Yes they do but Jordan Creek put Southridge out of its misery, put a big hurt on Merle Hay and put a dent in Valley West.
Will big box stores financially ruin your city or town?
- Thread starter capitalcityguy
- Start date
Yes they do but Jordan Creek put Southridge out of its misery, put a big hurt on Merle Hay and put a dent in Valley West.
Amazon has hurt small business more than anything. I never go to stores anymore outside of HyVee and Fareway.
I don't think it is necessarily an indoor mall vs. outdoor mall issue. In my area, a huge outdoor mall complex (Highlands) went up about a mile away from an existing huge indoor mall (Parks), and they are both doing fine. However, two other, older malls bit the dust. One being Six Flags Mall, which was close to Six Flags/Hurricane Harbor/Texas Rangers Ball Park and in the midst of all that touristy stuff. Seems like it should be a good place for a mall due to all the traffic, but it failed.
I think the key is proximity to shoppers with money to spend. Parks/Highlands are much closer to where the shoppers with some money to spend actually live, and that area has remained so for about 30 years, and looks to remain that way for some time to come. Six Flags Mall is in an entertainment/commercial/industrial area, and the residential area around it is not so affluent. The tourist money wasn't enough to sustain it once the people who live close to Parks/Highlands stopped going up there.
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Yep as well as politicians at different levels that create/endorse the tax advantaged programs.
I don’t think the point of the article was to demonize the big boxes but rather, to be a wakeup call to cities and their citizenry to let big boxes pay their own way and stop providing them incentives. Don’t burden your city with an infrastructure obligation that doesn’t make long term financial sense no matter how enticing it appears in the near term.
This isn’t just city managers. In fact, if politicians didn’t create the programs, there wouldn’t be an tax subsidies for city manager’s to give out.
That's my opinion too. Amazon beats Wal-Mart/Target more than Wal-Mart/Target beats anywhere else. It'll be interesting to see if they get lazy and give up the edge they have on Wal-Mart's online experience.
A few comments.
Yes, closed up gas stations and convenience stores are an eyesore, but as far as storage tanks, those seem to always get pulled up now. I think there was some law change within last few decades to handle? Once the tanks are gone, you have a building that is a lot more adaptable to different uses. One former convenience store near me was recently retro fitted into a neighborhood coffee shop.
Another reason they are not worse is that they are not nearly the financially hardship for the cities compared to when a big box pulls out. A city isn’t left with millions of dollars of related streets, curbs, water, sewer, etc to maintain if a gas station closes down. That isn’t the case, when the big box closes or moves.
Check out the short video I posted at the end of page 1. Eye-opening as it provides the numbers behind this sobering reality. You have to remember the huge footprint a big box store takes to exist (at least in today’s development patterns) and then factor in all the related infrastructure costs that translates to a city.
I think most of those gas stations weren't closed because of the competition. New federal mandates required that all gas tanks be double-walled to prevents leaks and leeching into the groundwater. The big distribution companies upgraded their tanks. The small guys couldn't afford to and went out of business. The additive that was causing the contamination was banned as the same time, so really the problem was solved twice, so one could debate the necessity to require the more modern tank design.
…and I would suggest as an Ankeny resident (assuming you still are), you have to seriously ponder the foundation of your tax base when you consider sections of the city like S Delaware. It is big box store after big box store. While everything is still fairly new, it provides an illusion of positive growth and prosperity without much forethought or planning for how it will pay for itself in the future. (hint: it can’t. The development isn’t dense enough. Too much empty space, too much wasted on parking lot space).
How much of a drag on the city’s future financial health does this street become in 10, 15 years once the first life cycle of all the infrastructures starts to need maintenance? How confident are you there will by ANY money available from federal or state gov’t to help in the future? It will be a strain on city finances IF all these stores are still there and in business, but what are the odd of that occurring?
These are the questions everyone should asking your city leaders after the ribbon cutting ceremonies are over. E.g…”hey mayor, this sure looks nice but can I ask you something? Is the city banking a portion of the property taxes this new big box is producing now, so it will be available for maintenance of all this new infrastructure when needed 20-25 years in the future? I’d be curious to see the numbers if you have those handy down at your office.”
<expect blank stare>
If you have lived in Marshalltown more than 20 years, the overall impact of packing plants has to be crystal clear. The financial impact on Mtown has been immense.
You only have to look at the propensity of new big box stores going up everywhere for the last few decades vs packing plants to realize these are two completely different discussions.
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In my hometown the mall killed the downtown. Wal-Mart killed the mall.
Amazon and Wal-Mart will fight to the death until the 3D printer kills them off or something.
Or maybe we make America great again and start building Studebakers and Nash cars like it's 1954
Amazon and Wal-Mart will fight to the death until the 3D printer kills them off or something.
Or maybe we make America great again and start building Studebakers and Nash cars like it's 1954
Which is why big companies pushed through those regulations. If you can't beat them out, regulate them out.
The tendency, understandably, is for the comments on this thread to drift towards competing retailers over time. Mom and Pop lost out to mall. Mall lost to Walmart, etc. I supposed that is because that is what we traditionally have understood and could easily observe.
