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RETAIL AND RESTAURANTS In 2005, retail sales in Pasadena totaled $2,168,000,000. In July, LAEDC predicted retail sales would diminish by about 1 % in 2008 when measured against personal income growth. Current figures put the percentage drop between 2% and 3%. For sales of high priced items, such as automobiles, that drop could be significantly more severe. According to US Census figures, single retail stores average approximately $307,000 in annual sales per location nationwide, while office tenants, on average, generate $337,000 in revenue. That $307,000 from each local business in gross sales returns $3,070 to the City General Fund as the local return on sales tax. (NOTE: Local sales tax return is .0075 x purchase price, plus another .0025 in state return of sales tax to the city for a total of .01 x purchase price.) As we have seen, conditions in the economy, the stability of financial markets and consumer confidence each can have a significant impact on retail sales. For generations, Pasadena has thrived on a diverse economy. The most recent General Plan envisioned corporate headquarters and office uses, thriving retail and restaurant districts, top educational institutions and healthy neighborhoods served by easily accessible shopping areas and comprehensive city services. As the economy has changed, and state funding formulas for municipalities were revised so that property taxes now fund school districts, larger portions of sales tax revenues backfilled losses to city coffers. as the state's emphasis shifted from corporate interests to retail and entertainment. OFFICE SPACE Of the 110,000 workers in Pasadena each day, most are employed in a commercial office environment. This is a "clean" industry that is growing "greener" as the City's office buildings are becoming more energy efficient. Commercial office buildings have little negative impact on the community or the environment yet return tremendous benefits in economic activity. Renovation and growth of the commercial sector are necessary for Pasadena's future to remain positive. Current economic conditions and the changing marketplace mean Pasadena must carefully consider the health of its economy. The City needs to formulate policies and consider corrective measures to sustain the economy and maintain an beneficial level of future office and retail space development. The City also needs to consider instituting flexibility to adapt to market conditions, regulatory changes and working environments. Following Pasadena's General Plan, commercial development is targeted for areas separate from neighborhoods, where traffic can be minimized and where public transportation, when mature, can serve to carry workers and customers. The City's General Plan and zoning code already include effective protections for Pasadena's residential neighborhoods. For example, current standards target commercial development in areas that will not increase traffic in residential areas, allocate land use in ways that provide