Here’s a thoughtful counterpoint to my support of the Bass Pro project as currently proposed, written by Todd Mitchell of the Preservation Coalition, together with my replies:
Are public subsidies of retail a good investment in economic development? Can Bass Pro be a “retail destination,” and so draw visitors to the waterfront? Unfortunately, the answer to both questions is No, according to David Ewald. He should know. He has spent years studying public subsidies and retail, and in particular the hunt-fish-camping industry, of which Bass Pro is the market leader. Ewald came to town Tuesday to address the Buffalo Common Council about the Bass Pro plan, and then to a public meeting at The Church he gave the same message, just say No to subsidies for retailers.
The event was sponsored by the Campaign for Buffalo and Free Buffalo.
Retail creates economic activity, not economic development. If job creation is the goal, then the kind of jobs offered by Bass Pro, or any other retailer, must be considered. Retail jobs are typically minimum wage and have extremely high turnover. Furthermore, each job will cost tens of thousands of dollars in subsidies. How does one arrive at such a figure? Simply divide the public subsidy by the number of jobs expected to be created, and one has the public cost per job. Do not forget the further cost to the region of small, local retailers put out of business by a subsidized, big box Bass Pro. The local gun shop or tennis shop also represents jobs and tax revenue.
Part of what PresCo (led by Cynthia Van Ness) and the Campaign for Greater Buffalo (Tielman’s group) tell us is that preservation (and in some cases, reconstruction) of landmark buildings generates architectural tourism. These projects very often receive public money – whether in the form of outright grants, tax breaks, incentives, or credits. In the case of the Church on Delaware, for example, they received over $5 million in federal tax credits that were specifically supposed to be used for tax creation, yet Righteous Babe Records itself admitted to Forbes Magazine that not one full-time job would be thereby created. Architectural tourism – does it necessarily “create” many more jobs than retail? I strongly doubt it.
But no one is really touting job creation as the damn-good-reason why Bass Pro should anchor the Canal Side project. I also would vigorously dispute the supposition offered at the rally at the Church on Tuesday that these jobs are “minimum wage”. Unless someone can back it up, it’s pure speculation.
As for the “cost to the region” of small local retailers being put out of business by Bass Pro, one could certainly argue that the gun departments of Wal*Mart and K-Mart, and the sporting/outdoors departments at Gander Mountain and Dick’s – big boxes all – would presumably have the same effect, yet I haven’t seen any data to back up that it’s happened. In fact, smaller retailers have a leg up on big box stores in one respect – they can offer personalized customer service that no Wal*Mart or Bass Pro can match. It’s a competitive world for sure, and just about every big box in every Benderson or DDR plaza in WNY is either a direct or indirect beneficiary of public largesse. Whether there was an IDA incentive or tax break offered to the plaza owner when the project was proposed, or a state/county road that was improved and widened to facilitate access, the public almost always has a hand in that sort of thing around here.
Retail is an extremely risky investment. There are few industry landscapes that shift more quickly than that of retail. Toys R Us and Krispy Kreme are companies in trouble today that just five or ten years ago were poised to take over the country. The point is, Bass Pro could very well suffer a similar future. The answer is not to shun Bass Pro; predicting its failure is as great an error as counting on its success. Rather, Buffalo should not place its waterfront development on the back of one retail company’s future.
Retailers locate their stores where their customers are. That is what smart, successful retailers do, in any event. Tax incentives are only a minor factor in the decision of where to put a store. At least, this is what CEOs tell their investors at annual stockholders meetings. That seems a pretty reliable source of information. If this is true, then why do we need tens of millions of public dollars to lure in Bass Pro?
If the last 20-30 years have shown us anything, it’s that people like to shop in malls. Malls generally don’t begin construction until the anchor tenants have signed a lease. At its core, the Canal Side project is a mall – whether it’s in the 2004 Master Plan or the current plan. It is a manufactured replication of what used to be a rough-and-tumble wharf area. In its place, a cobbled streetscape will be replicated, and buildings intended to replicate what used to be there will be constructed. It’s a quaint, manufactured, open-air mall.
