SAY NO TO OUTDOORS RETAIL SUBSIDIES

Don't feed big-box bears; they'll only want more


by Patrick McIlheran
Journal Sentinel
Sep. 17, 2005

Wisconsin has 15,057 fishful lakes and a camo-colored culture every fall.
So why does a county have to pay a merchant of deer rifles and fishing rods to move here?

"Large corporations today don't just plant themselves in a community. They form public partnerships," says Donald H. Roskopf, a member of the Washington County Board who, after reluctance, backed a plan to borrow $4 million, offer it to Cabela's Inc. to build one of its outdoors equipment stores and repay the bond using the county sales tax on the store's customers. The board approved the plan last week.

It's more than a store, say supporters. Costing about $50 million and drawing up to 4 million customers a year, four in 10 of them from out of state, Cabela's will induce businessmen to build gas stations, restaurants, maybe a hotel nearby, say supporters. Besides, with museum-quality fish and wildlife displays planned, they expect a really cool store.
No one denies that.The experts call this "cult retail."

"Their stores are spectacular; I'll grant you that," says James B. Esselmann, also on the County Board.
But remember why people will drive long distances to Cabela's. It's to buy. Remember why the company puts in spectacular displays. It shows them off to school tours with unimpeachable goodwill, but the main point is to attract customers. Hundreds of craftsmen will build the store, and hundreds more people will staff it. But in the end, it's going up because Cabela's expects to make good money.

It should. The site, at U.S. Highways 41 and 45 and state Highway 145, is a key junction in one of the fastest-growing counties in the state. Roskopf got the impression, he says, that "this is the only location they're interested in." Washington County is not starved for growth. The usual argument for diverting future taxes toward luring a business is that, but for such intervention, the growth wouldn't happen. That seems scarcely to fit here. Attractive projects could be drawn without county concessions.

Even towns full of desirable customers offer tax incentives, says Rachel Weber, who teaches urban planning at the University of Illinois at Chicago. "They think they can get more," she says. So, as Washington County wants Cabela's specifically, it pays.
And while there is some risk, that seems small given Cabela's success. As long as the sales tax money comes in, not a dime of the $4 million need come from property-tax payers.

So what's not to like about the deal? I say there are three good reasons not to like it.

First, there's that risk. The bonds are to be repaid over 15 years, and retail success is likely, not certain. Cabela's, after all, runs a big catalog and Internet operation and is under no obligation to the county if store sales weaken and tax revenue falls short. In contrast, revenue from development that happens naturally need not come tied to county debt.
Second, there's the sales tax. Imposed in 1999, it vanishes unless the board votes next April to keep it. With it committed to repaying bonds, what are the chances the tax will go away? And while Cabela's means more revenue for the county, whether that's good depends on what's done with the money. Only 15% of sales tax revenue this year goes to property tax relief, its original purpose. Instead, as one official noted, the available money just encourages people to dream up new ways to spend it.

Third, the deal encourages two disagreeable tendencies: that of companies to sponge off the public and that of officials to meddle. Cabela's openly says it puts stores where it can get governments to help pay for them - "a public-private partnership," as a company official put it. It isn't alone. "The big box (retailers) just know that this is a common practice and that they'd be just silly not to ask for some form of public assistance," says Weber. And cities feel compelled to meddle lest the good stores all go elsewhere. "But where do we draw the line?" asks Esselmann. He cites a businessman who's planning a restaurant in Washington County - and who validly wonders why he's not getting a special deal. I have my own views on Pottery Barn vs. Farm and Fleet and would rather that government stay out of it.

The matter is in Cabela's hands: A spokesman says the chain could decide within a week whether to take the deal. I'd say Washington County should spend the time practicing the word "no," something it's in a good position to say - if not for this deal, certainly for the many importunities to follow.