Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

[BadJuju]

http://www.theatlanticcities.com/job...-cabelas/2906/

My city recently had dealings with Bass Pro Shop. The company demanded $25 million from the city to build at a local development, but the voters would not approve of it. It ultimately went to a city next to us. For this, I am grateful because retail is not economic development. And it is baffling that people would actually bribe these companies to move here, especially when these institutions do not generate real local wealth. I hope the other city enjoys it because that shop is going to ultimately bite them in the ass tremendously. And with poor economic conditions persisting, there is no way they are going to get the retail sales they need to cover the costs.

[GRG55]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

http://www.theatlanticcities.com/job...-cabelas/2906/

My city recently had dealings with Bass Pro Shop. The company demanded $25 million from the city to build at a local development, but the voters would not approve of it. It ultimately went to a city next to us. For this, I am grateful because retail is not economic development. And it is baffling that people would actually bribe these companies to move here, especially when these institutions do not generate real local wealth. I hope the other city enjoys it because that shop is going to ultimately bite them in the ass tremendously. And with poor economic conditions persisting, there is no way they are going to get the retail sales they need to cover the costs.

Businesses that require a government subsidy in any form are not real businesses...they are just a lifestyle support mechanism for the shareholder(s) masquerading as a legitimate business...

[jk]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

it's not clear that they need the gov't subsidy. otoh, if you run a business and know that local gov'ts are handing out subsidies, you would be foolish to ignore that fact.

[Raz]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

Businesses that require a government subsidy in any form are not real businesses...they are just a lifestyle support mechanism for the shareholder(s) masquerading as a legitimate business...

+1.

[vinoveri]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

it's not clear that they need the gov't subsidy. otoh, if you run a business and know that local gov'ts are handing out subsidies, you would be foolish to ignore that fact.

foolish indeed; and further foolish if you thought you could succeed in getting the government to grant more "subsidies" by "investing" some of your profits in lobbying efforts .... and didn't do it.
This rational self-interest is a primary reason why government should be relatively small with power limited IMO.

[dcarrigg]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

http://www.theatlanticcities.com/job...-cabelas/2906/

My city recently had dealings with Bass Pro Shop. The company demanded $25 million from the city to build at a local development, but the voters would not approve of it. It ultimately went to a city next to us. For this, I am grateful because retail is not economic development. And it is baffling that people would actually bribe these companies to move here, especially when these institutions do not generate real local wealth. I hope the other city enjoys it because that shop is going to ultimately bite them in the ass tremendously. And with poor economic conditions persisting, there is no way they are going to get the retail sales they need to cover the costs.

Did the voters in the city that ultimately took the Bass Pro Shop actually vote yes? Or did it not go to a vote there?

If it didn't, what do you imagine the source for a revenue bond's revenue to be? Nope. Can't be a revenue bond. Another potential debt mine.



_______________________________
But now I'm going to go off on a long rant again.

So far as Bossier City goes, they're in potential trouble, but probably will be able to absorb it. My guess is that the Greater Bossier Economic Development Foundation floated the bonds, and that there's a general obligation style, full faith and credit waiver in the agreement. The city already is floating hundreds of thousands of dollars for bonds on the back of future tax revenue as a standard operating procedure and is dumping transportation bond funds into trying to build a casino next to the damned Bass Pro Shop in a complex they've entitled "Margaritaville," and without paying royalties to Jimmy Buffet, I'm sure.

$600 per capita on principal alone for a retail store?

__________________________________________________ ____
Then Buda, TX was the killer in that article.

$60 million for a Cabelas. $8,000 per capita on principal alone. And it was in revenue bonds. What revenue? These wouldn't sell without a GO rider.

Do you know how they did that? I didn't, but now I do, thanks to a kid named Joeseph De La Cerda's PoliSci research at Texas State.

The city council created a corporation called the "Du Pre Development Corporation" specifically for the Cabela's purchase.

Then they bought out a rancher who owned land near I-35. And they tried to stiff him with a $300,000 tax bill for conversion of aggie land, but the negative publicity was enough for Cabela's to eat the bill.

Then the city paid for new water, sewage, road and utility connections and built the foundation.

Then, and this is rich, they classified a Cabela's retail store as a "public museum."

Here's the breakdown so far for the "Du Pre Development Corp":



Well, I was going to dig more into this, but I have to run for now. I'll try to edit tomorrow.