Now, propose we build the mall set forth in the 2004 plan. You’re a retailer – indie or chain. Someone comes to you and suggests that you open a location downtown on the waterfront. Name one piece of data to show that this is a winning proposition. You can’t. You need simply take a walk down Main Street, or visit the Cobblestone District to realize that there is scant retail downtown, and none whatsoever on the weekends and after 5 on a weekday. You have a textbook chicken-and-egg scenario, and it would be very difficult to attract retailers to act as, essentially, pioneers.
On the other hand, now you have a major national retailer that has proven in other cities that it can attract visitors and other businesses. The city can go to retail conventions and say, yes our downtown is dead right now, but we’ve got Bass Pro coming in on the waterfront project we’re planning. All of a sudden, retailers – national retailers (many of whom probably wouldn’t even bother with cheektowaga, much less downtown Buffalo), sit up and take note. Bass Pro has that effect. The chicken-egg conundrum is thereby broken. If the project is built to be appealing to visitors – whether from suburbia or out-of-town, it can succeed. Right now, you can count on one hand the number of retail districts in Buffalo that are appealing to visitors, and they aren’t even marketed effectively to out-of-towners.
A retail store is not a “tourist destination.” After studying license plates in Bass Pro parking lots around the country, Ewing Consulting found that 90% of the shoppers at any given Bass Pro store were from in state, especially when the store was far from the state border. With Bass Pro stores already located in Auburn, New York, Toronto, and proposed for Pittsburgh, a store in Buffalo is going to be shopped by locals. That would change if visitors were to come to the Canal District anyway, say, to visit the Erie Canal. So, the Erie Canal may possibly bring more shoppers to Bass Pro than Bass Pro is to bring visitors to the canal.
One of the continent’s largest tourist attractions is 20 miles down the road. Millions upon millions flock there annually. One of North America’s largest and wealthiest metropolises is an hour and a half up the road. And their sales tax is double that of Erie County. The Auburn Bass Pro is in a mall. Ditto Vaughan, Ontario. Pittsburgh’s is going to be in a sea of surface parking. As part of a well-marketed, comprehensive tourism plan, the Canal Side Bass Pro could indeed be that draw, and work in conjunction with existing tourist attractions in Buffalo. Albright-Knox. Elmwood. Hertel. Burchfield-Penney. Wright buildings. Canal Side. The people are here. They’re close by. All they need is a reason to come downtown.
Which development plan is more likely to result in a lively, sustainable business district? The 2004 Canal District plan calls for small scale, individually owned buildings to house a wide mixture of tenants. A small, locally owned shop or restaurant could afford the rent or purchase price of a small store front. The variety of businesses and uses would help even out swings in business activity, resulting in a more stable business district. Local businesses also are more loyal to the local community, and are unlikely to relocate to a different city or state. The Bass Pro plan, in contrast, floats or sinks on the fortunes of one company. What attachment does Bass Pro have to Buffalo? It will not even own the land or the building. Bass Pro will not hesitate to close up shop should things not work out as the head office expects, and then what shall we have for our massive investment? Furthermore, there will likely be no room for the small, locally owned business in this development. One need only consider the shopping development by 290 in Amherst. In the home of Panera Bread, Cheeburger Cheeburger, and Starbucks, one can find not a single locally owned restaurant of coffee shop. Benderson Development and Bass Pro will not bring us Hertel Avenue, the Elmwood Village, or Main Street in East Aurora.
That’s true. It’s also probably a good thing.
You see, you can’t make the argument that Bass Pro would cannibalize business from existing mom & pop outdoor retailers, and then propose replicating Elmwood or Hertel on the water and not concurrently argue that the genuine Elmwood and Hertel would not be adversely affected. Elmwood and Hertel (and East Aurora) developed their quaint, hip shopping districts organically. They are unique and you can’t expect to just build some brownstones and re-create that. Elmwood itself has very high turnover with many empty storefronts. We can’t demand that everything look like Elmwood or Hertel.
