As City Planner Frank Wash sees it, it all comes down to a topic that’s ripe for debate: How can you subsidize one business and not another? Farming, industrial operations and professional sports arenas — the entire system is lined with subsidies, he said. Is it time for
“It’s no surprise to me that a heavy-hitting retailer/tourism operation like Cabela’s comes in and says it needs special treatment,”
Cabela’s is the nation’s largest specialty retailer of hunting, fishing, camping and related outdoor merchandise. It had revenues of $1.8 billion in fiscal 2005. The chain has 18 stores across the country and expects to open eight more in 2007. The only Cabela’s in
Cabela’s is only one part of a very big project. The developer plans to create five distinct districts within
The Walker City Commission has made it clear from the beginning that the city cannot help with any funding. The only tools the city has at its disposal are the brownfield program and Local Development Finance Authority process,
An LDFA establishes a legal basis and procedure for the capture and expenditure of tax increment revenues to support projects that spur new economic growth and create employment opportunities. The tax capture has to be applied to infrastructure improvements in the LDFA district. Both the brownfield and LDFA processes take time.
Cabela’s isn’t a typical retailer,
Cabela’s indicated that a
Outgoing Senate Majority Leader Ken Sikkema, R-Wyoming, fully supports finding a way to bring Cabela’s to Walker and wants the state Legislature’s help, said Ari Adler, Sikkema’s spokesman. Adler explained that the Legislature could address some kind of tax incentives, or do something funding-wise in terms of infrastructure improvements. Most likely, the Legislature would get involved in writing some tax code that would help Cabela’s, much like it does for manufacturers and others that come to the state and ask for help, he said. Cabela’s is talking about 263 full- and part-time jobs, and
“The governor often comes to the Legislature for help when there are manufacturing jobs they want to bring into the state, and we help them out,” Adler remarked. “We’re asking for the same treatment for
Adler pointed out that many of the manufacturing incentive deals that get approved only happen because the Legislature passes a bill that makes them happen. The Legislature often passes bills having to do with tax incentives of some kind and they’re written very specifically — for a specific company, a specific location and a specific reason, he said, so there’s no reason the Legislature couldn’t do that in Cabela’s situation.
Cabela’s approached the Michigan Economic Development Corp. for some assistance but the MEDC typically doesn’t provide tax incentives for retail ventures, said
“The other piece that is vital to understand in this circumstance is that we don’t provide incentives to companies that have every intention of locating in a particular spot,” Shore added.
He said the MEDC talked with Cabela’s and offered to show them brownfield redevelopment opportunities in the region where they could receive tax incentives for locating. In Shore’s estimation, Cabela’s has a particular spot in mind, and the company is intent on asking for incentives for something it plans to do anyway.
The MEDC’s failure to provide incentives will not kill the chances of Cabela’s locating in
“I think it’s significant and notable that the city of
The MEDC released a written statement Wednesday welcoming Cabela’s to the area and promising that the MEDC and The Right Place Inc. will work with the company and Walker to make Cabela’s entry into this market as seamless as possible in regard to its site plan review and permit approvals. The MEDC also offered assistance with any regulatory issues that might come up.
George Erickcek, senior regional analyst for the W.J. Upjohn Institute, said the jobs created by Cabela’s would create some additional jobs indirectly. He estimates each Cabela’s job would generate another 1.5 to 1.7 jobs, mostly in retail, but also some new jobs in service sectors such as accounting, security, landscaping and building maintenance.
In Erickcek’s opinion, a Cabela’s would have a smaller multiplier than manufacturing, primarily because it would not have a very large supplier base. On the other hand, new jobs in the furniture and automotive industries have a higher multiplier because there are suppliers to both of those industries in
“A key difference between a Cabela’s and a Meijer or a Wal-Mart is that people do travel quite a ways to these stores,” Erickcek said. “Insofar as these stores do bring in dollars from outside the greater
The challenge, Erickcek said, is that since Cabela’s would compete with outdoor retailers already in the area, some of those dollars will be just local dollars. If customers choose to shop at Cabela’s instead of the existing outdoor retailers they have patronized, employment levels at existing stores could go down as the dollars go to Cabela’s, he noted.