Shreveport Loses… Bossier Wins Again!by Elliott Stonecipher
I open with an important disclosure: I have no training in the operation of shopping centers, how their renovations should be financed, or anything of the like. My experience in the matter is limited to the investing I do in REITs (real estate investment trusts). Otherwise, I know what I read, and what I’ve learned as a shopper. So, anyone who cares to straighten me out on this thinking, fire it up; I’m ready to learn.
OK … now to the point.
Shreveporters woke up Sunday morning to a report in the Shreveport Times about a proposed new, targeted tax the Shreveport City Council will decide on March 12th. The proposed tax would be 1%, on retail purchases, but only at the city’s St. Vincent Mall, and not on purchases at anchor stores Dillards and Sears. To come by such a taxation twist, the private sector operator of the St. Vincent Mall, Rouse Properties of New York, will join with the (Mayor Cedric) Glover administration to form a special “economic development” district. According to the Times, the extra 1% sales tax would generate $12 to $14 million for renovation of the mall.
Now, with that in mind, think about this.
Last summer, as reported by Bloomberg News on June 12, 2012, the same mall developer, Rouse Properties, announced a “multi-million dollar renovation” of Pierre Bossier Mall across the river in Bossier City. Later news stories just before last Christmas reported the renovation had been completed. I have found no mention of a sales tax increase or an “economic development” district in any reports about this renovation. Thus, I assume that in the case of Pierre Bossier Mall, Rouse Properties paid for the renovation, likely in the form of lease-rate increases to mall tenants.
Are we to believe that local and regional shoppers here just don’t care if there is a 1% higher sales tax in St. Vincent Mall if the same store is also in Pierre Bossier Mall? Or, since Rouse Properties is the operator of both, will there thus be no duplication of retailers at the two malls? Might that explain why Dillards and Sears are exempt in St. Vincent Mall, because they each have stores in both malls and the ones in St. Vincent Mall don’t want to be at a sales tax disadvantage?
To me, the point is this: why do we need a sales tax increase in Shreveport, albeit targeted, for private sector mall renovations when Bossier City does not? Given that we have already proven that Shreveport residents pay the highest property tax in Louisiana, and given that this City Council already more than doubled our electricity franchise tax, and given that this City Council intends soon to (more than?) double our water rates, and given that Governor Jindal is planning to raise state sales taxes by about 2%, where will this sales tax party leave us?
Look, I get it: this proposed new sales tax is targeted, and if we don’t want to pay it, we just drive to Bossier. ‘Problem is, how much time do we want to spend driving to Bossier? There aren’t already enough such reasons and needs? Today’s Shreveport – especially with this mayor – thinks up ways to raise the cost of living here while most of the rest of think about ways to make more and spend less. All Shreveport City Council members do not look for new and creative ways to price / tax our city into obvious non-competitiveness. The ones who don’t, though, are a distinct minority.
As to why Shreveport’s mall needs public tax support and Bossier City’s doesn’t, or why a private sector mall operator doesn’t pay for renovations of both centers from their profits, I’ll wait to receive the explanation. I trust these news reports are just incomplete. Surely someone can explain it. What do we tax-paying dummies know about high finance, much less even higher taxation, huh?
Where are the winners in this deal other than the mall operator? The Mayor and City Council are not going to do this “just” for a New York mall operator, right?
Heck, the next thing you know, our city government will be giving land specifically set aside for important highway segments to for-profit real estate developers just because they’re political buds of our mayor. (No city would do that, right?)
And, a final thought. When does “economic development” become just another excuse for raising taxes and increased government spending? If higher taxes are necessary to make a project happen, is that “economic development” or just higher taxes?
Elliott Stonecipher’s reports and commentaries are written strictly in the public interest. No compensation of any kind has been solicited or accepted for this work. This work is protected, and no other use of it is permitted without the written consent of Mr. Stonecipher.