I also often read about – what if Bass Pro closes? What then?
Two things: number one, Bass Pro doesn’t expand like a weed, and it’s never closed a store in its history. That’s a fact.
Number two, assuming Bass Pro left, we would indeed be left with a very large building abutting a boardwalk. Are people suggesting that this building couldn’t be modified like Fanueil Hall’s North & South Market Buildings or London’s OXO Tower to accommodate several smaller stores?
The beloved children’s tale The Emperor’s New Clothes by Hans Christian Anderson, for some reason, keeps coming to mind. Hopefully, the little boy’s message will start to be heard soon.
Todd admits that retail is “an extremely risky investment”. The risk is quadrupled when you’re talking about mostly retail-free downtown Buffalo. If we can attract an anchor tenant which can, in turn, attract other tenants, we’re ahead. If the project is built in an attractive manner that will draw people to that location, we’re ahead. If – as planned – the surrounding blocks contain a mix of hotel, residential, office, and retail space with enough parking to accommodate them and visitors, we’re ahead.
If we build the 2004 mall, it’ll look pretty but most likely remain empty. To top it off, Ewald was paid to come to town to hypocritically rail against subsidized retail. The 2004 mall is subsidized, and it would construct retail space. Who are the small local tenants champing at the bit to locate there?
The Buffalo Record 
I just don’t understand why they think small local shops have any chance of succeeding in this location without a major draw. they have this extremely naive idea that people are going to flock from around the world to see this canal slip.
Sorry folks, as great a thing as it is to have the slip back it ain’t a major draw. Small shops struggle in the best circumstances in Buffalo. This out of the way corner of downtown is not going to sustain quint shops in old time looking buildings all by its self and a small stub of the Erie canal is not going to help either
“After studying license plates in Bass Pro parking lots around the country, Ewing Consulting found that 90% of the shoppers at any given Bass Pro store were from in state, especially when the store was far from the state border.”
Wow. Ninety-percent, eh? So from that we are to extrapolate that all 90 percent of the NY plates at the Auburn store are from Auburn? And not, say, Watertown? Albany? Poughkeepsie? Or (gulp) Buffalo? Last I checked, most of the 17 million or so people in NY live somewhere other than Buffalo.
— I can prove anything by statistics, except the truth. — Geroge Canning, 19th century British Prime Minister
I kind of like the rendering I saw recently coutesy of the riverkeepers (actually – i think it was outer harbor). The point being that we need to make it park-like and build housing. The retail will follow. Retailer would then pay us to locate there if the market is hot enough.
Mike mike from GI — The Bass Pro debate is, I think, inner harbor focused, and you’re talking outer harbor, but let me ask anyway. What sort of housing? Trendy lofts, of which there are many these days in and around downtown. And, of course, a loft implies that it is on an upper floor of an existing building. What goes in the rest of the building?
Townhouses? Lots of those by the small boat harbor, and I don’t see retail flocking there.
Suburban style single-family, detached? McMansions, as the hip urbanists call them. I would imagine you couldn’t squeeze many in there, thus losing the critical mass that I think you’re implying.
I live in a house, surrounded by hundreds of others within easy walking distance, and probably thousands within a five minute drive. Yet the Tops market up the street closed (leaving an empty shell) to build a new store closer to — wait for it — other retail.
Waterfront or near-water housing is usually quite expensive, thus limiting your market. How does the community gain by building housing that most of us might never afford, especially when there is already a plentiful supply of such housing available for those who can afford it?
Just curious.
You might as well be debating the propriety of Microsoft or Apple relocating their headquarters to the canal slip, because that’s as likely as Bass Pro ever coming to the Buffalo waterfront. The MOU between Bass and the City isn’t worth the paper its printed on, and significant development coming to the waterfront is one of the longest running jokes going. Paris Hilton stories have as much news value as this meaningless debate.
