Signal Hill is 2.2 square miles carved out of the heart of Long Beach. The city was incorporated in 1924, several years after oil was discovered. Today, a balanced budget and numerous public and private developments are positioning Signal Hill for continued success, according to City Manager Charlie Honeycutt.
Signal Hill City Manager Charlie Honeycutt is pictured outside the historic City Hall building on Hill Street at Cherry Avenue. Honeycutt is proud to proclaim the city, which is home to more than 11,700 residents, is financially stable while maintaining its low-tax status. (Photograph by the Business Journal’s Brandon Richardson)
“The city continues to be very stable. Our financial condition is solid, and we’re projecting an increase in revenues,” Honeycutt said. “We continue to have a sound reserve, and we just adopted our two-year budget – fiscal years 2018-2019 and 2019-2020. Those are structurally balanced budgets, meaning our ongoing expenses are paid for by ongoing revenues and we’re able to fund an extensive capital improvement program.”
The 2018-2019 and 2019-2020 fiscal year general fund budgets are balanced at roughly $22 million each. Sales tax accounts for more than $15 million, or about 68%, of the estimated revenue. Police is the largest general fund expenditure at about 43%, with public works being the second largest at 22%.
Honeycutt is part of the League of California Cities’ City Managers Sales Tax Working Group that is against Senate Constitutional Amendment (SCA) 20, which would alter current law to transfer online sales tax revenue to the point of delivery rather than the point of purchase. For example, if a person or company located in Long Beach purchased items online from Home Depot in Signal Hill, Long Beach would receive the tax revenue. SCA 20 is held in committee and is under submission at the state senate as of August 16.
“SCA 20 would reduce our sales tax revenue [by] 15% to 20%,” Honeycutt said. “The group of city managers is working with the League of California Cities to come up with an alternative, something that may be a little bit more fair.”
In the upcoming March election, the city council seats of Tina Hansen and Larry Forester will be open. The positions of city clerk and city treasurer, which are currently held by Keir Jones and Larry Blunden, respectively, will also be open. According to Honeycutt, Forester, who has been on the council for more than 20 years, has indicated he will not seek reelection.
“It hasn’t been formally announced yet, but Forester has been public about not seeking another term,” Honeycutt said. “He’s proud of his achievements and is ready to let the new generation come in – new energy to lead the city into the future.”
During fiscal years 2019 and 2020, more than $27 million in capital improvements are planned in Signal Hill, including development projects, water operations, street maintenance and repair, environmental mitigation and landscaping.
The city has a new $12 million library under construction adjacent to city hall on East Hill Street. Plans are in the works for a new park on Cherry Avenue south of Mother’s Market. Honeycutt said Signal Hill is working with the City of Long Beach, which owns a piece of property that is likely to become part of the new park. The space is planned as an extension of the city’s trail system and would feature an electronic reader board for residents to view city information and event details.
“All of this with no new taxes. When you come to Signal Hill, you have a built-in competitive advantage because we don’t have utility users tax,” Honeycutt said. “I mean, right off the bat, you’re going to save 5% just on your utility costs alone. Our sales tax is lower than everybody else and the business license fee is very low.”
Retailers in the city are continuing to perform well, with auto dealerships, Costco, Office Depot, Home Depot and In-N-Out Burger among the city’s top sales tax generators, Honeycutt said. He explained that there has been a noticeable shift away from material goods purchases to entertainment and experiences, including food. This shift has caused year-over-year revenue increases to slow, he added.
“I would suspect that our Best Buy will benefit from the closing of the Marina Pacifica store in Long Beach,” Honeycutt said. “We keep a close eye on Best Buy because for a while there we kept hearing about the demise of Best Buy, but our store is pretty consistent.”
Current Signal Hill business owners have indicated that the strong police presence and fast response times are a big draw for the city, Honeycutt said. Last year, Signal Hill recorded one homicide, up from zero in 2016, according to Signal Hill Police Department data. Reported rapes decreased from nine to four, robbery increased from 29 to 33 and aggravated assault increased from 33 to 39. Total property crimes, such as residential and commercial burglary, larceny and shoplifting, vehicle theft and arson, decreased from 85 instances in 2016 to 71 last year.
Though founded as an oil town, tax revenue from oil production only makes up 3% of the city’s general fund revenue. Honeycutt explained that oil revenue has been flat for years, with Signal Hill Petroleum choosing not to drill new wells due to low oil prices. There are permits for 350 wells in the city and 35% are inactive, Scott Charney, community development director for Signal Hill, said. Signal Hill Petroleum operates 83% of the production wells in the city. David Slater, vice president and chief operating officer of Signal Hill Petroleum, said the company will begin drilling new wells this year as a result of higher oil prices.
