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2008-10-08
Spooner, WI. County Looking To Lower Land Cost For Wal-Mart

Fearful that they will lose their land deal with Wal-Mart, county officials are scrambling desperately to find some way to lower the cost of the project. The world's largest retailer, with net earnings last year of more than $12.7 billion, claims it can't afford their Spooner, Wisconsin project unless the county and the town lower the cost. Just as Wal-Mart has demonstrated its ability to muscle its vendors down the price chain, so the retailer now is succeeding with elected officials who want to sell them some land. On September 8, 2009, Sprawl-Busters reported that Wal-Mart wanted the small city of Spooner, Wisconsin to spoon-feed them money. The icon of the free market also wanted the Washburn, Wisconsin County Board, which owns the land, to prevent other public parcels surrounding the proposed superstore from being sold to Wal-Mart competitors for 40 years. This week, the county officials told the Washburn County Register that the stories about Wal-Mart asking the county and city for $1 million for the project just aren't true. Officials are now backpedaling from that story -- but the new story that's taking its place is still all about welfare for Wal-Mart. The giant retailer has waged an on-and-off campaign to build a 153,000 s.f. superstore in Spooner on 35 acres of county land. This project has been in the works for three years. Last January it was reported by the Register that the Wal-Mart supercenter project in Spooner was in limbo. A Wal-Mart spokesman said the Spooner Supercenter was in a "holding pattern" while the company tried to "manage our growth to insure the long-term success." After roughly four months in limbo, Wal-Mart announced last April that under new "business parameters," the supercenter project would proceed -- on a smaller scale than originally proposed. By July, Wal-Mart paid $30,000 to ask for more time to get its proposal in order. This was the 8th such extension Wal-Mart had asked for. Wal-Mart's lawyer told the county another extension was needed to get the developer's plan and railroad modifications at the site, the latter of which must be done by the state. The developer's agreement was slated to come before the Spooner City Council in September, Wal-Mart said. One member of the County Board complained that Wal-Mart, in effect, had held their land "hostage, in a way" for more than two years. During this time Washburn County taxpayers haven't received any money from Wal-Mart, or any taxes. Their extension fees have all gone into an escrow account. If Wal-Mart ended its agreement with the county for the land, all the money in escrow would be distributed to the county. The land agreement that Wal-Mart presented to the County asked that the land surrounding the superstore not be sold to competitors. Wal-Mart has a list of stores it considers to be competitors. Wal-Mart wants a 40 year no-compete restriction on the surrounding lands. Washburn County has never been asked to restrict who can buy its land in this manner. Wal-Mart implied to the county that if this non-compete clause were deleted from the agreement, the retailer might pull out of the deal. At the city level, the Spooner City Council has apparently agreed to a memo of understanding on the project that requires Wal-Mart to pay offsite road improvements. In September, Wal-Mart threw another expensive money wrench into the deal. Local residents told Sprawl-Busters that Wal-Mart had told the County it wanted a $1 million welfare payment in order to move forward with the project. "Unbelievable that Wal-Mart finally did what we had been telling the county for almost 3 years," citizens wrote. "We told them they were not partners with Wal-Mart. This could be the way Wal-Mart walks away. The county has no funds and the city is looking into any state or Federal programs." According to the minutes of the September 8th, Washburn County Board, under the topic "Wal-Mart Update" the minutes state: "Committee discussed the meeting that was held as a result of a Wal-Mart request... with discussion centering around Wal-Mart' s request for a $1 million drop in infra structure charges and for the County or the City to input $1 million into the project or they will not be able to go ahead with the project." The Board then voted that the matter should be placed on the Agenda for informational purposes, "as Washburn County does not have monies to fund this request." This week, Washburn County officials did their best to whitewash last month's stories -- and their own board minutes. The County's Executive Committee -- not the full board -- voted to reappraise the land Wal-Mart wants to buy. County Board Chair Micheal Bobin said that rumors of Wal-Mart asking the county and city for $1 million for assistance are just not true."They did not ask [the city or county] to kick in any money," Bobin said. But Bobin's version of what Wal-Mart asked for amounts to the same thing. Bobin said Wal-Mart asked officials to lower the improvement costs by $1 million. The county decided one way to lower costs to Wal-Mart was to reappraise their 35 acres, to see if they could sell it to Wal-Mart cheaper -- the same way a Chinese manufacturer would lower their price to get the contract. The land's original value was $900,000 three years ago, when Wal-Mart approached officials with the deal. When Wal-Mart shows interest in a parcel, the appraised value generally goes up, as well as any commercial land around it. But the county is looking for money to give back to Wal-Mart, and the reappraisal concept is more politically palatable than coming up with money the county does not have. But the end result is the same: taxpayers will lose money if Wal-Mart gets a discount on the land. The county hired an appraiser for $2,000 using a special projects fund -- which amounts to a 'special deal' fund for developers. The county's lawyer said that use of this special fund does not require action from the full county board. But the welfare deal doesn't end there. The city and county are also looking at giving Wal-Mart tax increment financing (TIF), a deal that allows taxes paid by Wal-Mart to go towards the project's infrastructure needs, instead of into the city or county treasury for the taxpayers' benefit. The TIF is basically a tax break that helps write down the cost of site-related work. Officials said Wal-Mart was "more than willing" to pay for all necessary infrastructure costs directly related to the store -- but apparently not the roadwork needed to get cars to the store. Spooner's Mayor Gary Cuskey backs whatever welfare payments are needed to make the deal materialize. The Mayor said newspaper reports of the negotiation with Wal-Mart were full of "misleading and sensationalized newspaper headlines" about the million dollar request. But the citizen's group that has been fighting this proposal since Day One was not confused by the change in terminology. Washburn County First Chair Steve Carlson told The Register that citizens fear that taxpayers will footing the bill for special breaks given to Wal-Mart. "I'm sure that almost every property owner in Washburn County, except those hoping to sell, would like to see a downward reappraisal of their land and home," Carlson said. "We could all use some property tax relief right now. The American taxpayer just bailed out Wall Street to the tune of $700 billion-plus. Now the Washburn County taxpayer has to bail out Wal-Mart's Spooner project? I hope people will let their elected officials know what they think of all this."

