November 4, 2016 11:45:25 AM
The Starkville Board of Aldermen is getting a full court press to grant yet another TIF (Tax Increment Financing). TIFs are mostly government subsidies for what a city considers worthy projects in need of financial help to make them happen.
This one would be going to that most needy of corporations, Walmart. By the way, the public record says they started 2016 with $8 billion cash or cash equivalents on hand. Cue the violins.
According to Forbes, Walmart is rolling out their neighborhood market concept across the country. It is their answer to the consumer trend for quicker, smaller sized people scale stores like Family Dollar and Dollar General.
The project seemed pretty much headed for a standard approval process when someone had the clever idea to ask for a TIF. Walmart wants to recapture over $1.3 million for building a road, installing signage and various other costs of the development off Highway 12 north of the University.
Starkville is no stranger to TIFs. We have provided them to no less than four different projects over the past years. The most prominent were the Cotton Mill development on Russell Street and the shopping center at Louisville and Highway 12.
Very recently we have seen the number of requests escalate to include Academy Sports, the Parker McGill car dealership and now this Walmart project.
Some justifications in granting those TIFs are better than others, but once the door is opened it becomes hard to say no. Without adopting a clear city policy those requests will continue to be matters subject to political winds rather than based on statutory guidelines and fiscally prudent policy.
Mississippi Code Title 21, Chapter 45, governs a city's use of TIFs. The statutory language is clearly geared to clean up blighted areas and provide investor incentives for redevelopment projects. It gives far less support for new projects but there is enough wiggle room to justify it if they are determined.
The Board wisely turned down the Walmart request but the push from a board member and the developer highlights the very political nature of the pressure applied and the public story that sometimes gets distorted.
Because the vote was 4 to 3 against, Walmart and those pushing for the subsidy are hoping a change of one vote might yet happen.
There is a strong desire for the convenience of a grocery store on the north side of town. It is about two miles from the north end of town to Vowell's Market on Highway 12. It is about 1.5 miles from the north end of town to the proposed Walmart. Is that convenient, half-mile reduction worth over a million taxpayer dollars? It's hard to make that case.
Some have argued Walmart would be cannibalizing their current store with the addition of this grocery market. If they evaluated the market and determined it a viable project with new customers and new money then they obviously don't need the financial help to make it work. Remember the $8 billion in cash.
However much we want development on the northeast side of town, convenience and traffic don't satisfy the statutory requirements. They certainly don't meet the public need requirement you would use to justify discriminating against established businesses by providing giveaways to new, similar private sector competitors.
The county has approved this TIF its share of tax dollars. The difference is the county only returns the incremental increase in ad valorem tax dollars while the city is being asked to return ad valorem tax and sales-tax increases.
Alderman Wynn said she successfully influenced the Board of Supervisors to vote in favor of the TIF obviously believing she could deliver the Board of Aldermen. The board thought otherwise.
TIFs should be decisions that come after strong fiscal analysis and be the result of logical, consistent policy. Saving political face and benefiting a wealthy developer have no place in the equation.
The vote was taken, the request denied and it is time to let Walmart make the financial decision that all business owners have to make: fish or cut bait.
Lynn Spruill, a former commercial airline pilot, elected official and city administrator owns and manages Spruill Property Management in Starkville. Her email address is [email protected]
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