The IDA and Kohl's

I published my detailed account of this morning's IDA meeting on ccSCOOP. You can go there to read a summary of what everyone had to say about the proposed PILOT for Kohl's. Here you can read David Colby's comments, delivered on behalf of the members of Columbia County Chamber of Commerce, which I publish with his permission.

We want business. We welcome Kohl’s, but not like this. We agree with people that have said this application is about jobs. The problem is this: there is no significant addition of net new jobs to our community in this application.

We asked the developer for that information, but they have not produced anything to support the claim that this project will provide good, living wage jobs.

It is our opinion that public tax dollars should not be used to subsidize ventures that will compete with local business. This project will surely take sales away from other local retailers. The loss of sales results in fewer jobs and less sales taxes revenue. What we are really talking about here is not adding jobs, but merely swapping the jobs we have now with jobs at Kohl’s.

When sales decrease at existing local retailers, those businesses are in danger of going out of business. This not only affects the owner and employees of that business, it impacts other local businesses they do business with. Local retailers hire local accountants, local attorneys, local insurance agencies and others to perform services. The national retailer you are being asked to subsidize will not carry on those business relationships. Local business is good business.

We are not opposed to competition for local retail if it is done in a fair and equitable manner, without tax breaks. Three current tenants at the Widewaters development all located stores here with no tax breaks and have become members of our Chamber of Commerce. We support Lowe’s, Walmart, and Applebees as we do any other Chamber member business in our community. Fair competition makes local businesses better; unfair competition because of tax breaks can harm local businesses. This combined with the fact that is no real economic gain is why most Chambers of Commerce and economic development professionals do not support PILOTs for retailers.

Instead of generating new wealth in a community, new retail simply shifts shopping patterns. Almost every item found at Kohl’s is available elsewhere in our community. For this are we really willing to give a $1.3 million tax subsidy?

We understand local politicians and the media wanting to support job creation. When you look at the issue from 30,000 feet, it is tempting. Giving up some tax dollars for jobs could sound pretty good. But when you closely examine the quality, quantity, and stability, it is less than appealing.

Columbia County is not unique. This battle is waged daily in communities across America. In Stacy Mitchell’s recent book about tax breaks for large retailers and how they impact communities, she talks about the Jobs Mirage. Elected officials and the local media typically tout new retail as “New Jobs” and “Economic Opportunity” for a community. The result is usually a loss of jobs and tax revenue that is equal or greater than what you have gained.

I talked to a colleague who is the CEO of a retailers association recently about this proposal to get his view. He said, “I don’t understand it, in retail there is either a market or there isn’t.”

Widewaters has stated that this PILOT would: “Put Columbia County on the map.” I agree--as a place with a poor understanding of the economics of retail. Please do not support this application.