The Walmart/IRG deal is a taxpayer bailout of a private corporation's land speculation.
Arvada Urban Renewal Authority and the City of Arvada government are proposing a very sweet deal for IRG (Industrial Realty Group) who wants to build a Walmart Supercenter in the Arvada Plaza.
The deal will take $5.8 million of sales taxes collected at the Walmart and give that money to developer IRG so that it can make improvements to its private property. Walmart will then undoubtedly get a discounted lease from IRG ... it's how the game is played.
This tax-giveaway scheme and the final vote on the Walmart/IRG plan are on the City Council agenda for Monday, July 15, 2013 (6:00 P.M.)
Let's be very clear -- this is a taxpayer bailout.
Only government has the power to tax. Tax dollars given to a speculator/developer for the purpose of increasing the value of their investment is a BAILOUT.
IRG, Walmart's developer, bought the Arvada Plaza at the top of the real estate market boom in 2007 for $9 million. Now after the 'crash' and after six years of neglect that surely diminished the value of the property -- IRG looks to finally get the taxpayers to bail them out of their potential losses.
So, on Friday, June 21, 2013, Arvada Urban Renewal Authority and the City government announced an arrangement that will give $5.8 million in tax money to IRG for the improvement of its private property. The city government will take its 3 percent tax on purchases at the Walmart cash register; then city government will transfer that revenue to the Arvada Urban Renewal Authority ... who will then hand it over to developer IRG. This would go on for twelve years or until the developer gets all of the $5.8 million which ever comes first. (However, according to the 'Cooperation Agreement', AURA can keep forty percent of the tax collected for those twelve years and can collect and keep all of whatever revenue is collected after that for another thirteen years. Article III; Section 3.2; A & B and Article V; D & E)
It's all part of a layered governmental bureaucratic formula using a PIC (Public Improvement Company) to levy a PIF (Public Improvement Fee) which is a variation of TIF (Tax Increment Financing). (Explanations here, here, here, and here.)
And what is Walmart/IRG supposed to do with all of this taxpayer's money?
Things like cleaning-up asbestos and remediating groundwater contamination on IRG's property.
Things like re-grading and stabilizing the ground on IRG's property.
Things like demolishing the existing buildings on IRG's property.
Things like paying for the consultants for improvements (survey, architectural, design) for IRG's property.
Bear in mind, none of the Walmart's competitors in the area would be getting back any of the sales tax money they collect to make 'improvements' to their stores. This bailout is the kind of governmental favoritism that cuts out the very heart of the free enterprise concept.
Make no mistake, the sales tax money that is being collected right now at businesses in Arvada Plaza should be going right into the City's general fund --Walmart city sales tax money will go to a private corporation.
It's a bailout.
PDF: Cooperation Agreement Between City of Arvada and Arvada Urban Renewal Authority-June 2013