Finding an economic opportunity to take advantage of didn’t take long. Council approved its first direct subsidy in February to Scheels All Sports, which will allow the Minnesota-based company to collect and keep a sales tax of $16.2 million over 25 years. Scheels is expected to invest $84 million in land at InterQuest Marketplace, plus the building and necessary equipment. The retailer has projected it will bring in $53 million in net new city tax revenue over 25 years beyond the subsidy, and that it would create 400 jobs with an average annual salary of $46,250.
Like it or not, this incentive sets a precedent. So how forward-thinking was the decision?
To start, the problem with that salary is that it’s an average, and this is a retail location, meaning the majority of employees will stock shelves, clean, run registers and oversee Scheels’ signature Ferris wheel. Most positions will make around minimum wage.
Many would argue these are jobs for high school kids. But Scheels will be open year-round. Working adults will fill these positions. Who picks up the bill when minimum wage doesn’t cover the rising cost of living? What if workers require public assistance? And forget about affordable housing on the Northside of town.
The city also struggles with semantics: Economic Development Officer, Bob Cope, was quoted in local media as saying, “Overall, there’s going to be some opponents that will say, ‘How can this city afford to give $16 million to this retailer or to any business?’ ... First of all, we’re not giving them $16 million. That $16 million does not exist until Scheels comes in and makes that investment and generates those sales.”
It’s a verbal shell game. Scheels will be $16 million richer than it would have been had City Council not given the green light. And what would the return have been had that money been invested in local small businesses instead?
Jeff Greene, the mayor’s chief of staff, told Council on Feb. 12, “This is not about picking winners and losers. This is about securing the financial viability of our city going forward,” as Colorado Springs gets most of its revenue from sales tax collections.
Tell that to the other sports chains and the locally owned sporting goods retailers already doing business in the city. Cope also told Council that Scheels is expected to have a $1.5 billion economic impact over the next quarter-century, while acting as a “unique and extraordinary retail venue and experience for our citizens.”
But Scheels isn’t a novel idea along the Front Range. Mega-outfitters are quickly carving out a disproportionate niche on the Northside of town. What sort of community do we really want, and do more retailers cut from the Scheels cloth fit that vision?
In 2001, Eric Schlosser’s Fast Food Nation: The Dark Side of the All-American Meal was published, featuring, in part, Colorado Springs. Not for its astounding views or highly educated population. Rather for its glut of chain restaurants offering unadulterated junk.
Not all opportunities are the same. If we’re serious about planning COS, let’s be sure the companies we court at taxpayers’ expense are desired and needed — and that they provide us with actual nutritional value.