Anaheim may give chamber $425,000 contract to help attract, expand businesses

by in News

Anaheim’s relationship to the city’s chamber of commerce was off during the last years of the former mayor’s tenure, but if a proposed one-year $425,000 contract is an indication, things are definitely on again.

The City Council is expected to vote tonight, June 4, on whether to hire the Anaheim Chamber of Commerce to market the city as a place to start or expand a business or find a job, and to help businesses take advantage of a federal tax incentive program to encourage business investment.

In at least four of the last 10 years, the city’s contract with the chamber didn’t exceed $200,000 annually.  However, in 2012, the city pledged to pay the chamber increasing amounts over five years, topping out at $520,000 in the fifth year, to promote a state program that offered businesses tax incentives for hiring low-income workers. The state ultimately canceled the program, and Anaheim later phased out the deal.

Along with familiar line items such as marketing and hosting a job fair, an economic development conference and the State of the City, officials said what’s new in the proposed contract is that the chamber would administer the “opportunity zone” program, which was created by the 2017 federal tax cut bill. City spokesman Mike Lyster likened the opportunity zones to the canceled state program.

“I’m looking to resume the longstanding partnership the city has had with the chamber,” Mayor Harry Sidhu said in a statement on Monday, June 3. “This is an investment that will keep and expand business here, which in turn will help us serve residents and invest in neighborhoods.”

Chamber President Todd Ament said he’s excited to resume the organization’s past relationship with Anaheim, and he noted that past successes include a job fair that hosted more than 200 employers and resulted in 3,000 hirings when the city’s unemployment was at a high of 12.4 percent.

The city has its own economic development staff, Lyster said, but it is handling large projects such as development in the Platinum Triangle and could use outside help. Regarding the opportunity zone program, Lyster said the chamber may in some cases be a more effective go-between with businesses. Ament said he expected the chamber to hire four additional people to help with the contracted work.

Past contracts don’t appear to have required specific results or outcomes, such as a number of new businesses attracted or jobs created, but some did include how much the city was paying toward events and programs. The 2015 agreement, for instance, spells out $35,000 to support the Taste of Anaheim, $35,000 for a business awards luncheon and $25,000 for marketing to chamber members and residents.

The new proposed contract doesn’t separate out costs for individual items, and it doesn’t require progress reports or other followup. Lyster said the events and marketing services named in the contract are considered the “deliverables,” or work product, and “it’s my understanding the chamber will report back to all of us on their achievements.”

Former Mayor Tom Tait, who voted against a chamber contract in 2015, said he felt the city was being asked to sponsor events and programs the chamber would hold anyway, including some that serve as chamber fundraisers.

“If you’re going to give away that kind of money, I thought – and it was a lot less when I voted against it – that there needs to be deliverables,” Tait said. “There was no accountability for anything in the contract that I opposed.”

Councilman Jose Moreno said he questions the need for renewing the chamber contract, noting that in the years when the city didn’t have one, “economic development continued to grow.”

If the city has $425,000 that’s not needed for other things, Moreno said it ought to be spent to hire park rangers, pave streets or otherwise directly benefit residents.

“Usually you want to spend your money where there’s a necessity, and I don’t see this as a deep necessity,” he said.

Also absent from the new proposal is a clause from past contracts that said none of the city’s money could be spent on political campaigns for or against candidates or ballot measures. Lyster and Ament both said it’s clear from the proposed contract how the city’s money is to be used and political purposes aren’t included.

Councilman Trevor O’Neil said the new contract represents a reinvestment.

And as a past chairman of the Orange Chamber of Commerce, he added, “I understand that a strong and active chamber helps support a strong and robust local economy.”