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What’s Good for Gander Not Good For Goose

The July, 2006 issue of Budget & Tax News reports that Gander Mountain is opposing the giving of tax breaks to its competitors. A quote from the article:

Fairness Is Questioned

However, Gander Mountain and its developer, Oppidan Investment Co., argue granting special favors to any one retailer leads down a slippery slope. “If you give [a tax break] to a Wal-Mart, should you give it to Target? If you give it to Home Depot, then should you give it to Lowe’s? And if you give it to Bass Pro, shouldn’t you give it to Cabela’s and Gander Mountain? How about we just don’t give it to anybody?” Oppidan CEO Mike Ayers said to the Toledo Blade for a March 22 article.

When the CEO of Gander Mountain was asked why the company doesn’t take subsidies he replied:

We believe in the American system of free enterprise and consider these demands to be anti-competitive and fundamentally inappropriate. We cannot in good conscience go down that road and maintain our integrity as a good corporate citizen. We think it’s wrong. So we are unwilling to accept the “everyone is doing it” argument and become part of the problem./blockquote>

More from the Gander Mountain CEO:

Resources that could be used for education or true economic development are being wasted on private retail developments. Communities have been paying big money to bring in low-paying retail jobs. Buda, Texas, for instance, gave Cabela’s subsidies worth $61 million, or about $271,000 for every full-time job, according to our estimates. Reno, Nevada spent $54 million, or $208,000 for every job. It also should be noted that incentives to lure retail into a community often do harm to businesses already located in the area. Local stores and other national firms like Gander Mountain, who don’t seek subsidies, are placed at a competitive disadvantage by this practice. Studies have also demonstrated that the promises of increased revenue, jobs, and economic growth are seldom fulfilled.

I was quite astonished to read these articles, as Gander Mountain certainly received a lot of aid from Wichita. To be precise, I believe the aid that Wichita gave to Gander Mountain was not in the form of a tax break. Nor was it a subsidy, if by subsidy we mean an ongoing series of payments.

Instead, Gander Mountain received an outright gift from our city and a sweetheart lease. Now that this company has apparently changed its mind about receiving government handouts, should Wichita ask for its money back?

Update, July 8, 2006

I received a communication from a representative of Gander Mountain seeking to correct a mistake I made in this article. It was the developers of WaterWalk, not Gander Mountain directly, that received the subsidy from the City of Wichita. That subsidy undoubtedly let the developers offer Gander Mountain an “attractive lease rate,” as the Gander Mountain representative wrote.

I apologize for this mistake. It is, in my opinion, a distinction without a difference. Giving money to one party so that they can give it to another is still a subsidy, and the introduction of a middleman probably added to what the city had to pay.

Also, the City of Wichita built a parking garage for the use of Gander Mountain customers, as well as customers of other businesses, should any appear. This was reported to cost $2.1 million.

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