By Jorge Casuso

March 9 -- Santa Monica’s economy seems to be bouncing back, with sales tax revenues in the third quarter of last year marking the greatest quarter increase since 9/11, according to figures released by the City last week.

The 7.5 percent hike over the third quarter of 2002 follows smaller increases in the first and second quarters last year and was greater that the 5.7 percent increase posted by the County and the 3.2 percent rise posted by the State.

Santa Monica’s sales hike is largely due to a surprisingly strong showing by auto dealers, the opening of a number of new businesses and a rise in restaurant sales, City officials said.

“It’s all good news, that’s for sure,” said Finance Director Stave Stark. “This may mean we may be in for a long-term growth in the economy. Economists predicted a long, slow growth, and that’s that we’re experiencing.”

“It’s a general trend,” said City Treasurer Dave Carr. “We’re seeing the economy improve. I think overall, things have been picking up.”

The fourth quarter sales tax figures, which will be released next month, “will indicate if we have a true change in the economic outlook,” Stark said.

Auto dealers -- which saw a 27.5 percent increase in sales tax revenues -- provided the key economic engine driving the apparent recovery.

“I think the big story, really, is the new car sales,” Carr said. “They continue to astound… Auto sales have continued to be strong, especially in the luxury end.

“It’s been surprising,” Carr said. “I think it’s been a trend not just in Santa Monica, but probably throughout the country. But Santa Monica has been particularly high.”

Auto dealers attributed the increase in part to auto maker incentives.

“The factories are playing fast and loose with incentive money to stoke car sales,” said Bill Rehwald, an owner of W.I. Simonson Mercedes Benz.

Simonson posted $165 million in sales last year, making it one of the top 100 dealers in U.S. sales, Rehwald said. As a result, the City netted more than $1 million in sales tax revenues paid by the company.

“I attribute (the sales increase) in part to the expansion the City allowed us to do in 2002,” Rehwald said, adding that City officials should make it easier for auto dealers to expand when they begin looking at design standards for the industry next month.

“We will return those benefits back to the City” in increased revenues, Rehwald said.

New restaurant openings in Santa Monica have also contributed to the general increase in sales tax revenues, Carr said. “There have been more new ones that have opened that are doing very well,” he said.

The biggest hike in taxable restaurant sales took place Downtown, where food and liquor sales were up 22 percent. Restaurants outside the Third Street Promenade accounted for a 48.6 percent hike in the third quarter, as newer establishments such as Houston’s gained a foothold, Bayside District officials said.

“We are really seeing the restaurants off he Promenade becoming well established, and we hope that will spur the pedestrian traffic outside the Promenade,” said Kathleen Rawson, the Bayside District’s executive director.

Restaurant sales on the Promenade held steady, showing a 2.7 percent gain in the Third quarter. “On the Promenade it was business as usual, which is great in this business climate,” Rawson said.

The Bayside led the City’s four business districts in general sales, with the Promenade posting an 11.8 increase in the third quarter of last year.

Downtown businesses off the thriving strip did even better, posting a 30.8 percent jump, thanks in large part to six new businesses that accounted for about 90 percent of the increase, Carr said. The increase, however, may have included payments due from previous quarters, Carr said.

Santa Monica Place, the indoor mall at the southern end of the Promenade, continued its slump, posting a 2.7 percent decrease in the third quarter.

Ocean Avenue, which is home to hotel row, posted an 8 percent increase, primarily due to a healthy showing by restaurants, Carr said.

Main Street also cashed in on diners, posting an 8 percent increase, the highest among business districts outside the Bayside.

Montana Avenue posed a 2 percent increase, while Pico Boulevard, the city’s newest business district posted an 11.4 percent drop in the third quarter.

“There were some decreases at service stations and the college enrollment was down from what it was,” Carr said.

The lower enrollment at Santa Monica College, which was due to State budget cuts, may have impacted surrounding businesses, as well as those on the campus.

While the third period figures, which were released by the State late this year, further an upward trend in the economy, City officials are eagerly awaiting the fourth quarter sales to gauge the extent of the recovery.

“The fourth quarter will be a very key one,” Carr said.