“Wallomet,” is a fictional name that the Ole Seagull has made up to avoid trade mark and other potential legal problems with four of the nation’s largest retailers. It is a composite of their names and for purposes of this column represents the “big box” type of retail store that America loves to shop in and the nations number two retailer.
Like most big boxes, Wallomet has a professional staff that determines the areas in which they would like to place stores. Wallomet has determined that they want to build a store in the Hollister/Branson area and, in this case, working with a developer, starts the process to make the store a reality.
Obviously, there are a myriad of facts and details that will impact on the process. However, there are two things that Wallomet is primarily concerned about. They want a location on a main traffic route that provides convenient access to their facility and to spend as little of their money as possible in building the store and getting it operational.
In the case of their Branson/Hollister location they are working with a developer who wants to locate them within a “power center” that will contain not only Wallomet but other big boxes that will complement them and provide a synergy that will draw other commercial retail development to the center. The developer comes back to Wallomet and says, “We have a choice of two locations, one in Branson Hills at the north end of Branson or one in the Southtown area in Hollister.”
The Branson location is located right off the areas main north south route, U.S. Highway 65, which, at that point, is a four lane highway with a multimillion dollar interchange and virtually no traffic congestion. The Hollister location is currently located on a congested two lane bottleneck of that highway with no interchange. That is about to change however because of a construction project has just started in Hollister that will extend the four lanes portion of the highway through Hollister and provide a modern multi million dollar interchange at the Hollister location. The project should be completed within two to three years.
As the process continues and comparisons are made between the potential Branson and Hollister locations it becomes obvious that the total site preparation costs for the development will be much cheaper in Hollister than in Branson. Indeed the difference is so great that it appears that the Wallomet is going to be built in Hollister. But wait; there’s another tool that both have available to them, Tax Increment Financing (TIF).
It’s kind of like driving a nail. Both a rock and a hammer will get the job done but it’s hard to ignore the efficiency of a hammer if one is available. Hollister, for what ever reason does not use a TIF. Branson, rather than just concede the Wallomet, its hundreds of jobs and millions in sales tax and other revenues to Hollister elected to use a TIF. The use of the TIF to reduce the site preparation costs tipped the balance in favor of Branson and the developer with which Wallomet was associated entered into negotiations with Branson to locate their store in the Branson Hills location.
From strictly a city of Branson point of view, what else where they supposed to do? The job of the city staff and the board of aldermen is to run the city of Branson, not the school board, county government, ambulance districts, other cities, etc.
If, in their opinion, the location of the Wallomet store in Hollister could have an adverse impact on the revenues necessary to operate the city, an impact that could grow exponentially as other big boxes and retail clustered around the Wallomet in Hollister, wouldn’t they be negligent if they didn’t use every tool available to get the Wallomet in Branson? In the opinion of an Ole Seagull, how they use that tool to craft something that best serves all involved is one thing but the use of the tool itself, in the case of the big box TIF at Branson Hills, is a no brainer.
