Restaurants, Shopping Drive Sales Tax Revenue for Malibu

Eating, drinking and shopping locally pays off for the City of Malibu. That’s the story the city’s report on sales tax revenue seems to tell, as numerous restaurants and retailers topped the list of top sales tax revenue-earners for the City of Malibu during the 2012- 2013 fiscal year. 

Destination dining spots Nobu, Cafe Habana, Moonshadows, Duke’s and Geoffrey’s were among 10 total restaurants listed in the top 25 earners. Since reopening at its new beachfront location last year, Nobu has become one of Malibu’s most popular dinner spots, notorious for its nighttime crowd. 

“Anytime you have a new restaurant like Nobu that opens up, the quality of food and many other factors will dictate how well that restaurant is going to do,” City Manager Jim Thorsen said Tuesday in a telephone interview. “Obviously Nobu and several of our other restaurants have done well in the last year. I’m guessing that is a sign of increased use by our residents as well as visitors.” 

The list of top earners was provided in an audit report prepared for the City of Malibu by HdL Companies, a sales tax auditing company. 

“It’s good news for the city… Clearly the tourist areas like Malibu do better when it comes to travel spending,” said Michael Shires, a local government and economics expert at Pepperdine University’s School of Public Policy. 

Malibu collected $2.82 million in local sales tax revenue, marking unexpectedly positive returns. Assistant City Manager Reva Feldman initially projected $2.63 in sales tax revenue when putting together the budget. 

“We had a really, really good year,” Feldman said at a recent Administration and Finance Subcommittee meeting. 

The city earns one percent—or one penny out of every dollar—in sales tax collected by each business in Malibu, according to Feldman. 

This was the second year in a row when actual revenues exceeded expected revenues. In 2011-2012, the city collected $2.54 million in sales tax revenue. Feldman had projected $2.45 in revenue. 

Sales tax revenue is taken from 893 total businesses in Malibu, according to Feldman. The city declined to release exact figures or rankings of sales tax revenue brought in by each business, deeming it proprietary information. 

Malibu is an anomaly compared to other cities collecting big revenue, Shires said, because it has no car dealerships or major seaside hotels. 

“Malibu doesn’t have any of the big-box retail like auto retailers that drive [revenue] in other jurisdictions. It really is kind of a local tourist economy,” Shires said. 

Other top earners included each of the city’s grocery stores, Pavilions and Ralphs, along with drugstore CVS and each of the gas stations dotting Pacific Coast Highway. Clothing retailers James Perse, Kitson and Planet Blue also made the top 25 list, which was listed alphabetically in the audit report. 

Some unexpected inclusions on the list include Jakks Pacific, a toy company with an office nestled above KFC, and Nobu near the Malibu Pier, and HRL Laboratories, located above the Civic Center. 

During the fourth quarter alone, a breakdown of revenues showed that restaurants offering a full bar eclipsed all other businesses when it came to sales tax earnings. Restaurants selling liquor brought in $219,000 in sales tax to the city during the fourth quarter, nearly three times as much as the next-highest earner, gas stations, which brought in nearly $83,000. Other high-valued categories included family apparel ($80,000) and grocery stores selling liquor ($41,500). 

The Malibu Times is the first newspaper in Malibu, serving the community since 1946.

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