The Myth Of Big Bucks And Big Box Developments

July 23, 2006
Commentary By TOM SEVIGNY

I recently had the pleasure of attending a SHARE (Simsbury Homeowners Advocating Responsible Expansion) sponsored forum on River Oaks, the proposed big box development - or should I say lifestyle center - on Route 10.

As one of the presenters deconstructed the myths the developer is using to convince the citizens of Simsbury that their big box project is good for their community, I was struck with a sense of deja vu.

For the past few years, Canton residents have heard the same myths from developers in their attempt to make Route 44 one continuous piece of asphalt. These developers were so good at their job that there are now citizens in Canton advocating what they call the "let Route 44 go" theory of economic development. Yes, "let Route 44 go."

Not exactly an inspiring catchphrase you would put on a bumper sticker, but at least they are being honest. Who wants to be bothered with things like vision, careful planning and hard work when we could just let the whole thing go to waste?

Anyway, the foundation of this theory is that big box strip mall development along Route 44 is the answer to Canton's financial problems. The purveyors of this theory rely on the myth that any type of commercial development is beneficial to a town because, unlike residential development, costs of services are supposedly so low as to be almost inconsequential. Towns will reap a windfall of commercial property taxes.

Sadly, people are all to willing to believe these pipe dreams. I heard people say that the Shoppes at Farmington Valley would be the "economic savior of Canton."

A member of Canton's Board of Finance even told an audience at a League of Women Voters meeting that the town would incur no costs from the Shoppes.

To listen to the purveyors of the "let Route 44 go" theory is a lesson on how deep into our political and cultural subconscious these myths have been hammered. People just echo them as the gospel truth with little or no thought to their veracity.

That is what I find so aggravating - that people continue to believe these theories despite the overwhelming evidence, both from their own experiences and from academic studies, to the contrary.

Look at the research. A 2002 study in Barnstable, Mass., concluded that big box retail, shopping centers and fast-food restaurants cost taxpayers more than they produce in revenue. The study found that big box retail generates a new annual deficit of $468 per 1,000 square feet.

In contrast, the study found that small-scale Main Street businesses have a positive impact on public revenue, with specialty retail producing a net annual return of $326 per 1,000 square feet.

A study of eight Ohio communities between 1997 and 2003 found that large retail development created a drain on municipal budgets, and that on average, large retail buildings produced a net annual loss of 44 cents per square foot. The study concluded that "the concept that growth is always good for a community does not seem to correlate with the findings from various fiscal analyses," and cautioned cities not to be taken in by the promise of high tax revenue from a new development without also considering the additional costs of providing services.

The city of Concord, N.H., learned this lesson the hard way. Over a 12-year period, the city added 2.8 million square feet of new commercial and industrial development. Yet, the total assessed value in the city declined by 19 percent. To make up for the lost revenue, the town now had one of the highest property tax rates in the state.

An independent economic consulting firm found several reasons for the declining tax base. One was that new retail development, primarily big boxes, had harmed local businesses. Property values, and subsequently tax revenue, in the older shopping areas had declined sharply.

Another factor was that the new development had eroded the value of residential property in the area. The result was that the city experienced a declining tax base despite all of the new growth.

Will Connecticut towns continue to believe the myths and fight each other over big-box strip mall commercial development, or will they begin the process to work together to protect their existing economic and natural assets? The unplanned growth implications of the "let Route 44 go" theory are the very definition of sprawl.

In the end, unplanned growth, both commercial and residential, will cost towns more than they receive in property taxes. Yes, we do need commercial development along major routes such as 44. However, such development needs to be carefully planned, within scale, and designed to keep a town's character intact.

What we need is vision, not the defeatist attitude of "let Route 44 go."