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Bass Pro Shops – What the Papers Say

February 19, 2013

This Wednesday, the Hillsborough County Commission is scheduled to vote on the Estuary/Bass Pro Shops deal.  Both the Times and Tribune have weighed in on the issue, and we think their editorials are worth a look.

The Times

The Times published an editorial today opposed to the Estuary/Bass Pro Shops deal. It is well written and points out in more detail flaws in many of the arguments supporters have made in favor of the deal, including that the low paying jobs are a good deal, that Bass Pro Shops gets no benefit, and that the proposed road improvements actually help the general public.  You should read it here. .

The Tribune

On Sunday, the Tribune published an editorial in support of the deal.    We thought it might be useful to go through the entire editorial and its arguments, particularly in light of the Tribune’s own reporting:

It will be easy for Hillsborough County commissioners to vote no Wednesday when they are scheduled to decide the fate of a controversial development deal that would bring Bass Pro Shops here.

The issue has been framed as a public giveaway to a mammoth corporation that will smother existing small businesses. Activists have launched a petition drive to halt the project. It’s become a cause célèbre.

It has been framed as a giveaway namely because it is a giveaway.  Per an article from the Tribune on Monday, “Most experts interviewed said a Bass Pro Shop will likely hurt existing businesses, even causing some that are nearest to the megastore to close.” . . .and “’Then you’ve got this loss of the circulation of dollars and all the jobs supported by local retailers,’ she said. ‘At the end of the day you end up with a negative impact on the local economy. That you would spend $6 million to achieve that is pretty shocking.’”   In other words, it is questionable whether it is a net positive deserving of public money.  The editorial continues:

But commissioners would be short-sighted to take the populist stance.

The 150,000-square-foot Bass Pro proposed for the Brandon development is a destination retail facility that would attract outdoor enthusiasts from miles around.

(We’ll just skip the gratuitous and inaccurate “populist” comment.) Yes, miles around . . . but how many miles? According to the Tribune, Bass Pro Shops itself tells us that shoppers are not drawn from that far away, but we’ll get to that a little ways down.

The county is being asked to reimburse the developer $6.25 million for work it would do to improve roads — widening Faulkenburg [sic] Road and extending Palm River Road — that would serve The Estuary development project that is to include Bass Pro.

Opponents claim this is a misuse of tax dollars, but such an arrangement is hardly novel. Last June the county approved $3 million for Big Bend Road work to help a Riverview retail project that did not have an anchor tenant. In the 1990s, Hillsborough provided a developer nearly $30 million for road improvements around Citrus Park Mall.

This is the “you did it before so keep doing it” argument which we discussed in our last post.

The road work now in question is the county’s responsibility. The proposal would allow the transportation fixes to be completed by the development’s opening.

Imagine that — the county would address a traffic problem before it materialized. Commissioners should see this is what smart planning is all about.

That would be swell except there are many roads in the County already well behind being brought up to minimally decent standards that the County is not addressing.  Why spend money on roads that the developer should be paying to upgrade anyway and that do not need an upgrade while ignore the existing needs of taxpayers. (As the Tribune explained in another article, the proposed road improvements are not priorities at all: “The road work, which includes looping the Palm River Road extension around the commercial complex, then hooking it up with Delaney Creek Road on Falkenburg, is not on the county’s capital improvement program, nor is it listed as a priority by the county’s Metropolitan Planning Organization.”)

Ray Chiaramonte, director of the Planning Commission, recently pointed out to the commission that the Bass Pro project is consistent with the county’s growth plan.

Here the editorial missed the entire point of the debate.  No one is objecting to use of the land for the project, they are objecting to having the taxpayer help fund that land.  This argument is just a distraction (though the County’s planning process surely could use a complete overhaul.).

Bass Pro, it’s true, has been aggressive in extracting incentives from communities where it builds. But this request comes from the developer of the entire project, which also will include a hotel, offices, entertainment venues, and an additional 240,000 square feet of retail.

Commissioner [sic] should do the math. The 153-acre tract now generates less than $800 in county property taxes a year. The development is projected to increase county tax revenues to nearly $3 million a year. The county should recoup its investment in four years.

