Surviving the big box
RIFLE – The opening of a Wal-Mart Supercenter in Rifle has been one of the best things to happen to that small, Western Slope town in a long time, Rifle businesswoman June Renfro said.Renfro heads the local chamber of commerce and thus keeps close tabs on the local business scene, which she said has been thriving since the retail giant opened its doors in October 2003.”Wal-Mart has been wonderful,” Renfro said. “It has really increased business in the area. I have heard nothing but good things. Downtown, it seems you can hardly find a parking place from 11 a.m. to 1:30 p.m.”Forty miles to the east of Rifle’s now-bustling downtown, Carbondale is vigorously fighting a developer’s efforts to plunk a 252,000-square-foot big box development on the edge of town.”What it boils down to is that we want to preserve the character, scale and uniqueness of Carbondale,” said Laurie Loeb, spokeswoman for the Town Mothers, a group of citizens that has led the grassroots charge against the proposed development.A 20-minute drive north from Carbondale (past a Wal-Mart) leads to the office of Glenwood Springs finance director Mike Harman, who examines the city’s sales tax revenues, which have dropped 4 percent since Rifle’s Wal-Mart Supercenter opened last year.”We put a freeze on hiring,” Harman said. “It’s been tough at times, but we’ve muddled through it. You just have to work it out by spreading the workload around.”Sixty miles east of Glenwood Springs, Judy Gifford is working hard to turn a profit at her Vail Valley Ace Hardware store, as she competes with home improvement behemoth The Home Depot in Avon.”Everybody here works hard to survive,” Gifford said. “When companies as big as the big boxes come into town, they impact a lot of small, locally owned businesses like ours.”Along the Interstate 70 corridor, the feelings about big box retailers among residents, municipalities and businesses are as varied as the selection of throw-pillows in Target’s home decor aisle. And there is no consensus on the impact the large, national chain stores have on Main Street.In communities across the country, critics see big boxes as the Grim Reaper looming over America’s downtowns. Many of Colorado’s Main Streets are still alive and well, but some wonder how long they’ll last as the likes of Wal-Mart and The Home Depot continue to grow. And even if the two commercial models can coexist, many lament the large stores’ impact to the visual landscape of their quaint mountain towns.Others argue that those big stores provide convenience and value to residents and that their regional pull actually helps feed downtown businesses with out-of-town shoppers.
They assert that a little creativity on the part of small, independent retailers will keep the downtown economic engine turning.Downtown competitors or complements?Competing with a big box is no small task for an independent business owner, as Gifford can attest. The low prices, large selections, huge advertising budgets and brand-name recognition of the big retailers can threaten the survival of smaller independents.Maureen Keefe, owner of Winds of Change bookstore on Main Street in Frisco saw her profits pinched when the Borders bookstore and Target moved into Summit County.”Traffic has been down drastically since 9/11,” Keefe said. “I had competition hit on top of the economy crashing. I think we’re all struggling. I’m in survival mode.”Eagle Valley Chamber of Commerce director Tim Cochrane, who has been studying the impacts of big boxes on local economies, has concluded that direct competition with a retail titan is indeed a losing battle.”There definitely is life after Wal-Mart,” Cochrane said. “But it’s not the same as you have before the big box comes. If you’re selling boys’ underwear today, and Wal-Mart’s coming tomorrow, you’ll go out of business. There’s no way around it.”Cochrane recently witnessed Eagle’s last music store surrender at the mere prospect of a new large-scale retail development in the area.”Their lease was up, and they said, ‘We can’t compete with the way Wal-Mart sells CDs. We’ll just close the doors,'” Cochrane said.However, Cochrane emphasized that there are opportunities for success, even when big boxes enter the scene.”If you can discover what people want that Wal-Mart is not supplying – very distinct, one-of-a-kind furnishing items to accessorize your home – Wal-Mart is not going to touch that,” Cochrane said.Cochrane has concluded from his research that 15 to 20 percent of big-box shoppers will seek out quaint, historic downtown areas, once they’ve picked up their paper towels and shaving cream at Target.”If you have fine gifts intermingled with excellent restaurants and a place to have an espresso, especially if you can tie into something historical, people will want to go there. But they’re still going to buy their underwear at Wal-Mart,” he said.
Rifle’s Wal-Mart Supercenter has drawn shoppers from surrounding areas, including Meeker, Silt, New Castle and Battlement Mesa, Renfro said.”It’s bringing in a lot of people, and we have a lot of new businesses moving in because of it. The growth here has been absolutely wonderful,” Renfro said.Small-town charm vs. “Anywhere, USA”There are those in Colorado’s High Country who are less concerned about the economic impacts – positive or negative – of big boxes.They fear that one day they’ll round the corner of their historic Main Street and bump into something as snoringly ubiquitous as a Chili’s nestled between a Best Buy and a Costco, rising up to obscure treasured mountain views.Such were the worries in Carbondale, where a California developer purchased commercially zoned land on the highway at the edge of town with the intention of building a large-scale shopping center.After a year of acrimonious public meetings and debate, the Carbondale Board of Trustees approved the project, to the dismay of many Carbondale citizens. The Town Mothers started a referendum campaign to bring the big box to the ballot box.”They had a very clever campaign involving clothespins and aprons – the criticism being that the ‘town fathers’ have screwed this up,” said Carbondale Mayor Michael Hassig.”This town is at the confluence of two rivers at the base of a 13,000-foot mountain,” said Loeb of the Town Mothers. “There is a Wal-Mart 13 miles away in Glenwood. We didn’t think it was worth it to compromise the safety and tranquility we enjoy here. This town is very well known for its arts, natural beauty and recreation.”We should capitalize on our assets rather than just go the generic way of commercial retail that seems to be sweeping the country,” Loeb added.The development’s opponents prevailed 57 percent to 43 percent at the polls last summer, but the developer has taken his fight into the courts, where he’s still battling to build.”It was quite divisive,” Hassig said. “Sometimes we like to pretend that we live in a mountain paradise, but the same kind of deep divisions that run through the rest of the country have their own manifestations at the community level. At some point, it’s less about specifics than world view.”A similar debate flared up in Frisco several months ago when a Denver-area developer proposed a 130,000-square-foot shopping center with six midsize national retailers, similar in scale to Bed Bath & Beyond, on a parcel of town-owned land.
