A motion to extend a lease agreement with Worthington Ford, Inc. for the land that houses its electronic display off the 405 Freeway was pulled by the Long Beach City Council agenda Tuesday night. It will most likely be moved to an August hearing.
If approved, the agreement would extend Worthington’s control of the land located south of the Lakewood Boulevard exit through September 2030, including an option to continue until September 2035.
The motion would also enter the city into a tax incentive agreement with Worthington to help offset the costs of planned upgrades to the signage.
Fifth District Councilwoman Stacy Mungo said the deal was moved because it required a public hearing, due to it involving tax sharing implications.
Tuesday’s agenda included a lengthy hearing involving applicants and opponents of proposed modifications at the existing Mitsubishi cement facility at the Port. The hearing and public comment lasted over three hours prior to the resuming of the regular agenda.
The sign, which has become synonymous with Long Beach for those headed South on the 405, is scheduled to undergo a facelift that would change its current configuration to a v-shape to improve visibility as well as rebranding its header to “Worthington Ford” from “Cal Worthington." Under the agreement, Worthington would assume the up front cost of the upgrades which tops $675,000 and continue to rent the 3.24 acre property for $1 per month, but has requested that the city help mitigate half that figure by entering into a retail sales tax sharing agreement.
The city currently holds rights to 20 percent of the display time on the sign of which it can promote community events, an estimated value of between $190,000 to $240,000 per year, according to an economic consultant for the city. If Worthington chooses to extend to 2035, that could translate to over $3 million in “free” advertising rights for the city.
These incurred benefits, along with increased sales tax revenue, justify the low monthly rent to the dealership, according to a city staff memo.
It was also estimated that during that same time frame, sales volume at the dealership could increase by six percent because of the modernization of the sign, which at current sales tax value, would equal over $860,000 in additional funds for the city.
The city would have the option of opting out of the tax sharing agreement after it meets its $339,476 share of the renovation, or a maximum of 15 years. It’s expected that the renovations to the sign will help keep the dealership competitive and maintain some 160 jobs provided by its operations in the city, one that is expected to grow during the term of the agreement.