Bridgeton, MO. City Council Gives Billionaire Walton-In-Law A Bailout
On July 7, 2010, one of the richest people in America was given millions in public welfare to build an unnecessary Wal-Mart. This "bailout for Billionaires" was the work of the Bridgeton, Missouri City Council, where economic illiteracy trumps common sense.
Developer Enos Stanley Kroenke, sports mogul, Walton family son-in-law, and sprawl-developer, was actually paid more than $7 million in public funds to bring low-wage jobs to this community which describes itself as the "strong and viable economic engine for the St. Louis metropolitan area."
As a result of public subsidy, Kroenke's development company, THF Realty (the "THF" stands for "To Have Fun") will build a new Wal-Mart roughly two miles away from an existing, smaller Wal-Mart on the same road. The smaller store will close -- leaving another "dark store" by the roadside.
The Bridgeton City Council voted 6-1 to pay Kroenke to leave them with an empty Wal-Mart. Only one city councilor dissented, arguing that Wal-Mart should have to pay its own way, and not be subsidized. The development agreement with Kroenke also allows the city to use eminent domain powers if necessary to complete the project.
This tax bailout came over the objection of officials in St. Louis County. A state-mandated TIF Commission recently voted 6-6 on the TIF plan -- with all six St. Louis County appointees on the commission voting against the bailout. A tie vote rejected the TIF. The city was able to overturn the TIF Commission with a supermajority vote of its members.
The Mayor of Bridgeton, Conrad Bowers, warned that if Wal-Mart and Kroenke were not given what they asked for -- Wal-Mart would leave Bridgeton entirely, dragging with it a million dollars in tax revenue from its "old" store just minutes down the road. "We got the best deal for the city we could get," the Mayor told the St. Louis Post-Dispatch.
But it is Kroenke who got the best deal. Kroenke inherited a fortune in Wal-Mart stock when he married the daughter of Sam Walton's deceased brother Bud. Kroenek's wife, Ann Walton Kroenke is one of the richest women in America, with an inheritance valued at $2.6 billion. Kroenke owns the Denver Nuggets basketball team, hockey's Colorado Avalanche, is part owner of the St. Louis Rams and the English soccer team Arsenal. He was the 117th richest American, with an estimated worth of $2.7 billion in 2009. He could have built a new Bridgeton Wal-Mart without one penny of Tax Increment Financing, but the money was there for the taking.
There are 19 Wal-Marts within 25 miles of Bridgeton, including a Wal-Mart right on the border of Bridgeton and St. Ann, and 7 miles away in St. Charles, Missouri. Bridgeton is a city that has been losing population. Compared to 1990, the population in Bridgeton has dropped 15%. The answer to the city's economic stagnation is not to build more retail stores that make nothing, and sell Chinese everythings.
THF Realty of St. Louis, was founded in 1991. It owns 100 properties comprising more than 20 million square feet of leaseable area in 23 states. A concentration of THF properties exists in Missouri, Illinois, Pennsylvania and West Virginia. The company says its mission is to be the "best private developer in America."
Over the years, Kroenke and THF have been at the center of many controversial Wal-Mart developments in places like St. Peters, Columbia, High Ridge, Maplewood, and North St. Louis County, Missouri, as well as Glen Carbon, Illinois, Wheeling, West Virginia, and Buffalo, Minnesota.
Add officials in neighboring St. Ann, Missouri to that list. Part of the "older" Wal-Mart store sits on the border of St. Ann and Bridgeton -- so it is a partial source of sales tax revenue for St. Ann. The "old" Wal-Mart initially was entirely within Bridgeton -- but when Wal-Mart sought to expand it, the store's footprint expanded into St. Ann. Officials from St. Ann warn that their city will lose a major sales tax source if the 'old' Wal-Mart shuts down. St. Ann gets a 10% slice of the sales tax revenue generated by the current Wal-Mart.