What you can do: After years of controversy and delays, Wal-Mart suddenly informs the county that it needs a big infusion of tax dollars to salvage this project. The retailer may feel that the county is desperate enough to sell their land, that Wal-Mart can gain some concessions from them in addition to their "no complete" land agreement. At a Fall gathering of the Washburn County Democrats, State Senator Bob Jauch said Wal-Mart "has set the book for tax abuse." According to the Register, Jauch said Wal-Mart creates a subsidiary where it places a store and charges that store rent, which gets deducted from its state taxes. Jauch said the money then is rerouted back to Wal-Mart. Wisconsin Democrats, however, have included a provision into state legislation that would prohibit companies from using rent as a discount for taxes. "We want to make sure that we don't gouge individual citizens because corporations aren't paying their share," Jauch said. Several weeks later, Wal-Mart unveils this $1 million welfare request. It has been estimated that the road upgrade costs that Wal-Mart will be asked to pay for could reach $4.8 million. The grass-roots citizens group Washburn County First (WCF) formed to get information out to the public about the negative impact this development would have on small town retailers and the county at large. WCF filed a lawsuit against the county for open meetings violations and against the City Board of Alderman for alleged irregularities in granting a variance for the Supercenter with regard to highway access. The county admitted to one count of the open meeting violation, and paid a fine. The city is offering Wal-Mart welfare money to locate in town, putting them in a TIF (tax increment financing) district to offset taxes. Readers are urged to email Micheal Bobin, the Chairman of the Washburn County Board of Supervisors at mbobin@washburn.wi.us with this message: "Dear Chairman Bobin, Wal-Mart has tied up your 35 acres of land for over two years now, with no financial benefit to county taxpayers to show for it -- not even a real estate tax payment. In addition, they are asking you for an unprecedented 'no compete' restriction on taxpayer-owned land. Now they have asked for a $1 million drop in infrastructure costs. You are looking at lowering the value of the land. This is a totally inappropriate request on Wal-Mart's part, given they cleared almost $13 billion in profits for the past year. If a company with that much money cannot stand on their own -- then let the project fall from its own weight. Wal-Mart may be testing the county and the city to see how much they can get out of you -- just like they do with their vendors. Wal-Mart has had ample time to make its move, and for its own internal financial reasons, did nothing with this project for months -- even suggesting that the project might never come to fruition. It's time to draw the line. Supervisor Mackie is right: 'this land has been held hostage, and its time to set it free.' No corporate welfare for Wal-Mart. They are trying to get their land at a discount price -- but if lower their appraisal, how are you going to look your local merchants in the eye? Are you going to give them all a tax break too -- or are the special deals only available to the wealthiest companies?"










 
 
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