Steel wrote: “I just don’t understand why they think small local shops have any chance of succeeding in this location without a major draw. they have this extremely naive idea that people are going to flock from around the world to see this canal slip.”
No, but they might flock to see RAW SEWAGE spewing out of the Hamburg drain into the canal, wouldn’t they?
Then again, maybe not.
BBD
Steel, I think in many cases it’s people who have a political/economic ideology that automatically equates large successful wealthy companies with the concept of “bad” and small barely financially surviving companies with the concept of “good”.
And of course, according to such thinking, most other people must feel the same way because – well just because.
Similar “logic” helps fuel the anti-Walmart movement. For example, how often to we hear any protests against Target? Not very often. Target is huge, but smaller than Walmart so even if their business practices are often very similar and even if their profit percent is even larger – they must be not as bad as Walmart because Walmart is bigger.
I would bet any amount that a lot of these anti-Bass Pro people who think everyone wants to shop at small stores would never be caught dead in a Walmart but have no hesitation to shop at Target (but only when a small shop is not handy of course – haha).
It will be interesting to see if any of the prgressives around here supporting the Bass Pro subsidy will ever start complaining that Bass Pro doesn’t pay living wage or some such complaint.
Gee, you denounce the meeting before hand as propaganda and then you seem startled that anyone other than you can make a thoughtful argument. What arrogance.
Target is simply a more pleasurable store to shop in than Wal Mart.
When I go to Target, there are always adequate staff at the registers so there is minimal time spent waiting in line.
Wal Mart is a circus and there are always 2 people working the registers, and you stand in line behind Granny who pays by check for 75 minutes or some other such annoyance.
So yes, I prefer shopping at Target over Wal Mart for perfectly unpolitical reasons.
That aside, you rarely hear about Target trying to muscle its’ way into a small community that doesn’t want it or plow over a profitable Drive-In Theater loved by its’ community (Grandview Drive-In in Angola) or other such unneeded tactics that make people unhappy. Target will normally build in areas that are already heavy retail hubs such as Transit Rd. or Walden or near the McKinley Mall – so nobody complains.
Joe, I agree totally with your first point about Target being a better shopping experience, but as you said that’s a non-political factor. I was referring to people who focus on political agendas.
Your 2nd point re. WM muscle-ing their way to a locations where there’s opposition – seems to me it’s somewhat of a chicken-egg thing because due to the political hubub, WM is much more likely to face opposition in the first place than is Target.
I suppose the question would be, how does Target handle things for proposed sites at which opposition does occur – do they just say “ok, nevermind” or do they lawyer up and muscle their way in WM style? I’ve no idea.
Anyhow, I was referring much more to general bitching against WM for paying below “living wage”, being aggressive with suppliers on cost, dealing with China, and so on – most of which is done similarly by Target, etc., even if they haven’t achieved WM levels of all that it’s probably not for lack of trying. And I’d be surprised if Bass Pro didn’t either.
Retail is a competitive jungle, except of course for the cute little shops that business experts Teilman and Esmonde say will be just perfect for the canal slip area.
The difference between Target and Wal-mart is that Wal-mart targeted small towns while Target built in Suburban areas (generally). Often that would result in friction between the town and Wal-mart.. for a while, Wal-mart had at company retreats a song with lyrics “now hear the downtowns weep”. Target more readily blended into existing built up areas and took most of their business from the likes of Ames or other defunct large retailers so they didn’t strike the same nerve.
People who do support the former masterplan for Erie Canal Harbor do not necessarily think that large retailers can not be accomodated. See previous EEK masterplan that had major retailers on Webster Block, Donovan site, and Bass Pro in the Aud. Smaller stores then locate closer to the water. For good or bad the current plan basically flipped that in some way.
Wal-Mart was also notorious for using military tactics to destroy the competition. They would triangulate in on a rural area. Build three stores. When the competition was crushed, they would close 2 of the 3 stores.