For now, chalk Buda, TX up on the list of municipalities that are liable to go bankrupt in the next decade.

[flintlock]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

$25 million for one store? Wow.

I agree that having to subsidize a store to this degree in order to bring in development is sketchy, but I dont get the part about retail not being economic development. Retail sales tax alone can be worth millions to a city with a store like that. Then there are The jobs created. If not retail then what? Its not like we can all go back to building cars and refrigerators. A store like this can be a boon to a community, just not if they have to sell the farm to get it.

[GRG55]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

$25 million for one store? Wow.

I agree that having to subsidize a store to this degree in order to bring in development is sketchy, but I dont get the part about retail not being economic development. Retail sales tax alone can be worth millions to a city with a store like that. Then there are The jobs created. If not retail then what? Its not like we can all go back to building cars and refrigerators. A store like this can be a boon to a community, just not if they have to sell the farm to get it.

In a normal world there is no production without consumption...so consumption itself is certainly not a "bad thing". But these days everyone seems to think they can build an economic model where they are the producer and "someone else" is the consumer. The Germans are masters at this, lecturing the deficit countries in the EU to make their economies "more German"...

[BadJuju]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

$ If not retail then what? Its not like we can all go back to building cars and refrigerators. A store like this can be a boon to a community, just not if they have to sell the farm to get it.

The problem is that we already have a ton of these big box stores and restaurants. We are going to reach a point at which all we do is sell stuff to each other while producing nothing. At the same time, these developments are leeching money from cities and thus taxpayers. It is a sham and it pisses me off to see my local leaders fall for these schemes.

[BadJuju]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

Did the voters in the city that ultimately took the Bass Pro Shop actually vote yes? Or did it not go to a vote there?

If it didn't, what do you imagine the source for a revenue bond's revenue to be? Nope. Can't be a revenue bond. Another potential debt mine.

Thanks for the good information. I had heard from another person about Cabela's receiving billing as a natural museum in other places. It boggles the mind what these companies are willing to do and more disturbingly what they are able to do to weasel their way into existence. It is just such a perfect picture of how screwed up our economic system is these days.

Here is an article covering the development:

http://www2.tricities.com/news/2012/...s--ar-2134274/

"Bristol, Va., officials expect to borrow $25 million to purchase 140 acres near Interstate 81’s Exit 5 along Lee Highway, Vice Mayor Guy Odum said Wednesday."

This is so foolish. It just pisses me off seeing it.

[thriftyandboringinohio]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

Some years ago I read about these large sporting goods stores doing this.
As I recall Gander Mountain was an early innovator in extracting local tax benefits.
They present their store to the city officials as if it is an amusement park that will draw in tourists to the town who will spend at other stores and restaurants nearby.

[flintlock]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

Well Bass Pro shop would not build a multi-million dollar store if they didn't feel they could sell product. But I know what you mean by too much retail. We have that around my area too. Unfortunately, selling each other useless trinkets or services is becoming all that is left of the US economy. If your local leaders give them $25 million they need to be tarred and feathered. I can understand some places giving short term tax incentives or other means of attracting business to a stagnant economy. But sounds like this is just more cronyism. The new normal in America!

[flintlock]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

Walmart was also know for this kind of thing. Only they were famous for having people's land confiscated using a twisted imminent domain argument.

[c1ue]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

Bristol, Va., officials expect to borrow $25 million to purchase 140 acres near Interstate 81’s Exit 5 along Lee Highway, Vice Mayor Guy Odum said Wednesday.

This is the real point. Some large landowner is utilizing the local tax base to cash out on property, which I guarantee some proceeds of which will find its way into pockets and re-election donations.

I don't know exactly which land is in question, but a quick Google Maps view shows this: a bunch of empty land with nobody around it, which has now sold for over $178K per acre:

81 and lee.jpg

What's the average price for land in the entire state of Virginia, much less a rural location as the above?

[CanuckinTX]

Re: Bass Pro Shop: A Case in Crony Capitalism and Predatory Businesses

The funny thing is that the Cabela's in Buda, TX is a tourist attraction. I know lots of people that come to town make a special trip there and I've taken my family there a few times because it's so huge. You can spend a lot of time looking at their numerous exotic stuffed animals, plus they have a cafeteria and a huge fish tank. Not sure what the add on effect to the rest of Buda is though. I think it's growing rapidly though, there's lots of new retail giants opening up there.