Surviving the big box
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 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 east of Rifle’s now-bustling downtown, Carbondale has vigorously fought 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 grass-roots charge.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 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.”Throughout the Interstate 70 corridor, feelings about big-box retailers 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.Many of Colorado’s main streets are 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’ visual impact on their quaint mountain towns.Others argue that the 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. The low prices, large selections, huge advertising budgets and brand-name recognition of the big retailers can threaten the survival of smaller independents. 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 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.”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. “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.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. For these folks, it’s a character issue.In Aspen, for example, the city has in place a square-footage limit that prevents a huge retail establishment from locating in town.No such law existed 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. A group called the Town Mothers started a referendum campaign to bring the big box to the ballot box.
“This town is at the confluence of two rivers at the base of a 13,000-foot mountain,” said Town Mothers’ Loeb. “There is a Wal-Mart 13 miles away in Glenwood.”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.A similar debate flared up in Frisco recently 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?”But other Frisco residents and business owners argued that small-town charm loses its luster when locals don’t have easy access to affordable household staples that big chains provide.”If you want younger couples with young kids to move here, you have to have things they can afford,” said Frisco resident Andy Gentry.In response to citizens’ concerns, the Frisco council halted negotiations with the developer and commissioned a study on various development scenarios for the site.
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 neighboring towns’ tax revenues, as Glenwood Springs discovered 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 is now grading huge building pads west of town for 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 sales tax rebates. So 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 Donna Braun, finance director for Silverthorne, which gave its new Target significant tax breaks.In 1998, Dillon enticed City Market away from Silverthorne with a five-year tax break. 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 email@example.com
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