Tuesday, May 22, 2007
Why I Voted "NO" on the 350 Highway Walmart Project
Tuesday night’s Board of Aldermen meeting was a milestone of sorts for Raytown. The Board, by a vote of 9 to 1, to go deep into debt for 23 years to the tune of $31,980,293.00 (yes, 31 MILLION dollars) to guarantee a Walmart would locate a new super center on 350 Highway. – I was the lone “no” vote on the package. There are very good reasons why. First, let me say for the record that I am not a Walmart hater. I don’t hold them in the highest esteem either. But I do believe in capitalism. And, that in a free capitalistic system the rules are such that prosperity and growth are not signs of evil. If people do not agree with how someone conducts their business, they can vote with their feet and refuse to shop at Walmart. Some do just that. But the simple fact is that most do not. Nope, my reason for voting against the 350 Walmart Development is two-fold. Most people are not aware that once the project is up and running that it is predicted to fall far short of returning anything on the money invested – period. Not in one year, not in 23 years. TIF packages come with a tax increase. At the end of the day the tax increase for this particular Raytown TIF is nearly 1%. Typically, one-half of the tax increase goes to development – the parking lot, the building, the sewers, etc., etc., etc. The other half, often referred to as the “bottom end”, of the tax increase goes to the City. In the case of the Raytown Walmart TIF – ALL of the bottom end goes to the Walmart development. The reason for disparity is the Raytown School District. They are in the catbird seat. They own the land needed for the development. This drove the cost of the project from something feasible to something that resembles more of an economic black hole. The city’s only hope of a gain is in some nebulous plans of future development. A theory that is long on Pollyannaish talk of this developer moving in here and that one over there. But the reality is that no such plans exist except in “blue sky” talk. But that is not the main reason for my “no” votes on the seven pieces of legislation this evening. The city, in an effort to make the “deal” work has made a conscious decision to indemnify the bond holders investments for the full 23 year term of the bonds offered to finance the project. In short, the taxpayer is guaranteeing that the bondholders will be paid in full – no matter what. That means that if Walmart does not meet the expected sales targets for the new store, the money needed to pay the bonds from the tax revenue will come directly from the city’s coffers. In other words, the Board of Aldermen have put at risk tax dollars you and I pay to maintain our streets, sewers, policemen, ambulance service, etc., etc., etc. If the economy takes a nose-dive into a recession, if gasoline prices spike and cause an economic upheaval – our tax dollars are guaranteed to make certain that the shortfall at the local Walmart will be made up from the general revenue of the city. That is a line I refused to cross tonight. It is why I voted “no” this evening on the 350 Highway Walmart.