The media has exhaustively covered the story of the devastation that hurricanes Katrina and Rita wrought on the gulf coast. Stories of flood victims, homeowners and small merchants have documented the suffering of the region. But now disaster relief efforts are being “targeted” to large chain stores — who are hard to describe as “victims” at all. Developers representing the Target Corporation, one of the wealthiest retail corporations in the world, plan to ask the Louisiana State Bond Commission next week to approve a tax-increment financing (TIF) plan that will give away over $50 million in GOZone Hurricane Recovery bonds to open a new Super Target store in Lafayette, Louisiana. According to the Advocate newspaper, the Lafayette City-Parish Council has approved two special taxing districts that would pay for infrastructure for two large commercial developments along Interstate 10. The retailers in these new tax-increment financing districts, or TIFs, would charge shoppers an extra penny in sales tax to pay for improvements to roads, sewer, water and electricity. A developer, Stirling Properties, has said that the 150,000 s.f. Target store it wants to build wouldn’t be feasible without the TIF. Stirling has plans to build as much as 700,000 s.f. at the site, or the equivalent of 14.5 football fields of selling space, plus parking lots. If local officials approve the plan, then the state Bond Commission, the Department of Economic Development and the state legislature all have to sign off on matching one penny of the existing state sales tax in the TIF toward improvements. Part of these tax dollars will be used to build a road that will service only Target customers. So taxes are literally paving the way to the store. The two new taxing districts created by the Council were passed by a simple vote of the council because the districts were drawn to include no residents. The two special taxing districts will collect a total sales tax of 10%. The bonds that will be issued in this development were made possible by the Gulf Opportunity Zone Act of 2005. This federal law provides billions of dollars worth of federally subsidized financing and tax breaks to stimulate reconstruction in Alabama, Mississippi and Louisiana. The law allows Alabama, Mississippi and Louisiana to issue up to almost $15 billion of tax-free “GO Zone” bonds on behalf of companies seeking to build or renovate. So far, however, many of the firms seeking to take advantage of the cheap loans are pursuing ventures that have been described at best as “loosely connected” to the devastation wrought by Hurricanes Katrina and Rita.
Although Target is only one-fifth of the size of Wal-Mart, the giant retailer is hardly in need of federal, state and local welfare, which this deal represents. Target had revenues of $52.6 billion last year, and Target CEO Robert Ulrich made $23.1 million in 2005. The retailer has announced plans to build 600 new stores in America over the next five years. The GOZone bill was rushed through Congress in roughly two weeks, and has now resulted in welfare subsidies to large corporations that don’t need to be on welfare. Smaller merchants that compete with Target in Lafayette Parish will be hurt by these subsidies, which the smaller firms cannot get. The giant retailers are at the trough, taking advantage of the disaster created by the hurricanes, to create a man-made disaster of inappropriate welfare payments to the rich.
