Monday, August 13, 2012

Bass Pro - and con on government subsidies for retailers

Posted By on Mon, Aug 13, 2012 at 12:40 PM

FREE LUNCH: If Bass Pro builds in Otter Creek without taxpayer subsidy, it would be unusual for the retail chain.
  • FREE LUNCH: If Bass Pro builds in Otter Creek without taxpayer subsidy, it would be unusual for the retail chain.

George Waldon in Arkansas Business checks in this week with Tommy Hodges on his long quest to develop a major retail project in Otter Creek. He says he's still on target for a fall closing with Bass Pro Shops to build one of its major retail shops as an anchor for other projects, including a high-end outlet mall.

Waldon notes, as our original announcement of the project did, that Bass Pro is promising to build without government subsidies it had sought previously for a location in North Little Rock and which it has used throughout the country.

I wish Hodges nothing but the best because of his hard labor. Bass Pro — or Cabela's or any other big sporting good chain — is more than welcome here. Just so long as they aren't given taxpayer-financed advantages over other businesses.

I confess I remain wary. There's one obvious reason — a trojan horse of a constitutional amendment referred to voters by the legislature. It wraps into a fix for local police and fire pension systems a new means of taxpayer subsidies for retail developments. It would allow city and county sales taxes to be captured for an "economic development" project — anything that has jobs attached. Looks to me like cities and counties would be on the hook if taxes fell short. I don't think elections are required to parcel off this money to private developers. It looks to me like nothing but another effort to find a way for taxpayers to finance retail projects. That was the aim of the Tax Increment Finance scheme, but it foundered when courts wouldn't let them steal sufficient school property tax revenue.

I'm fired up about this all over again because of this absolutely sparkling article in The Atlantic about how Bass Pro and Cabela's have gotten into the pockets of taxpayers nationwide for BILLIONS in subsidies for retail stores that don't create new jobs and harm existing businesses. Read this article. Please. South Carolina Gov. Mark Sanford, no liberal, expressed clearly in his fight of giveaways to Cabela's why this is a bad idea.

"We don’t think it makes sense for the any number of family-owned and smaller businesses that have been paying taxes in South Carolina for a long time to now be called on to subsidize a loss in their sales," Sanford wrote in a letter to dozens of outdoor sporting goods stores. "I would appreciate you making your voice heard if you think this proposal should not stand."

Sanford also sent letters with a similar message to the Cabela’s CEO. Eventually, the retailer backed away from building in South Carolina.

There's so much more. The chains have gotten subsidies for stuffed animal displays and aquariums under the theory they qualify as museums. Where the public has helped pay for facilities, used gun showrooms have been termed "gun libraries" to justify public ownership. When public land and facilities are used (and a huge state natural area is supposed to be part of the Bass Pro draw in Little Rock) they are tax-exempt. Infrastructure improvements (the Bass Pro is going to need some highway work) cost money.

An exhaustive investigation conducted by the Franklin Center for Government and Public Integrity found that the two competing firms together have received or are promised more than $2.2 billion from American taxpayers over the past 15 years.

"Retail is not economic development. People don’t suddenly have more money to spend on hip waders because a new Bass Pro or Cabela’s comes to town," says Greg Leroy, executive director of Good Jobs First, a non-partisan economic development watchdog group based in Washington, D.C. "All that happens is that money spent at local mom and pop retailers shifts to these big box retailers. When government gives these big box stores tax dollars, they are effectively picking who the winners and losers are going to be."

Numbers don’t always tell the whole story, counters Larry Whitely, a spokesman for Bass Pro Shops, a privately held company based in Springfield, Missouri. Whitley argues the stores should be viewed as an amenity being added to a community — much like one might view a park or a library.

If these truly were public amenities, the public would share in the profits. That is not part of the Bass Pro or Cabela formula, you may be sure.

I'd watch carefully as this unfolds. We don't want to end up like Buda, Texas, which spent $60 million to get a Cabela's, enough to buy a Lexus for every resident in the 7,600-person community.

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