Thursday, October 21, 2010

Kohl's--Part 3: The next logical step

This past Monday night, the Rolla City Council approved the tax increment financing ordinance that was needed to step up the negotiations with Kohl's Corporation and, perhaps, ultimately bring a Kohl's department store to Rolla.

As I have explained in previous "That's What I Think" columns, Kohl's--Part 1 and Kohl's--Part 2, this seems to me to be a new way of drawing retail business to a community.

It used to be that communities would give incentives to manufacturing companies. Communities like Rolla would waive property taxes, cut the price for electricity, offer cheap (or free) land and buildings just to get a company to put a factory in the town and put some people to work.

The politicians have exported our factories to China or other foreign countries, and cities looking for ways to put people to work are scrambling for retail stores. One city councilman, Louis Magdits, was quoted in the Rolla Daily News about how hopeful he was that the city could bring Kohl's Corporation's 120 jobs to Rolla.

The possibility of Kohl's here is about shopping for most residents, but it's about jobs for at least one councilman.

So why not go all the way? With Kohl's, we're dipping our toes into the lake of public funding of private business. If offering a major subsidy to Kohl's is the right thing to do to bring jobs to Rolla, why not try something even bigger? Let's just go ahead and jump head first into that public-private lake. Why not ask the voters to approve a bond issue to build a shopping mall and fund it with sales tax receipts and property tax rebates just like we're doing for Kohl's?

The city would have to line up tenants for the mall before construction would start, to assure having sales tax. I don't know if that's possible, but it's something to think about as we search for more retail jobs and more options for shopping.

Monday, October 18, 2010

Sunday's special music at church

Here's the song Pastor Dave sang at Macedonia Baptist Church this morning, I Will Pilot Thee:

No, that isn't a recording of Pastor Dave. It's an old recording of the same song.

Thursday, October 14, 2010

Kohl's--Part 2: Assuring us of the right to shop

Rolla’s elected officials and the city staff members they hire often show their ability to solve problems and work toward goals creatively.

Such is the case with the Kohl’s financing plan that was recommended by the TIF Commission to the Rolla City Council Oct. 4.

Recapping, here’s the deal: Kohl’s says it needs $7,695,500 to develop a property for a store. The Fortune 500 company has asked the city to subsidize that by $3,300,000. In essence, Kohl’s will lend the city that money, and asks that it be repaid over a term of 23 years, although it could be paid back sooner.

Kohl’s wants only 6 percent interest, so the cost will be another mere $3.2 million.

To pay the principal and interest, which could be as much as $6.5 million, the city will use a combinaton of sales tax generated by the new store, plus the real estate tax on the property Kohl’s wants, which is next to Lowe’s and is visible from the interstate.

As you might expect, this arrangement startles the sensibilities of an old coot like me. I’m accustomed to thinking private businesses identify markets into which they want to expand, then risk some money to build a store and then work hard to make it profitable, all the while paying taxes that help finance the construction and maintenance of streets that lead to the store, assure police and fire protection of the store’s investment and educate children of the community, some of whom might work there.

Having a national company come into the communty and demand to be helped financially, then lend the money to the city so that financial help can be extended, then charge interest on that loan all makes this old hillbilly’s head spin and jaw slacken.

Moreover, I suppose the Kohl’s store also will charge as much as the market will bear for its goods, so shoppers will be paying taxes that will go to Kohl’s, as well as paying prices that will go to Kohl’s.

Don’t mistake my confusion for negativity, though.

I’ve done some research and some questioning and some listening and I’ve learned the vast majority of Rolla residents are eager to shell out that money for Kohl’s.They want it now.

Kohl’s supporters have assured me that we need a Kohl’s store for these beneficial reasons:

1. It will keep people from traveling to St. Louis to shop. With a Kohl’s here,
there will never be a need to drive up to a mall. Money will stay in Rolla.

2. It will attract people from surrounding communities to shop in Rolla. With a
Kohl’s here, those people who had been driving to St. Louis will always drive to
Rolla instead. Money will flow to Rolla.