Mayor Bowers said the supercenter would not happen without TIF money because of the site's demolition costs -- which the city failed to get from the former property owners. So now the Mayor wants taxpayers to pay for it. The $7.2 million in sales and property taxes that will be given back to the billionaire developer in the form of site infrastructure costs, is money the taxpayers will never get to help pay for the on-going police and fire protection that this new superstore will demand.
But Charles Dooley, a St. Louis County Executive said the Mayor and council should "stand together and protect the public from these strong-arm tactics" by Wal-Mart. One radio stations said Wal-Mart had "bullied" the Mayor into supporting the welfare subsidy for THF.
The United Food and Commercial Workers (UFCW) Local 655 testified against the new Wal-Mart and the welfare deal for Kroenke. "We have numerous concerned members here who live in Bridgeton," a UFCW official told the Post Dispatch. "Giving $7.2 million in tax dollars to the richest corporation in America... ..It doesn't make sense we rezone and bow down" to Wal-Mart.
What you can do: There are six dead Wal-Marts in Missouri today. The company had to demolish its store in Blue Springs, Missouri. But stores in House Springs, Kansas City, Maryville, Raytown, and Town & Country, are all still up for sale. The dead store in Town & Country, at 154,453 s.f., is almost as big as the proposed supercenter in Bridgeton.
Even though Mayor Bowers thinks this TIF deal is "a correct use," the readers of the Dispatch saw through the ruse. "If building the supercenter will be such a good deal for Wal-Mart, why don't they finance the project instead of begging the customers to build it? TIF has become the de facto standard for construction retail projects in the St. Louis area. It doesn't create tax base, it shifts it around, postponing its effectiveness for a decade or more."
Another reader wrote: "Does Bridgeton realize that tax revenue from Schnucks, Target, Kmart and Best Buy will drop when Wal-Mart moves in? There won't be this huge net gain."
A third reader noted: "How could this possibly help stores that compete against Wal-Mart, that don't get the benefit of TIF? This shows exactly how TIFs are being used in ridiculous ways. Stores pit one city vs. another -- opening one store to close another. The net result in taxes on a regional scale is minimal as the new stores simply cannibalize others in the area -- but individual cities are hurt by the loss of stores and/or the reduced taxes they bring in as the money is diverted to developers."
Another commenter said: "Many people for TIF's say it's a long term benefit for an area and helps create jobs, construction, etc. These TIF's help to eliminate competition as I got a special deal where you didn't, so I can charge lower prices and still make a profit and you can't -- putting you out of business. It's not fair competition unless all similar businesses also get a TIF, which is why I'm against all TIF's in the first place. If taxpayers get to keep their own money instead of it going to private projects, that's a long term gain and will also result in created jobs and businesses as now people have more money to spend and it will be a more free market and efficient use of funds. Eliminating TIF's would mean these funds are spread out over all taxpayers rather than just benefiting one corporation. Therefore, TIF's should be eliminated as they are, once again, legal robbery of the taxpayer."
Readers are urged to contact Bridgeton Mayor Conrad Bowers by emailing the city's Administrator at: email@example.com with the following message: "Dear Mayor Bowers, Your small city, with its declining population, already has 19 Wal-Marts within 25 miles of your city hall office. Your residents have plenty of discount stores to get their cheap Chinese products. The merchants who will be most affected by this superstore will be grocers like Schnuck's or Royal Food. THF may have convinced you this is an economic development project -- but its not. It's just about shifting market share from existing merchants -- including Wal-Mart's own discount store.
Rather than create new jobs and new revenues, a Wal-Mart superstore will simply transfer sales from stores already in business. Many of your constituents realize that THF has the financial wherewithal to build this project without a government bailout.
If Wal-Mart cannot use an existing store at 120,000 s.f. to reformat into a supercenter, make them use their own money for this new project, and don't rob the taxpayers of $8 million to pay a billionaire's bill.
Your vote this week was a welfare bailout, pure and simple, and the public if fed up with bail outs for billionaires."