsubishi of Long Beach is sad news for Long Beach and particularly for the 4th district. Not only do we have the loss of sales tax revenue and jobs, but the location was the original home of Circle Porsche and has been an auto dealership for over 40 years. The circle area was also once home to a Lincoln Mercury dealership, a Nissan dealership and Circle Volkswagen.

I believe this illustrates the fact that simply offering tax incentives will not provide long-term retention of businesses. Retailers want to locate in a well-run city where they can be assured municipal services will be provided well into the future. The loss of yet another auto dealership also points out the need for Long Beach to elect councilmembers with business acumen and negotiations experience.