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Retail report warns of sales‑tax risk; city urged to reposition Promenade and expand experiential offerings

General Plan Advisory Committee (Temecula) · January 9, 2026

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Summary

City economic development staff presented a Temecula retail overview showing strong sales-per-capita and low vacancy but large leakage in online and certain retail categories; the report recommends tenant‑mix refinement, experience-driven retail and targeted reinvestment in the Promenade and Old Town.

City economic development staff presented findings from a Temecula retail overview (Beacon Economics/HDL) that identified strengths and risks in the city’s retail sector and outlined strategies to protect sales-tax revenue.

Mary Cervantes said Temecula generated roughly $47.4 million in point-of-sale tax revenue in 2024 and has about 8.3 million square feet of retail inventory; Temecula’s sales-per-capita ($419) is double neighboring cities, driven largely by automotive and experiential retail. However, Cervantes said the report found substantial retail leakage — for example, electronic shopping and mail-order showed about a $453 million shortfall, with nearly 89% of that spending leaving the city.

The report highlighted subregional differences: Old Town has lost retail jobs (about a 16% decline), and the Promenade lost stores (17 fewer retailers over five years), while vacancy citywide remains low (~3.6%) and retail rents rose about 14% in the past year. Cervantes recommended focusing on destination retail, specialty food services, more dining and entertainment anchors, and selective infill or repositioning of underperforming malls and centers, with special attention to the Promenade as a regional draw.

Committee members and staff discussed redevelopment tools, available parcels (Temecula Parkway, Jefferson Avenue, Pechanga‑adjacent parcels), and possible private projects near the casino. The city will share the full report and maps for GPAC review ahead of the February land‑use workshop.