The developer estimated the project would have generated about $1 million annually in sales tax revenue for the town.”So many communities are becoming so homogenized,” said Frisco resident Katie Wilson. “In 25 years when every other exit off I-70 looks the same, how will we differentiate ourselves? When people come to visit a place for a vacation, they’re not coming to visit chain stores they see every day in their own community.”A handful of Frisco residents and business owners argued that small-town charm loses its luster when locals don’t have easy access to affordable household staples big chains provide.”Yes, we have a nice Main Street,” said Frisco resident Andy Gentry. “But if you want younger couples with young kids to move here, you have to have things they can afford. We can’t afford to spend $250 for a wind chime.”In response to citizens’ concerns over the proposal, the Frisco council halted negotiations with the developer in June and commissioned a study to examine the impacts of a half dozen development scenarios for the site. The results have not yet been released.Cannibalism and community developmentFor towns struggling to provide a high level of services, especially in a sluggish economy, luring big-box cash cows into the sales tax revenue fold can be an attractive option. In municipalities with tourism-based economies, the pressure is especially heavy, as towns compete to provide top-notch amenities and ambiance.When the Rifle Wal-Mart Supercenter opened, the city’s sales tax revenues jumped by about $100,000 per month.”We’ve had such a pent-up demand for services, and now we’re trying to get ourselves caught up,” said Rifle finance director Nancy Black. “We had depleted our reserves to close to nothing. (Revenues from Wal-Mart sales) have been able to help us sustain our level of service expected by the community.”When a municipality brings in a big box, however, it’s likely to be at the expense of neighbors’ sales tax revenues, as was the case for Glenwood Springs when the Rifle Wal-Mart opened.”The first couple of months last year we were down 10 percent each month,” said Harman, Glenwood’s finance director. “We had to hold back on some of our street improvement projects; we had to scale back some infrastructure on water and sewer.”But the tide may shift back in Glenwood Springs’ favor next year: A developer broke ground last month on a development there that will house a Target and a Lowe’s Home Improvement store.
A community’s successful wooing of a big box often requires a dowry in the form of substantial sales tax rebates. Consequently, town coffers don’t reap the benefits until the store has been open several years, in many cases.”It takes money to make money, and you’ve got to take the long run into account,” said Silverthorne finance director Donna Braun. Silverthorne gave its new Target significant tax breaks.In the late 1990s, Avon agreed to rebate 100 percent of the sales tax generated by its new Wal-Mart Supercenter and The Home Depot. The developer will continue to receive the funds for about 20 years – as long as it takes for him to repay the revenue bonds that funded the development’s infrastructure.”We had our hands tied a little bit,” said former Avon councilmember Judy Yoder. “It was county land, and we wanted to annex it. We had the threat of (the developer) going back to the county.”So, the town came to the negotiating table with 20 years of tax rebates in the interest of reaping eventual rewards, rather than seeing revenues slip away for good by sending the developer running to the county for approval before annexation.”In hindsight, we probably should have tried to work a better deal,” Yoder said.In 1998, the Dillon enticed City Market away from Silverthorne with a five-year tax break. State Rep. Gary Lindstrom, D-Summit, considered Dillon’s maneuver a Pyrrhic victory.”I couldn’t believe some of the things that Dillon agreed to,” the former Summit County commissioner said. “And the ones that lose are the citizens.”Silverthorne’s annual revenues dropped by $800,000 to $1 million when the grocery store moved.”As a community, it would be nice if we stopped having sales tax wars,” said Summit County Commissioner Bill Wallace. “We could decide as a community what we need and where it should go. If we decide we want a Home Depot, is it really that much of a pain to say, ‘Gee, where’s the best place to put it?'”In March 2003, Silverthorne’s new Target opened, boosting the town’s sales 2003 tax revenues by $225,000 over 2002, even though the town rebates a portion back to Target.The new store drew business from Wal-Mart in Frisco, where town sales tax revenues in 2003 were 15 percent lower than the previous year’s.Now, Silverthorne’s added cash is helping the town catch up on infrastructure projects and is fueling some preliminary economic development efforts geared toward revamping its core to create a downtown focus.”We’re trying to get caught up on some expensive infrastructure items. (Eventually), we want to create a community-friendly area along the river for people to visit with neighbors and friends,” Braun said. “That is a high priority for the town. If we’re going to be putting money anywhere, that’s where it would be going.”Julie Sutor can be reached at (970) 668-3998, ext. 203, or at firstname.lastname@example.org.
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