Steamboat Springs An article about the Steamboat 700 project recently contained a statement that has been repeated several times in various articles concerning future growth of our community. It said, "City planners recommend big box retail be accommodated in West Steamboat with conditions," and they noted an economic study that predicted a store such as Target or Lowe's would increase the city's sales tax revenue by $1.1 million.
What has not been reported are any studies showing exactly what percentage of that presumed $1.1 million actually will be new sales tax as opposed to what percentage of that sales tax will be cannibalized from existing businesses in our community. That dollar amount needs to be subtracted from the estimated $1.1 million to reach a realistic net increase in potential sales tax revenues, which some in our community continuously salivate over without any thought of net impact to our existing friends, neighbors, businesses and community character.
There also are questions about the potential for new job creation and keeping the money in Steamboat. How many new jobs would be created by the existence of a new "big box" retail at the expense of jobs lost because of the economic damage done to local retail businesses? We know that some residents do make trips to Silverthorne or Denver just to shop. But a "big box" retail outlet here won't accommodate everyone's desires. People still will go to Denver for other reasons and most likely will do some shopping while they are there. So, it only stands to reason that not all of the money currently lost to Silverthorne or Denver would stay here in Steamboat.
When reading about the benefits of "big box" stores, I've not seen any mention of market research in which large retail entities such as Target or Lowe's, along with Costco, Home Depot or several others that have been the subject of speculation, actually have been contacted. Those corporations have defined population to square mile, or "roof top" to square mile ratios that have been developed throughout time to determine in which markets they can be profitable and where they locate their franchises. There seems to be an assumption by some that Target, Lowe's or others automatically would locate here if we welcomed them with open arms. Yet, I have not seen any verifiable data or research to show that our population base even comes close to meeting the criteria any of them use to determine where they place their outlets.
Another factor to consider when attempting to lure a "big box" retail outlet here can be read in the Wall Street Journal almost every day. Almost all of them - Target, Lowe's, Home Depot - are suffering enormous losses and are closing outlets. Costco's profits declined 27 percent in the latest quarter. Is that incentive to open an outlet in Steamboat? The outlets that are being closed are in metropolitan areas that have markets consisting of more people within a few square miles of a store than we have in Routt and Moffat counties combined. It most likely will be years, possibly decades, before many of them again enter into an expansion mode, especially into an area with a population base such as ours.
So, before we work ourselves into a frenzy about "big box" stores and the potential mythical sales tax revenues we stand to gain, how about we have some factual economic and market research into the true potential for any of those stores to realistically open here.
J. Michael Turner