Tuesday, October 20, 2009
New Campaign Video & Feedback on Big-Box Retail
There are a lot of factors to consider regarding a proposal of a big box retailer such as a Wal-Mart. I certainly support Ordinance 1450 and subsequent Ordinance 1509, which requires a special use permit for any retailer store over 50,000 square feet. I believe these ordinances encourage the careful consideration of how such a project will affect both the economics and character of the Town of Blacksburg as the proposal moves through Council.
In looking at the overall benefit of such a project to the town, it is important to not only include tax revenue for the town, but to also consider the externalities of such a project. The 5% sales tax from any retailer is split so that 4% goes to the state and 1% goes to the county to be allocated by population in schools. The amount Blacksburg receives will be the same whether you shop in town or in Christiansburg. Now let’s say a ‘smaller Wal-Mart’ holds $10 million total property value, similar to what the South Main Kroger shopping center was valued a couple years ago. At a $.22 per $100 assessed value, this would produce $22,000 in property tax for the town. The real significant revenue for the town will come from the Business, Professional, Occupational License Tax, or BPOL tax. This tax is based on the yearly income of a retail business at a rate of $.20 per $100 gross receipts for retail if they make over $50,000. While the Wal-Mart in Christiansburg makes $100 million gross per year, the incoming Sam’s Club and potential Blacksburg Wal-Mart (or any other big-box retailer) will cut into that revenue. So let’s go with the idea of a ‘smaller Wal-Mart’ making around $30-40 million in this market (a typical Wal-Mart makes $50-$60 million). This means a Wal-Mart’s BPOL tax revenue for the town would be around $60,000 to $80,000, making the total income for Blacksburg, at maximum, approximately $100,000. This final amount would only make up 0.37% of our total general budget.
In tough economic straights an added $100,000 to the budget is alluring, but we need to consider the cost of the externalities. If a big-box retailer were to be approved the area is bound to see increased congestion, crime, and pollution that will require town resources to resolve these problems. With a potential location being next to an elementary school there is further concern in this regard. The surrounding neighborhoods will also need to put up with the negative effects of such a development including noise and lighting which will result in lower property values and lower income for the town. Businesses across town that are unable to compete with a big-box store may fail and result in the loss of even more tax revenue for town and the loss of character of our community. Such failures may require significant town investments to revitalize resulting depressed commercial areas. At the end of this estimate, the town may only be benefiting by the tens of thousands of dollars, if even that.
If a big-box retailer proposal were to reach council, I believe there should be very careful deliberation and reasoning throughout the decision making process that maximizes public input and collaboration. This is especially important in looking at how in the short and long term such a project will affect the town. With the information I have seen I do not believe a Wal-Mart fits the character nor the economic need of the Blacksburg community, but I am certainly open to deliberation of such a project and the will of the community I intend to serve.
As I mention in the video above, you can read the master plan of the planned redevelopment of Fairfax Boulevard from a series of strip malls to store front community-centered development here: http://www.fairfaxva.gov/Boulevard/VisionSummary.pdf.