Should this bother us? RC Council votes to give Cabela's a carrot. A really, really expensive carrot.

I was reading the Rapid City Journal on-line today, and I noted the story on how Cabela's just got a massive incentive package to come to Rapid City, and how they're going to host a municipal visitor's center:
Touting the future economic development benefits, the Rapid City Council approved agreements and incentives Monday that will bring outdoor outfitter Cabela's here.

The incentive package includes $2 million in economic development funds and 30 acres of land where the Black Hills Visitor Information Center now sits.

In return, the city will get an 80,000-square-foot "destination retail store" that includes hunting, fishing, camping, hiking and boating gear, as well as clothing, gifts and furnishings with elaborate animal displays, aquariums and other sights.
Read that all here. It's not dissimilar to what Brookings did to lure Lowe's to town, where huge financial bonuses are offered to lure employers, which makes it an even more timely statewide topic.

And it's not as if such moves aren't political. In fact, there were come political differences in the Rapid City vote as there were in the Brookings vote.

I am all for economic development. In fact, it's arguably the most important thing for South Dakota Government to be doing in an environment where we desperately need to broaden our economic base.

But on the other hand, it tugs at my conservative heart to see incredible amounts of taxpayer money being spent in such a way. Is spending that kind of money really going to influence and impact the free market in the long term? Is it going to bring in new money from the outside, or is it simply going to redistribute what's available locally.

In other words, it's a conundrum. Would they have come to Rapid City anyway, absent the "jumper cable jolt" of huge financial incentives?

Are communities who decline to pay such incentives cutting off their nose to spite their face? Or are cities that do go the extra mile, mortgaging their future for a short term gain at the expense of their local businesses.

Adam Smith, where are you when we need an answer?

Comments

Anonymous said…
Really really really really big, PP? Or just really big?

Stop acting like $2 million is a lot of money. It's alot of money TO YOU, but not a lot of money to a place like Rapid City, which would see even more sales tax revenue from surroudning areas as a result of Cabellas.

Why is it that so many conservatives (notice, I say conservatives, not republicans) like to play up the sticker shock angle of things?

If Rapid City doesn't offer $2 million, will Cabellas not come into the Hills? Who knows?

The question is, do you want to find out? How do we know the package wasn't already bartered down? What price would you pay to have a Cabellas put a lasting stamp on Rapid City.

Add in another factor - Cabella's isn't Wal-Mart. Cabella's is a tourist attraction. How is sinking $2 million into Cabellas (a place that will house the Black Hills Visitors Center)different than investing in any other tourist desitnation?

Sheeesh.
Anonymous said…
If I were Scheels or any other sporting goods store in Rapid I'd be pissed. Did they offer them any incentives to come to town? If it's such a lucrative market why do they need the incentives?
snookered by the council said…
This is simply handing over added profitability to some folks you want to drink with at Chamber of Commerce meetings, while stealing from the folks who put you in office.
Anonymous said…
Did you read the same article as I did, PP? The only city council member who voted against this thing was Sam Kooiker. Is that the "political difference" you're talking about?
freeman said…
Yes, Kooiker did vote against it, while saying that he was really in favor of it, but wanted a cost/benefit analysis. In reality, he just wanted to get through June 26, knowing that the rest of the council were voting for it anyway.
Anonymous said…
And the property the city is giving away will not house cabelas. Cabelas will be down the road.
blawgzilla said…
The land is worth at least 9 million, add 2 million cash, add the 6 million dollar building they are going to demolish, that means Rapid city is giving Cabelas 17 million dollars in cash or kind. Cabelas said they are going to spend about 20 million. That means Rapid city is donating about 45 percent of the costs of bring cabelas here,,,,shame,,,shame
PP said…
WHOAAA!!!!

guys, if you didn't notice, I mentioned Brookings as well. This is not a trend limited to Rapid City. It's statewide (and country wide).

the trend has been examined by magazines such as Governing. My point is to ask - overall, does it make good sense?
Anonymous said…
Sam Kooiker won mayor last night, he is the only sensible person on the council.

Alan Hanks is in favor of the Cabelas debacle.

Cabelas is nice, but if the city will really get 3.7 mill in sales tax revenue, that should be enough of a reason for Cabelas to come to Rapid City in and of itself. The city dosen't need to bend over backwards to get Cabelas here. If Cabelas will profit economically they will come here, this does not make sense for the taxpayer.

Way to go Hanks, good to see you are TRUELY putting "Taxpayers First"
AL said…
Sam Kooiker wanted a cost analysis because he wanted to make sure that this would truly benefit the economy of Rapid City before jumping into the major investment.

Looks like to me that Sam is the only guy on the council that wants to make sure this won't come back and bite us in the rear in 10 years.
been there said…
How many Mom and Pop stores will be put out of business and their dreams thwarted because their business wasn't BIG enough? Shame on RC, shame on Brookings, and shame on Watertown for prostituting themselves for a "super" Walmart with their low quality foreign junk.
All businesses should be treated the same, period.

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