How much is a Target or a Walmart really worth to your community? When Strong Towns member Jake Krohn heard that his local Target in Fergus Falls, Minnesota was planning to leave town in a few months, he decided to find the answer to this question.

While many of his neighbors and local media were wringing their hands about what a loss this departure would be for Fergus Falls, Jake dug into the tax data behind the Target and presented his findings on his blog. He writes:

Located midway between downtown and the interstate, Target sits on 8.6 acres of land. It’s a modest-sized store by Target standards. The taxable value of this parcel is about $2.8 million; on a per acre basis (why this is important) that comes out to about $328k/acre. 

Jake goes on to share the tax value per acre of some other local big box stores including Shopko ($372k/acre) and Walmart ($300k/acre). Through simple modeling, Jake illustrates the tax values of these different properties. The taller the plot, the higher the tax value.

Then he gets to the kicker:

All of this is to say that we already have a proven model for generating property taxes in Fergus Falls, and that any effort to collar a fleeing national retailer should be tempered by the realization that with some careful economic gardening, we could cultivate a diverse environment that is much more resilient and profitable than the monoculture offered by the national big box model.

This single block downtown (out of a modest three) offers more taxable value than Target and Shopko combined, and, taken on a per acre basis, is about five times more profitable for the city, and requires a fraction of the infrastructure (roads, sidewalks, pipes) to make it functional.

The chart below summarizes the areas depicted above.

11-tv-chart.png

With this simple illustration, Jake shows that this Target is worth far less to Fergus Falls than most people think. The same is likely true in your town.  This Target (and the Walmart and the Shopko) are costing their community huge sums in the infrastructure and other public services that it takes to support them, yet contributing little to the tax base. Meanwhile, modest downtown blocks are contributing far more and using up far fewer public resources.

Jake's analysis on the Fergus Falls Target caught the attention of the local newspaper who featured it in a recent article and sparked a discussion about the benefits and drawbacks of this store.

It's stuff like this — people taking action, sharing our ideas, shifting the conversation in their community — that makes the Strong Towns movement possible. If you want to be part of this movement and start applying Strong Towns concepts in your own community, become a member today.

(All graphics by Jake Krohn)


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