That is NOT what this thread is about. That ground is well covered. Nothing to see here folks!
What is new to many/most, is the realization of the financial hole that big box development is putting our cities and towns into that we’ll have to wrestle with for the next few decades.
The immediate question – is your city/town still subsidizing/encouraging these things to get built?? A lot of these seem to still be going up on the edges of cities everywhere….
That is NOT what this thread is about. That ground is well covered. Nothing to see here folks!
What is new to many/most, is the realization of the financial hole that big box development is putting our cities and towns into that we’ll have to wrestle with for the next few decades.
The immediate question – is your city/town still subsidizing/encouraging these things to get built?? A lot of these seem to still be going up on the edges of cities everywhere….
Sometimes these things make no sense. I was driving down Merle Hay road the other day and on the left side you have empty stores like Blockbuster, Office Max, etc. but a couple of blocks down the street they are building a bunch of new buildings.
I'm happy to see that the old K's building in Urbandale is being bought by Hy-Vee. That building has had to be empty for 10+ years.
I'm happy to see that the old K's building in Urbandale is being bought by Hy-Vee. That building has had to be empty for 10+ years.
On the mall note, working with national commercial real estate, it is a combination of factors. Consumer trends are moving towards outdoor shopping centers. Class A indoor malls are still healthy and have recovered; however, Class B/C indoor malls have not. Just on a consumer level, the upper class population recovers their assets at a quicker rate following recessions and depressions (whereas the middle and lower classes will need more time to find the rebound). Consumer confidence influences how much these groups spend and with a slower rebound, you won't see the revenue flow return to the Class B/C malls like you would for a Class A mall.
Also, the economy really tanked at a vulnerable time for some of these big anchors that were expanding (Sears, JCPenny's, Macy's, etc.). Once layoffs weren't enough, closures took effect and downsizing continued beyond the recession. It's tough for a Class C Canton mall to keep the doors open when 30% of your space and a large portion of your rents has up and left. Additionally, while we all love small business, non-anchor tenants (typically your local, small store), they just have not been able to generate a consistent annual performance for the rest of the mall. This makes these malls highly susceptible to any tick in the economy. Without that stability, asset managers are placed in a tough position in needing security but lacking any leverage for negotiations. No one wants a long-term lease in an indoor mall anymore. The leasing will have to get more creative if they want to survive.
Lastly, we've been seeing national trends of a population concentration moving in towards city centers again. This revitalization of downtowns is great for your energy of the city and can bring many jobs in; however, these Class B/C indoor malls that were constructed in the outward movement towards the suburbs in the '70's and '80's are left with a drop in consumer focus with some also facing high levels of vacancy.
Also, the economy really tanked at a vulnerable time for some of these big anchors that were expanding (Sears, JCPenny's, Macy's, etc.). Once layoffs weren't enough, closures took effect and downsizing continued beyond the recession. It's tough for a Class C Canton mall to keep the doors open when 30% of your space and a large portion of your rents has up and left. Additionally, while we all love small business, non-anchor tenants (typically your local, small store), they just have not been able to generate a consistent annual performance for the rest of the mall. This makes these malls highly susceptible to any tick in the economy. Without that stability, asset managers are placed in a tough position in needing security but lacking any leverage for negotiations. No one wants a long-term lease in an indoor mall anymore. The leasing will have to get more creative if they want to survive.
Lastly, we've been seeing national trends of a population concentration moving in towards city centers again. This revitalization of downtowns is great for your energy of the city and can bring many jobs in; however, these Class B/C indoor malls that were constructed in the outward movement towards the suburbs in the '70's and '80's are left with a drop in consumer focus with some also facing high levels of vacancy.
Here is essentially part 2 of this series of articles that are coming out this week on the big box issue:
http://www.strongtowns.org/journal/2016/7/13/the-shopping-mall-death-spiral
Why do you need to know this?
I would suggest because you are a taxpayer and the people running your city may not be clued into this. You need to educate yourself so you can ask the tough questions and hopefully, open their eyes.
The beauty of the financial argument (opposed to the typical “smart growth”, “anti-sprawl”, “city vs suburb” arguments) is that it tends to be agnostic . No special interests being discussed here. Instead, this is about what our cities can and cannot afford to be viable in the future. It is a dollars and cents argument and most people can follow the logic…as painful as the realities may be.
http://www.strongtowns.org/journal/2016/7/13/the-shopping-mall-death-spiral
Why do you need to know this?
I would suggest because you are a taxpayer and the people running your city may not be clued into this. You need to educate yourself so you can ask the tough questions and hopefully, open their eyes.
The beauty of the financial argument (opposed to the typical “smart growth”, “anti-sprawl”, “city vs suburb” arguments) is that it tends to be agnostic . No special interests being discussed here. Instead, this is about what our cities can and cannot afford to be viable in the future. It is a dollars and cents argument and most people can follow the logic…as painful as the realities may be.
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We have a conversion going on close by. The Laguna Hills Mall was probably nice in 1975, but it's fallen on hard times (to say the least)
They have asked a few retailers to leave (Sears being one) and are converting the area into an outdoor mall/apartment development. It'll be a major improvement
