Back when I was covering land-use issues in the suburbs, we used to write the same story every week: A Jewel, or a Wal-Mart, or a Target, or somebody representing one of the many big-box stores in the area would propose a giant strip mall, and ask that taxes be reduced because this exciting new development — totally different from the other 40 CVS-dry cleaner-nail salon developments within driving distance — would EVENTUALLY provide incredible vitality and jobs to the town on which it so generously bestowed itself.
The town fathers would then fall all over themselves to argue that they MUST prove they loved said development more than the next craphole over, and give bigger tax breaks than they anticipated would be offered by said craphole.
(The school districts, natch, were silent on the matter.)
Marquette has been hit hard by a tactic that the country’s biggest retailers are using to slash their property taxes. Known as the “dark store” method, it exemplifies the systematic way that these chains extract money from local governments. It’s also the latest example of the way that, even as local governments across the country continue to bend over backwards to attract and accommodate big-box development, these stores are consistently a terrible deal for the towns and cities where they locate.
Marquette is one of the countless places that has bought into big-box economic development. Over the years, the township in the Upper Peninsula of Michigan spent millions extending water mains, law enforcement, and other infrastructure and services to its big-box commercial corridor along U.S. 41. When the Lowe’s opened there in 2008, local officials including the mayor turned out for a “board-cutting” ceremony—the home improvement center version of a ribbon-cutting.
Then, less than two years later, Lowe’s flipped the script. The mega-retailer, which reports annual net sales of about $50 billion, went to tax court to appeal its property tax assessment. Marquette had pegged the taxable value of the store, which had just been built for $10 million, at $5.2 million. In front of the Michigan Tax Tribunal, an administrative court whose members are appointed by the state governor, Lowe’s won assessments that were, instead, $2.4 million in 2010, $2 million in 2011, and $1.5 million in 2012.
So less money goes to the schools, the libraries, the towns that shelled out infrastructure improvements and tax “incentives” and everybody just wonders how the whole world went broke all of a sudden. It must have just happened on its own!