“We’re down to the last developable properties in the city. The reason they are still vacant is because of the constraints caused by abandoned oil wells, pipelines, contaminated soil – things that are left behind due to our legacy of oil from companies that aren’t around anymore,” Honeycutt said. “It just adds an extra challenge to any developer that wants to come in and do something in Signal Hill.”
Despite challenges, Signal Hill is experiencing a high level of development activity, with a number of projects already completed this year, others currently under construction and more in the pipeline. Projects include retail, a new auto dealership, office and at least 320 single- and multi-family residential units.
One of the most recently completed projects is Zinnia, which consists of 72 fully leased affordable residential units at 1500 E. Hill St. Under Senate Bill 35, which was signed by Gov. Jerry Brown in September of last year, the state determined how much housing each city and county must build in the coming years in order to ease the statewide housing shortage. At the beginning of the year, the state’s housing department released data showing that more than 500 cities and counties are not on track to meeting development requirements for market-rate housing, affordable housing or both. Signal Hill has issued permits to meet 70% of its required housing allocation. The Zinnia project accounts for 100% of Signal Hill’s very-low and low-income housing development requirements.
“We’re only one of seven jurisdictions in the state that has met that allocation,” Charney said. “Even with all the constraints to development we have here in Signal Hill, we’re still following through with our commitment to actually do the best we can to ensure that residential development gets provided.”
Nearly 50 single-family residential homes are under construction or planned between several projects. The Crescent Square development on the northeast corner of Walnut Avenue and Crescent Heights Street consists of 25 three-story homes that are being sold for $1 million, according to Honeycutt.
The City of Signal Hill and the Business Journal prepared the following list of Signal Hill development projects recently completed, underway or planned:
Completed In 2018
• 1136 E. Willow St. – Ten-Mile Brewery is a 3,800-square-foot tap house where the beer is brewed on site. The brewery is owned and operated by Dan and Jesse Sundstrom.
• 1500 E. Spring St. – A Long Beach Honda renovation added 802 square feet of showroom, 262 square feet of office area, 1,300 square feet of service space, and new facade and signage. The developer was The Garff Group.
• 2475 Cherry Avenue – Mother’s Market opened in the former Fresh & Easy market location. The conversion included new facades, along with seating for outdoor dining and a completely renovated interior developed by Signal Hill Petroleum.
• 3100 California Ave. – The City of Signal Hill Dog Park opened in March 2018 and features areas for small and large dogs.
• Zinnia, 1500 E. Hill St. – This fully leased multi-family residential development consists of 72 affordable housing units developed by Meta Housing.
Under Construction
• Crescent Square, northeast corner of Walnut Avenue and Crescent Heights Street – This detached, three-story, single-family, for-sale residential development consists of 25 units developed by Far West Industries.
Conceptual Plans
• 700 E. Spring St. – A mixed-use development is envisioned for the 16-acre site on Spring Street between Atlantic Avenue and California Avenue to 29th Street. The successor agency entered into an exclusive right to negotiate agreement with Vestar LLC. The proposed project would be completed in multiple phases and would include retail, hotels, mixed-use medical and administrative offices, as well as residential uses and open space.
• 1375 E. 23rd St. – This is a proposal for 16 single-family dwellings.
• 2599 Pacific Coast Hwy. – Seven single-family homes are proposed.
• 2650 Cherry Ave. – The city’s successor agency to its former redevelopment agency entered into an exclusive right to negotiate agreement with Signal Hill Properties LLC, also known as the Shelly Group, to develop the Cherry corridor property for a new pre-owned automobile dealership facility. This 3.13-acre site would expand the Signal Hill Auto Center.
• Heritage Square – This proposed mixed-use development on 7.72 acres adjacent to Mother’s Market would consist of retail, restaurant, single- and multi-family residential and open community space. The city’s successor agency entered into an exclusive right to negotiate agreement with Signal Hill Petroleum, Inc.
• Walnut Avenue Corridor – Xebec Realty, as the authorized agent for Signal Hill XC, LLC, is proposing the development of nine industrial buildings totaling 151,075 square feet on eight acres consisting of two vacant sites fronting on Walnut Avenue between Gaviota and Gundry avenues. The property previously housed the ChemOil refinery, and consists of a six-acre parcel on the west side of Walnut Avenue and a two-acre parcel on the east side of Walnut Avenue.
Public Investment
• 1770 E. Hill St. – The development of a new, 12,000-square-foot public library is underway.
• Corner of Burnett Street and Cherry Avenue – View Park, which will take advantage of views of the Long Beach skyline, will include a new digital sign and reader board, as well as benches and a hilltop-walking trail.