They all do it. All the retail giants try to sock local taxpayers for whatever tax incentives they can get. Why should Lowe’s be any different? The North Carolina based retailer, which calls itself the “second biggest home improvement retailer in the world,” had sales in 2003 of $30.8 billion, and net profits of $1.9 billion. So its hard to figure why a company that rich can’t find enough capital to build its own distribution center. But the City Council in Westfield, Massachusetts is poised to ink a deal with Lowe’s that would give the company a twenty year tax break. That’s welfare that may outlast the 220,000 s.f. distribution center itself. The agreement, which the City Council will vote on tonight, would cut Lowe’s personal property taxes in half for the next fourteen years, and then a smaller tax break for the next six years, until they only get a 5% break by year 18 and 19. The total value of the tax break was not disclosed. Not bad for a company that sells $58,600 every minute of every day of the year. Westfield Mayor Richard Sullivan, Jr. has agreed to give poor Lowe’s the longest tax increment financing deal allowable. The city made a similar deal with the Caldor’s discount chain, but that 20 year deal ended 12 years later when Toys R Us took over the property, and now Toys R Us is in deep financial trouble. There are currently 11 similar “flatbed” Lowe’s distribution centers in the U.S., and the retailer plans to open three more this year. The big box distribution center nearly ran into environmental disaster when another kind of box was found on the property — the Eastern Box turtle. But Lowe’s agreed to “protect” 52 acres on the site to preserve the box turtles — which is more empathy than they would show hardware stores in the Westfield area.
Taxpayers in Westfield will have to pick up the freight for the tax break given to Lowe’s. TIFs should only be used for industrial uses that create good jobs, at good wages. The Lowe’s distribution center is only expected to employ 45 people. It will be the feeder system for Lowe’s discount stores that will help kill other jobs in the host communities where it builds. In effect, other businesses that pay their full taxes are subsidizing the wealthy corporations that have enough money to build distribution centers five times the size of a football field. The moral? Shop at your local hardware store. They never asked for public welfare, and they didn’t make $2 billion last year. Think of your shopping dollar as an investment. Lowe’s clearly doesn’t need your money, your local merchant does to survive, and keep some kind of a competitive marketplace alive.
