11-29-2007, 06:22 AM
Oink, Wentzville is just a plain Wal-Mart store, not a super center.
Jeff, I don’t disagree with using subsidies to support economic development. The intent of these subsidies was to enable development that would probably not happen without the subsidies. Example, A Petsmart wanted to build a distribution center but the land was located off the major thoroughfare with no utilities. The cost of infrastructure improvements made the development too expensive for the single distribution center. Government stepped in, building a new road and offering tax credits for utility improvements. Within 4 years, 11 new major industries have developed properties in that area along with residual commercial development. The government was not supporting any single operation but rather sparking continual development through these subsidies.
What occurred with Wal-Mart is they played cities against cities (not very community minded is it?) and had them enter into bidding wars to the point the economic impact may not produce any meaningful return. In some cases, this wasn’t even based on a need, just seeking what amounts to a welfare payment for them. They also realized that if they said no to subsidies for Wal-Mart, if Wal-Mart really wanted the store, they had more than enough money to build it anyway.
But, it’s really a moot point now. Many governments have or are closing the single retail store subsidy. They never intended for any single retail store to profit through taxpayer subsidies, and particularly not when there was no overwhelming need for that development. Many communities have now set minimum standards where retail means a mall not a single store. I’ve found many examples where the subsidies have never materialized in any benefit because the amount could not be recouped with the low tax base produced by discount stores. I’ve even seen where millions were lost when the subsidies ran out and Wal-Mart closed the store and moved away before the city saw any positive return, or could start collecting full taxes once the subsidies ran out.
Jeff, I don’t disagree with using subsidies to support economic development. The intent of these subsidies was to enable development that would probably not happen without the subsidies. Example, A Petsmart wanted to build a distribution center but the land was located off the major thoroughfare with no utilities. The cost of infrastructure improvements made the development too expensive for the single distribution center. Government stepped in, building a new road and offering tax credits for utility improvements. Within 4 years, 11 new major industries have developed properties in that area along with residual commercial development. The government was not supporting any single operation but rather sparking continual development through these subsidies.
What occurred with Wal-Mart is they played cities against cities (not very community minded is it?) and had them enter into bidding wars to the point the economic impact may not produce any meaningful return. In some cases, this wasn’t even based on a need, just seeking what amounts to a welfare payment for them. They also realized that if they said no to subsidies for Wal-Mart, if Wal-Mart really wanted the store, they had more than enough money to build it anyway.
But, it’s really a moot point now. Many governments have or are closing the single retail store subsidy. They never intended for any single retail store to profit through taxpayer subsidies, and particularly not when there was no overwhelming need for that development. Many communities have now set minimum standards where retail means a mall not a single store. I’ve found many examples where the subsidies have never materialized in any benefit because the amount could not be recouped with the low tax base produced by discount stores. I’ve even seen where millions were lost when the subsidies ran out and Wal-Mart closed the store and moved away before the city saw any positive return, or could start collecting full taxes once the subsidies ran out.