All over the United States, shopping malls are closing up faster than Rosie O’Donnell eating at a buffet. With retailers shutting down as online businesses surge, malls are being abandoned at a rapid pace.
What’s the solution? Well, the newest trend for some shopping malls may be to turn to the one refuge that industries depend on these days: the taxpayer.
That’s right. Shopping malls are not only asking for the money in your pocket, they’re also requesting municipal governments for some support.
Brookfield Square mall, owned by CBL & Assocites Properties Inc., is finding a tenant to fill its 20,000-square-foot expansion: the city of Brookfield.
Bloomberg writes:
The local government plans to step in to build a conference center and hotel. By creating a hub for small and medium-size conventions on 9 of the 29 acres currently occupied by Sears, the city hopes to boost CBL’s efforts to reinvent the property, the largest taxpayer in Waukesha County. The idea is a greater focus on entertainment, recreation and business, according to Daniel Ertl, director of community development for the city of about 38,000.
In this depressing landscape, there is at least one player still willing to take the risk: local governments hungry for tax revenues. Developers incorporating additions such as housing and parks in their plans are turning to public partners to help rehabilitate the aging retail meccas that dot the U.S. Public subsidies have been part of retail development for decades, but with landlords pouring billions of dollars into renovation to battle a wave of store closures, public-private partnerships are more urgent, and more fraught, than ever.
It remains unclear as to how much the municipality is willing to put in, but the overal project cost roughly $70 million. The city had already kicked in some money to pay for new sidewalks and street lamps.
Reportedly, property taxes will play a big part in these types of endeavors moving forward:
In Brookfield, 13 miles west of Milwaukee, the city is using tax-increment financing, or TIF, a common tool for municipalities to subsidize development by putting property taxes from new projects into a fund that pays for building costs. These funds will be used to build the convention center, as well as to do environmental cleanup at the site of the Sears Auto Center, according to Ertl, the director of community development. The city will also sell bonds to raise cash, he said.
Rather than adapt to the times and try to do something new with private financing, shopping malls are attempting to be bailed out by the taxpayer. For shame.
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