In PlanCOS, the city’s comprehensive plan that received final approval from city council in January, Mayor John Suthers states in the introduction, “The PlanCOS Comprehensive Plan positions Colorado Springs to take full advantage of its economic opportunities to create and maintain the very best places to live, do business and experience the enhanced quality of life that comes with being part of a forward-thinking, growing and engaged city.”
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.
The special tax ordinance was approved Feb. 26, with councilors Andy Pico and Bill Murray the only dissenting votes.
SCHEELS is expected to invest $84 million in land at InterQuest Marketplace, the building and necessary furnishings and equipment. The retailer has projected it will bring in $53 million in net new city tax revenue over 25 years beyond the subsidy. The company states 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, SCHEELS has claimed the average salary at the new location for direct, permanent jobs will be more than $46,000. It’s a respectable number. The problem is, that’s an average and this is a retail location, meaning the majority of employees will be stocking shelves, cleaning the store, running the cash registers and manning SCHEELS’ signature Ferris wheel.
Most positions will be making around minimum wage.
Many would argue these are jobs for high school kids. The problem is, SCHEELS will be open year-round and will need to staff accordingly. Working adults will be filling these positions. But 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. These workers will likely have to commute.
It also seems the city is struggling a bit with semantics.
Case in point: The city’s 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. That’s $16 million that we do not have today.”
It’s a verbal shell game. Any way you look at it, 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?
Speaking of green, 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 Bass Pro Shops, REI, Dick’s Sporting Goods and the locally owned sporting goods retailers already doing business in the city.
And that brings us to the final point.
Cope told council earlier this month 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 as more than one social media commentator has pointed out, SCHEELS isn’t a novel idea along the Front Range. These mega-outfitters are quickly carving out a disproportionate niche from Woodmen Road to Northgate Boulevard — about 9 miles apart.
So the question is: What sort of community do we really want, and do more and 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 and put Colorado Springs on the map. But not because of 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 wanted and needed — and that they provide this community with some actual nutritional value.