So proponents of Eagle River Station now have City Market to hold up as a possible tenant for about a tenth of the project's space (leaving only 90 percent as a giant question mark). Well, let's look at the math.
City Market's 40 percent share of total sales tax collections for 2011 ($2,661,024) came to $1,064,410. The town of Eagle got to keep all of it. Shoppers paid 8.4 percent sales tax, of which 4 percent went to the town. City Market paid full property taxes on commercial property and supported the schools and all other tax districts at a full rate. Should City Market move to ERS, shoppers would pay 9.85 percent sales tax, of which the town would receive 1.45 percent, or 64 percent less, for a total of $385,848 until the bonds are paid off in the year 2037 or so. That repayment timeframe is based on the rosiest of revenue forecasts wherein people drive past their own big boxes to shop at ours.
Let's give them the benefit of the doubt and say sales increase 50 percent due to the larger store, so that $385,848 becomes $578,772. Then, of course the developer will be exempt from the vast majority of property tax increases and will pay taxes as if its still a horse pasture during that period due to the TIF deal. By moving to ERS, then, Eagle shoppers could:
1. Pay higher grocery costs to offset the higher lease rates.
2. Pay more sales tax.
3. Turn a million bucks a year revenue into about $579,000
4. Reduce the property tax based funding for most county tax entities.
Frankly, I'm impressed that so many folks can wait until 2037 to reap the supposed rewards of this project, because it sure might be tough until then.