City officials in Broomfield, Colorado have offered to pay for 49% of the cost of site acquisition for a Wal-Mart supercenter — a deal that will save Wal-Mart $7.85 million, funded by taxpayers. The funding will come in the form of a sales tax to pay off the landowner, since Wal-Mart did not offer enough money to close the deal. So the city is giving them welfare to cover the shortfall. Sprawl-Busters received a report this week from a resident who is upset by this public subsidy, and collusion between Wal-Mart and city officials over their proposed supercenter. “It seems that our city council may be up to no good,” he writes. “They have an urban renewal plan which will impact me and others in my area. The plan involves expanding a small side street and adding retail and living space. In order for their pet project to go through, they need money. Unfortunately, the city doesn’t have the money for the project. So, they have the idea of getting a box retailer in the area to foot the bill. Just walking distance from my house there is a company called Barber’s Turkeys. They are a processing plant for turkey bits. They have quite a few acres surrounding their building. Well, guess who they have been talking to since February? It seems that Wal-Mart has their eyes on this property. The city of Broomfield has put together a relocation package for Barber’s. Their property is worth about $5 million. The city is offering them about $16 million to get out of town. There are a few of us that think the city is secretly negotiating with Wal-Mart. From what I understand, about the same time the city passed the measure to pay the $16 million, they also authorized a request for proposals from retailers. The window of opportunity is only 30 days. Is this fair to the citizens of Broomfield?” In fact, the Daily Camera reported in late August that the city had assembled a package of financial incentives for Barber’s Poultry Inc. to relocate. The City Council, acting as the Broomfield Urban Renewal Authority (BURA), planned to give owners of the turkey plant $15.85 million to vacate their 35 acre property on 120th Avenue. Of that total, they would pluck $8 million from shoppers, in the form of a sale tax, for the Barber family, and BURA would fork over the remaining $7.85 million over a period of time, up to 15 years. The money would cover the relocation costs for the turkey company, but would not start to flow until the retailer was open and producing sales taxes. The city argues that the turkey plant is located in a Corridor Redevelopment Plan, which is seen as a gateway to the city. But the plan did not sit well with all members of the City Council, and the plan to come up with the $7.85 million in public subsidies to the Barbers passed by 6-4. If only one vote had switched, this turkey of a plan would have died. Instead of going into the Broomfield treasury, the $7.85 million in proceeds from the sales tax goes to the turkey plant owners, who have been talking to Wal-Mart for two years. The City told the Daily Camera however that Wal-Mart did not have a lock on the property. Last February, the Barber family told the City that Wal-Mart had offered $7.6 million for the property. That same month, Barber requested $18 million to help the company relocate. The land is only assessed at $4.3 million, but the city says assets on the land are valued at $16.1 million. The city also claims that a store like Wal-Mart will bring in $3.1 million per year in sales taxes (not counting city expenses). When neighbors complained about potential traffic from the Wal-Mart, city officials noted that if they didn’t grab the deal, the retailer could locate over the city line in Westminster. Ironically, Broomfield already has a 200,000 s.f. Wal-Mart supercenter. “This company is unethical,” one neighbor testified, “and we never should have let one Wal-Mart open within our city and county limits, much less two.” Residents also complained about the retailer’s business practices, and its economic impact on local businesses. The deadline for retail applications is September 22nd, and apparently Wal-Mart is the only company submitting a bid, which caused some residents to complain the whole process and timetable was being rigged for one applicant. The Council is not expected to make a decision on the deal until its October meeting.
This welfare for Wal-Mart is a real turkey of a deal. The buyer and seller could not agree upon price, and instead of allowing the free market to play out, the city steps in and offers to cover half the cost for Wal-Mart, writing down the project with public money that could have gone to police, schools or fire services for Broomfield. The idea of putting a huge supercenter at the gateway to the community is also bird-brained. Instead of helping Wal-Mart feather its nest, the city should stop playing economic development with public money, and let the rich retailer come up with the scratch. Wal-Mart has been given an early Thanksgiving with this turkey project. If they couldn’t swing it financially, they should have moved on. Broomfield has one Wal-Mart — more than enough to serve this market area. For similar subsidy stories, search Newsflash by “welfare.”