3. Having a Kohl’s here will attract other national chain stores to Rolla, and national chains are more important than homegrown local businesses because they have name recognition and will attract new residents here so that our population wlll grow and we can attract even more national chain stores for quality shopping.

4. Having a Kohl’s here will give our community a sense of pride, something we sorely lack now because “there’s nothing here.” With Kohl’s here, we’ll finally know that our city is special.

These four benefits have been communicated to me by others; I did not think them
up myself, so please do not give me the credit or the blame. These were told to me by people
who say they’re willing to pay any price to bring a Kohl’s store to Rolla.

And that willingness of Rolla residents to sacrifice and pay any price to obtain important new shopping opportunities is important to consider, honor and respect. It is why I wholeheartedly support the financing plan. I welcome the new economic age. I hope the City Council will move quickly to set in motion whatever it takes to bring Kohl’s to Rolla.

This plan will protect people’s right to shop.--RDH

Monday, October 11, 2010

Tommy tugs at the heart

Here's another good ad from Tommy Sowers. It says very little, but it carries a lot of emotional impact, and that's all that really matters in an election. Voters don't use their heads when they vote, they use their feelings.

I think voters will feel like voting for Tommy when they see this one because in the ad he's clearly a country boy, who has access to a lot of manure to put in his pick-up truck. Everybody loves a farm boy who works so hard that his truck is usually dirty.

The pictures of Jo Ann Emerson that he uses in this ad are unflattering and make her look like a hag. No one wants a hag in Washington.

And firing off a round at the end of the ad will also stir the emotions of gun lovers throughout the Eighth District.

I still think he has a good chance of winning, although I'm not so confident about him as I was when I made an earlier prediction that he would win. I'm not going to rescind that prediction YET, for I think the electorate is in an anti-incumbent mood, not just an anti-Democrat mood.

The series of four debates will make a difference. WHAT he says doesn't matter. What matters is HOW he says it, how he LOOKS and SOUNDS while saying it, compared to how Mrs. Emerson looks and sounds. The first debate will be held at Southeast Missouri State University in Cape Girardeau tonight.

I wonder if he'll park his truckload of manure in front of the lecture hall?

Saturday, October 9, 2010

Celebrating with a drum

These young people were in the Celebration of Nations parade and also in the International Idol contest.

The drummer electrified the crowd.

I want a camel ...

... instead of a goat, now that I've seen camels up close in the Celebration of Nations parade and festival.

That big celebration of our diversity and multi-cultural community was held today. Thanks to Missouri S & T for the event.

What I really liked most about the day were the camels.

I've wanted a goat or two in my backyard for several years, but my wife won't let me get one, so two is out of the question.

The city probably won't let me have a camel--unless I can convince the authorities that my camel is a large dog.

I like the looks of camels. They are quite haughty looking. Very condescending, don't you agree.

Here are two of them in a parade being led by handlers.

Do they have camel races in the Middle East, as we have horse races here? It looks like riding them, especially at a fast pace, would be uncomfortable for a jockey.

I recall reading that back in the 19th Century, someone tried to bring camels to the Southwest U.S. to use as pack animals and cavalry mounts. It didn't work out. Probably because riding them was uncomfortable.

Here's another one in the parade:

Very haughty, indeed, don't you think?

Here they are resting after the parade:

And, here is my lovely wife petting one of the camels:

Sometimes I like to think about Jesus as Johnny Cash...

...loving people and making them feel better, surrounded by 12 disciples who look, talk, sing and act like (well, to a point, anyway) Willie Nelson, Merle Haggard, Waylon Jennings, Hank Williams Sr., Tom T. Hall, Charley Pride, Alan Jackson, Lester Flatt, Earl Scruggs, Bill Monroe, Lefty Frizzell,
...and, of course, the evil betrayer, Kenny Chesney.

Friday, October 8, 2010

Kohl's --Part I: What has happened to captalism?

