Follow the money

From "Annexing auto dealer to cost village $170,000" in the Chicago Tribune:

Prairie Grove trustees agreed last week to pay 17 owners of contiguous properties $10,000 each so the village can annex the land to bring in an auto dealership north of Illinois Highways 31 and 176.

The annexation was approved Thursday, and property owners, the majority of whom are in the Berian Estates subdivision, will get the money this week, officials said.

The goal was to reach Crystal Lake Chrysler-Jeep Inc., which generates $300,000 a year in sales tax that had been going to McHenry County. In the annexation agreement, the village will return half the sales tax to the auto dealership for the next 11 years.

DC doesn't have these issues in the same kind of way, but it does have these issues. The regulatory regime (difficulty of the permitting and approval process), and the relatively small inventory of large tracts of land means that big box stores will locate nearby but outside the city. This is part of why the city government, through the DC Economic Partnership, works to attract chains to the city, to capture the sales tax revenues. (There are other downsides to this policy that I write about from time to time, to wit, the homogenization of the retail offer in the city.)

For example, Wal-Mart is locating at the old Capital Plaza at MD-450 and the BWI Parkway, and Wegman's a few miles beyond. Or why you can find various Giant and Shoppers Food Warehouse supermarkets just outside the DC line (e.g., Giant on Southern Ave. and Riggs Road in Maryland, SFW on Bladensburg Road in Cottage City).

Index Keywords: tax-revenues