Leader of business group explores secession of New Encinitas from city

The leader of a business group thinks New Encinitas is getting the short end of the economic stick. So he’s looking into the community breaking away from the city.

Mike Andreen, owner of the New Encinitas Network, said New Encinitas generates much of the city’s tax revenue, but he maintains most of those dollars go to projects outside the community.

“Currently, New Encinitas is suffering from taxation without representation,” Andreen said.

But the idea of secession was met with skepticism from a council member, the head of another business group and the executive officer of an agency that oversees local borders.

Andreen said during a New Encinitas Network luncheon last week, seven of the group’s 22 members were in attendance and directed him to explore secession. He plans to share the reasons for potentially breaking away in a letter that will soon be sent to the Encinitas City Council.

Andreen said with the city’s upcoming budget taking shape, he’s concerned that funding will primarily go toward projects west of Interstate 5, such as the Leucadia Streetscape, a plan to revamp the area’s Coast Highway 101 corridor. He fears that New Encinitas projects like turf and field lighting for Leo Mullen Sports Park could be shortchanged.

Councilman Tony Kranz said the council isn’t ignoring New Encinitas. The budget includes road maintenance funds for New Encinitas, and the council is exploring funding the Leo Mullen Sports Park improvements, he stated.

Kranz acknowledged that some of the larger projects in the preliminary budget are along Coast Highway 101. He said that’s because some of the infrastructure there is old and badly in need of upgrades.

He doubts there’s an appetite among New Encinitas residents for breaking away.

“I think they enjoy being a part of this larger city,” Kranz said.

Andreen said he’s also investigating secession because a council majority of Kranz, Lisa Shaffer and Catherine Blakespear vehemently support biking and walking projects, at the expense of infrastructure for commuter roads that are key for business.

He added the council majority is “at war with the gasoline combustion engine.”

In response, Kranz said he’s not anti-car, but rather in favor of “complete streets” that make room for biking, walking and driving.

“I’m not trying to force anyone to ride a bike,” Kranz said. “If they have a car and want to drive it …that’s great.”

New Encinitas is one of the city’s five communities, with the others being Leucadia, Old Encinitas, Cardiff and Olivenhain. It runs from Via Cantebria to the west and Rancho Santa Fe Road to the east, according to city documents. The commercial El Camino Real corridor bisects the community.

Andreen said secession might strike some as “out there,” but he drew parallels to the city’s 1986 incorporation. It won at the polls because residents wanted a greater say over development and spending priorities.

“People’s initial reaction to the word ‘secession’ may be to stop and laugh, but it occurred successfully 29 years ago,” Andreen said of incorporation. “There was a reason for it. Just as there may be a reason today.”

Michael Ott is the executive officer of the Local Agency Formation Commission (LAFCO), an organization that oversees changes to local government boundaries.

He said breaking away from a city is much more challenging than transforming an unincorporated area into a new city, which was the case for Encinitas in 1986.

To set the wheels in motion for secession, 25 percent of residents in New Encinitas would have to sign a petition supporting the idea. LAFCO, which would have to sign off, would look closely at the fiscal impacts. Also, a communitywide ballot measure in favor of breaking away would need a majority to pass, followed by a citywide vote, according to Ott.

“It sounds highly unlikely,” Ott said.

In the coming weeks, Andreen said he’ll contact more residents and business owners to see whether they’re interested in the idea. If many are in favor, the next step would be to determine just how this new area would be regulated and the exact boundaries, he stated.

City reports give a rough idea of how much each community contributes to the city’s sales and property tax revenues. As one indicator, the most recent city sales tax report showed the Encinitas Ranch shopping complex in New Encinitas was the top sales tax producer among 10 business clusters in the city. From July to September 2014, the complex generated $610,000 in sales tax revenue.

Another cluster called northwest El Camino Real businesses — also in New Encinitas — came in second, with downtown Encinitas in third.

Encinitas Chamber of Commerce CEO Bob Gattinella said he hadn’t heard any interest among residents or businesses in breaking away.

“I’d venture to say it’s only a handful of property owners that are really interested,” Gattinella said. “I don’t see this getting a lot of traction.”

He also said it’s one thing to want more dollars to flow to New Encinitas, but secession is something else entirely.

“If we want to move Encinitas forward, if anything the communities should work together more closely.”

Jim Schmedding, who manages a local business park and belongs to the New Encinitas Network, said the city has been focused on other communities, even though New Encinitas is the city’s economic engine.

“It doesn’t hurt to ask questions about this idea,” Schmedding said.