According to the county’s economic analysis, the entire development is expected to provide more than 1,700 construction jobs with a $65 million payroll and 1,500 permanent jobs with a $36 million annual payroll. That would be a robust return on investment.

Of course, these jobs will exist if the developer goes forward with the development without public money – or if someone builds a few miles up the road in Pasco.

And, we did some math.  Based on the figures in the editorial, the AVERAGE yearly salary will be $24,000 which, coincidentally, is barely above the Federal Poverty level for a family of four. Now assume there will be managers with higher salaries– that lowers the average wage for everyone else to poverty level or below.  (Even if two people of a four person family have these jobs, the family will be below the latest figure for the area’s median income we found in the Tribune.) Not exactly a good deal.

In November, the Tribune reported on much lower incentives given to other companies to create much higher paying jobs. Even those deals, as good as they may be, are not “robust” returns.  The Estuary/Bass Pro Shop deal is not a good investment at all. (In one deal featured in the article, Digital Risk, there is a planned payroll of $30,000,000 for an investment of $600,000 – a much better investment.) We wonder if the Tribune – and more importantly the County Commission – really believes that the taxpayers should give away a large sum to a developer for low paying jobs instead of finding a better investment that gives better returns?  (See our discussion here)

It is hardly unusual for the county to aid major ventures that are likely to significantly boost the economy. The county has provided millions in direct incentives to speculative projects, including $28 million to the M2Gen cancer research facility, developed by Moffitt Cancer Center and Merck, and $6 million to Draper Laboratory, which researches microscopic technologies.

Whatever you think of either of these projects, they are not low wage retail, and, therefore, not relevant to the Bass Pro Shops issue. And we reiterate – just because something has been done in one context is not a reason it should be done in a different context.

And in this case, commissioners are not being asked to give direct incentives but to fund road work.

It is understandable local shops worry about the county aiding what they view as competition. But this is not some routine big-box retail project. Bass Pro Shops are essentially tourist attractions. The store would cause at least some Hillsborough visitors to stay here an extra day, an important benefit in a county struggling to build its tourism trade. It would attract shoppers from surrounding counties.

The Monday Tribune article explained the inaccuracy of this point. It explained that Bass Pro Shops does not really buy this argument: Bass Pro’s own figures of average distances traveled by its customers show more than 50 percent drive less than 25 miles to a store and almost 80 percent drive 75 miles or less. . . .Orlando, about 85 miles northeast of Tampa, has a Bass Pro Shop, as does Fort Myers, 127 miles to the south.” 

So where are the tourists coming from?  We do not consider shoppers from Pinellas, Sarasota, Manatee or Pasco Counties to be tourists.  The editorial also ignores the fact that there are already a number of hotels at Falkenburg and SR60; it is questionable whether the area needs more hotels, even with Bass Pro Shops.

Mayor Walter Duke of Dania Beach wrote to Hillsborough commissioners on behalf of the project. He said, in addition to creating 500 jobs: ” … Bass Pro Shops’ Dania Beach location also has helped attract new and return visitors to our area. More than 1.5 million people annually visit Bass Pro Shops in Dania Beach. As people go to this store, they are also introduced to the other small businesses and destinations surrounding this location. It is clear that Bass Pro Shops helps cater to our visitors and has acted as a gateway for increased traffic to the entire area.”

There is no question that if you put a big store in an empty field, there will be more people going to the formerly empty field. (And remember, Ikea got no incentives.) The question is not whether Bass Pro Shops is nice to have, but whether it is worth the investment of public funds.  As explained above, Bass Pro Shops does not even buy the destination argument; how can the County Commission? And the Orlando, Ft. Myers, the St. John’s County, and Tallahassee stores will draw off almost anyone not in the Tampa Bay area already.

Hillsborough commissioners on Wednesday can dismiss the numbers, play to the crowd and rail against big corporations. Or they can make the cool-headed calculations that reveal this is a good deal for Hillsborough’s economy and taxpayers.

We applaud the Tribune for maintaining a strict separation of the news and editorial departments.  However, their own reporters essentially invalidate their editorial’s arguments.

Conclusion

We will reiterate: no one objects to Bass Pro Shops – they object to the subsidy deal.

This deal is the same old, failed business model for Hillsborough County.  It is time to change our development model.  Reject the deal.

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