I headed down Sunset Drive the other
day, past Home Supply.
That store has been there 50-plus years. But will it last another
five?
Probably. It seems to have a loyal customer base. Yet it’s a
legitimate question based on what might (literally) be coming down
the road: The Shoppes at Fox River.
The Shoppes is a new development, and will be at the former
Fleming site on Sunset Drive, near the Fox River (hence the name).
It likely will include popular stores such as Target and Lowe’s
hardware store.
This is a big deal - and, overall a good thing. But I have these
two nagging questions.
1. How active a role should the city play in bringing competition
to existing businesses - businesses that have been around, and paid
taxes, for decades? (More about that later.)
2. Are we ridding ourselves of blight, only to create more
blight? In other words, will we clean up the Fleming site, only to
create blight to the west (Fox Run) and the east (Kmart and others)?
Mayor Larry Nelson has worked hard on this and other
developments, and part of him wonders why his friendly neighborhood
columnist finds the dark side of a project with a seemingly bright
future. He expects the Shoppes to make everything around it better -
sort of like Brett Favre did to receivers.
"The Fox Run Shopping Center is going to have a great
opportunity," Nelson said. "If they’re smart, the owners
will decide, ‘Hey, let’s upgrade so we can compete and get
people to stop here before they go to the Shoppes. Fox Run has a
great location."
He also pointed out that Pick ‘n Save, on the other end of
Sunset Drive, is upgrading. "Obviously they want to
compete," he said. "They realize more competition is
coming." (A grocery store could be part of the Shoppes, though
that has not been confirmed.)
OK, that’s fine. We’ll all get more competitive. But we only
need so many groceries (besides Pick ‘n Save, there is a Sentry at
Fox Run) and home improvement stores. Someone has to lose.
Will it be Home Supply, should Lowe’s come to town? How about
Tomchek Ace Hardware, next to Kmart? Both Home Supply and Tomchek
have been around for years - and paid taxes for years.
Here’s where I have to make a disclaimer: I am not someone who
wrings his hands every time a Wal-Mart goes up (which, by the way,
is happening at West Avenue and Highway 59). It’s a tough,
competitive world out there. Businesses like Wal-Mart don’t show
up unless there’s a need. In my opinion, it’s mostly up to the
little guy to find a way to compete.
Having said that, the newcomer shouldn’t be given an advantage
- especially after the little guy paid taxes for decades.
Now, Nelson swears up and down that the newcomers aren’t
catching any breaks from the city, and to a certain extent he’s
right.
First, those businesses aren’t getting any money; there is no
direct tax subsidy. "The tax incremental finance money is not
going to Lowe’s, it’s not going to Target, it’s not going to
the developer," Nelson said.
The TIF is only used for improvements - in this case demolition
of the existing building, environmental cleanup and road work (such
as adding turn lanes).
TIF funding is complicated, but TIFs are a financing tool and
they are created and supported by the city. The city gets the money
back, blah, blah, blah. But the bottom line: A TIF is a government
program. At the very least, the value of the improved property (in
this case the Fleming site) doesn’t count on the tax rolls for
years. That means the rest of us have to pay more than we would if
that property did count.
So there is a financial element. And there’s something else:
Nelson talks about a standard for deciding when to implement a TIF.
It is: "But for the TIF, the development wouldn’t
occur." In other words, the city will only implement a TIF when
the business won’t come without it.
Of course not having that newcomer arrive would be just fine for
some of the existing businesses. It has to be hard for them to hear
the standard, and then not feel like the city is aiding a
competitor.
Here’s another thing: The existing businesses are paying taxes
that help make the TIF possible. That means those businesses (to a
certain extent) pay to fund their potential bankruptcy.
Nelson sees it a little less dramatically. OK, a lot less
dramatically.
First, there is an organized group of Sunset Drive businesses
that is on record as supporting the Shoppes - TIF and all, the mayor
said.
And then there are the other benefits. According to the mayor,
they include:
* Enormous tax implications. The cleanup etc., is expected to
cost a few million. By 2016, the value of the Shoppes is likely to
be on the tax rolls - at an estimated $62 million. That’s a very
nice addition to our tax base.
"It’s a good return on your investment," said Steven
Crandell, director of community development.
* Convenience. The developer and various retailers have done
studies of the south side. The studies showed that residents often
go to Highway 83 or even Muskego to shop.
"These (retailers) don’t just go anywhere," Nelson
said. "They go where there’s a need." Nationally, the
stores have reduced the number of developments, yet Waukesha remains
in the picture because Sunset Drive is so ripe for those types of
stores. (Just about anyone on the south side is ready for a Target.)
* Competitiveness. The existing stores will have to improve to
compete. When they do, we’ll all benefit. "Fox Run, have they
done anything in the last 20 years to upgrade that?" Nelson
asked. The same can be said for Kmart, according to Nelson.
When they do improve, "Sunset Drive, for the first time,
will become a shopping destination," Nelson said. And if Fox
Run, Kmart and others close, there will be replacements lining up
for that space because the whole Sunset strip will be more
desirable, according to Nelson.
* Blight removal. Don’t forget: A huge, empty building
(Fleming) will be gone and replaced with a shiny new building.
I get all that. And I think the little guys (if you can call Pick
‘n Save a "little guy") have to learn to compete.
So yes, on balance, I support the Shoppes. That whole stretch of
Sunset Drive could use some serious improvements. I see that. Anyone
who lives here sees that.
But I have a few misgivings.
First, if I was a little guy, I’d be bitter about the city
paving the way for competitors. Second, I’m hoping that in a few
years we aren’t talking about removing blight through the
"Kmart TIF" and the "Fox Run TIF."
(Longtime Waukesha resident Pete Kennedy is a
former Freeman editor. His column runs Saturdays in The Freeman.
Reach him at kennedycolumn@yahoo.com)