Newsletter Sneak Peak: Public Subsidy for Wal-Mart in Stoughton?

A Look at Next Month's Feature Article

- Written by Sue Pastor, Policy Co-Chair

New_Walmart_Logo.svgThe City of Stoughton and Mayor Donna Olson’s plans to subsidize a development at Kettle Park West including a 153,000 square foot Wal-Mart Super Center are on hold, pending an independent analysis of its economic impact.  The analysis is a requirement of the city’s “big box” ordinance.   On January 28, with about half of its members in opposition, the city council approved a developer
agreement between the city and Forward Development Group/Kettle Park West LLC.  The Wal-Mart Super Center  - about four times the size of the city’s existing Wal-Mart, was revealed to be the anchor tenant only about two weeks before the vote, and the council had previously approved the required zoning changes without knowledge of the anchor tenant.  Three more retail enterprises are supposed to comprise the commercial section of the development, which will include housing as well, and is located at the intersections of U.S. 51 and Highway 138 on the city’s western edge.

Although it does not appear that any financial documentation was presented to the Council or its Finance Committee, the Agreement to Undertake Development, available on the city’s home web page concludes “The City finds and determines that unless the City provides the tax increment development assistance described in this Agreement, Developer will not develop the Property.”  The development site requires substantial infrastructural improvements, for which the city will reimburse the developer with about $5 million in tax incremental financing, providing a tax incremental financing district is created.

In addition to irregularities in the city’s process and allegations of secrecy about the anchor tenant, both alders and the public have questioned the public benefit of a commercial development in which the major tenant does not pay a living wage.

Buzz Davis first alerted PD members to this issue on PD Discuss, and next month’s newsletter will address the issue in-depth and provide an update.

"What [a tax increment district] does is privatize portions of the city's revenue capacity, keeping tax gains from intensified development out of the city's general budget and dedicating them to the support of private investment." -- Clarence N. Stone,  The Politics of Urban Development, (1987) Pp. 280-281.