SAY NO TO OUTDOORS RETAIL SUBSIDIES

http://www.cdapress.com/articles/2006/03/01/news/news02.txt
How much should we bend for Cabela's?


By BRIAN WALKER
Staff writer

Report: Outfitter strategically pits bordering states against each other, saturates market

POST FALLS -- A recent study alleging how Cabela's likes to pit bordering states against each other to lure the outdoor outfitter giant and how its aggressive expansion plans are saturating the market is making some local officials reevaluate how much they'll bend at taxpayers' expense.

But they also have to consider the study's source -- an affiliate of Cabela's competitor Gander Mountain.

"Leveling the Playing Field: Making the case for limiting government incentives for retail development" was released last fall by Ewald Consulting of St. Paul, Minn.

As it states in the second paragraph of the report, Ewald works with the developer for Gander Mountain.

Sidney, Neb.-based Cabela's is considering Post Falls and Liberty Lake for one of its "destination" retail stores. Legislative efforts are launched in both states that would give the company tax incentive.

"Somebody needed to make a case for what's going on in support of public policy," said David Ewald, president of Ewald Consulting, of the report. "With a profitable company like Cabela's, why does a state need to provide that much to substantiate attracting a company to a community where it will make a profit.

"In a place like North Idaho, where there's a lot of people who hunt, camp and fish, why would you have to pay them to come? Why put the money into a retail store when there's education and transportation?"

The report has made even Post Falls Mayor Clay Larkin, a staunch supporter of economic development, take a different look at luring Cabela's.

"While it would be nice to have them here, at what price?" Larkin said. "It's made me re-evaluate how important it is to the taxpayers of the use of their money. If they do decide to come here, it should be with the same courtesy as any other business coming here but nothing more."

A bill in Idaho would help fund an Interstate-90 interchange estimated to cost $10 million to $15 million for Cabela's at Beck Road in Post Falls. Cabela's would be reimbursed for 75 percent of the cost through returned sales tax money.

"It is not an appropriate role for state and local governments to favor one retailer over another by awarding subsidies," the report states.

Cabela's plans to open a Boise store without a tax incentive.

"That certainly will not sit well up here," Larkin said.

Liberty Lake officials, who received a copy of the report along with Larkin, and Cabela's spokesman David Draper couldn't be reached for comment.

The report re-printed several 2005 newspaper articles questioning using taxpayer money to subsidize a for-profit company to lower its costs on a retail project. It argues that the 150 to 200 jobs the company creates at each store isn't enough to offset the upfront state money used to attract it.

Larkin said if Cabela's wants to come to Post Falls, it will find out a way to do it on its own.

"It's happened in other places," Larkin said.

Larkin said the report is "the rest of the story" on Cabela's and is just something to consider.

"It reinforces not spending public tax money to support for-profit businesses," he said.

Post Falls has remained steadfast in continuing to ask for-profit Ironman for additional expenses it incurs during the popular June triathlon.

Larkin said bending over backward for Cabela's wouldn't send a good message to existing local outdoor outfitters such as Fins and Feathers and Black Sheep.

"Those companies didn't receive any special help," he said.

A map in the report shows the current and future locations of Cabela's and how many are on the border of two states, suggesting a showdown between two governments to attract the company.

It appears that's what is going on here, Ewald said.

The map also infers that the company is saturating the market and asks, "Is Cabela's really a destination or is it just a retail chain?"

"Each additional store diminishes the tourism attractiveness of its predecessor," the report states.

Ewald said St. Paul-based Gander Mountain, which has 98 stores in 18 states, typically looks to move into an existing building in its new locations before building a new one.

"It's a company that doesn't go around the country with its hands out to give it millions of dollars in tax-increment financing," Ewald said.

Shannon Burns, Gander's director of investor relations, said the company doesn't discuss its possible future locations. It hasn't expanded into the Northwest.

"We're talking about having as many as 300 stores, and certainly Idaho has the kind of market that would be attractive for Gander Mountain, but I can't say more than that," Burns said.