First, let’s look at some key numbers and hope they don’t make our heads swim.

$7,695,500 is the amount Kohl’s says it needs to spend to develop a property in Rolla. I suppose that means they’re going to use that money to buy land, build a store building, lay down a parking lot, put up lights and plant a landscape.

$3,300,000 is the amount Kohl’s wants the City of Rolla to kick in as a subsidy.

23 years is the length of time Kohl’s has given the taxpayers to come up with that $3.3 million.

6 percent is the interest rate Kohl’s will charge the taxpayers as we work to make the payments on that $3.3 million .

And finally, approximately $3,200,000 is the amount of interest we’ll pay over the course of 23 years as we pay back that $3.3 million.

That means we'll pay Kohl's $6.5 million over 23 years.

Is your head swimming? Have your eyes rolled back in your head yet?

I felt like my eyes were doing just that at the Oct. 4 TIF Commission meeting, as new revelation after new revelation unfolded during the public hearing.

Bear with me as I try to explain this to the best of my ability and understanding.

Kohl’s, a Fortune 500 company, wants to expand and make more money for its shareholders, as any good American capitalist company should. To do that, it is asking the city government of Rolla to subsidize its investment. That sounds like the opposite of capitalism.

I learned some things at the public hearing.

Chester Kojro, who lives north of Doolittle so his opinion likely won’t be heeded since he’s an out-of-towner, asked a good question, I thought.

“What is the cost of land aquisition?” he asked, and we learned that it is $1.1 million.

Kojro then followed up with questions about the current owner, the previous owner, previous prices for that land and the real estate agent.

“Who’s making how much money on this land?” Kojro asked. “Taxpayers are going to pay so somebody can make a killing.”

The commissioners didn’t have the answers to that, or wouldn’t say if they knew.

Bob Stewart, who has lived here for more than 50 years and said he has seen businesses come and go, asked, “Why do we need to subsidize them to compete with what we already have?”

There was no answer from the commissioners.

Pamela K. Grow, who described herself as a 20-plus year resident, asked how the subsidy of Kohl’s could be construed as fair. She also opened up a can of worms when she asked about what she perceived as the waiving of the real estate tax for Kohl’s.

Mark Grimm, special counsel for the city, explained that in addition to capturing 50 percent of the sales tax it generations, Kohl’s will also capture 100 percent of the new real property tax. He explained that it works this way:

The property, currently undeveloped, has an assessed valuation. After the Kohl’s-City of Rolla partnership develops the land, it will be reassessed by Phelps County Assessor Kevin Ramussen.
Kohl’s will pay real estate taxes each year based on that new assessed valuation, but it will get back every dollar over the amount of tax based on the old assessed valuation, that is, the assessed valuation for the undeveloped land. that arrangement will continue through the term of the agreement, all 23 years if necessary.

That money--half the sales tax and all the new real estate tax, as mentioned--will be used to pay the city’s $3.3 million obligation, plus the interest.

Ah, the interest. I didn’t know the city would be paying interest, until Councilman Gary Hicks asked how much the interest rate would be.

It turns out the interest rate will be 6 percent, about $3.2 million.

So, the city could pay $6.5 million to Kohl’s over the next 23 years.

In a nutshell, here’s essentially how this business arrangement is going to work, as I see it.

Kohl’s, using the law allowing TIF, has dangled a golden plum before the city. To get that prize, though, the city must pay for it. Kohl’s is willing to lend the money to the city, at interest. The city seems eager to accept this agreement because it believes it can “pay the money back” to Kohl’s with new sales tax money and new real estate tax proceeds. It won’t really cost us anything, because it’s a win-win situation, as our civic leaders like to tell us.

Most Rolla residents, very likely you, dear reader, agree with the city leaders and will be glad to see tax money used to bring more shopping (who can be against shopping?) to Rolla.

I wonder what local businesses who built their stores themselves think about this. I wonder what future Rolla businesses will expect.

I wonder what has happened to American capitalism.