Salinas and Marina hope to revive their economies, while big ag looks for answers on E. coli.

The city of Salinas will take an economic leap of faith this new year. If the city doesn’t expand its tax base within three years, it will face a deficit and have to cut services – once again. “We are in a race against that three-year clock,” says Mayor Dennis Donohue.

Salinas will try to attract retailers like Trader Joe’s and Crate and Barrel and high-tech ag firms to fill the financial gap. The city also will work to annex 3,350 acres for future growth, but Salinas may not see the windfall from this housing boon in time. Plus, the more residents Salinas gains, the more services it will have to provide, so it’s not clear how much the city will benefit. Donohue says the city needs a big economic success to stimulate investment in the Salad Bowl. We predict the city will fall short of that goal.

The long-awaited Oldtown hotel project will start wading its way through environmental review. Chinatown revitalization will wait for a developer. Alisal Marketplace, a housing and retail development in East Salinas, will start jumping through the hoops of relocating businesses and refining the project’s design.

Salinas won’t be the only city crossing its fingers and hoping for new construction. Marina has approved three large housing developments on the former Fort Ord and is poised to become the county’s second-largest city, after Salinas. Early this year the City Council will approve its fourth major development, Marina Station, a mixed-use project proposed by Creekbridge. Count on it.

But the downturn of the real estate market may stop new homes from being built in ’08. Marina Community Partners, developers of The Dunes, will delay building homes until the market improves. The developers of Marina Heights, which the city approved in 2004, will continue to take their time getting homes built. In other words, this won’t be the year Marina and the rest of the county recover from the closure of Fort Ord.

While developers and cities aren’t happy about the housing downturn, some homebuyers could cash in this year. Home prices in Monterey County are expected to drop 8 percent by the end of the year, according to Moody’s Economy.com. With more than 2,600 homes listed in November, this is what real estate folk call a buyer’s market. But taking 8 percent off a $600,000 home – and that’s cheap in these parts – doesn’t help most people. And good luck getting a mortgage.

Unscrupulous lenders who gave out stated-income, no-document loans jumbled the economy and caused record numbers of foreclosures across the nation, including Monterey County. With additional low-mortgage payment periods expected to expire, more county families could lose, instead of buy, their first home in 2008.

But perhaps the biggest monetary question this year is whether another E. coli outbreak in leafy greens will further damage Monterey County’s $3.5 billion ag industry. Salinas Valley growers, remembering the 2006 E. coli outbreak in spinach, will push for better science on how the deadly bacterium contaminates crops. Until they have those answers, growers will continue to put up fences, rip out vegetation and use more rodenticides to keep out wildlife.

Small organic farmers hope the now-voluntary agricultural practices don’t become mandatory this year. Farmers say this could derail their conservation practices and backlog them with bookkeeping they can’t afford.