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Keith Norman, Forum News Service, Published January 05 2014

Former businessman questions incentives for big-box retailers

JAMESTOWN, N.D. – A former Jamestown business owner is questioning the process the city is following in negotiating with a big-box home improvement store. He also questions whether the city should be involved in offering incentives to retail businesses.

“Our country is built on the free enterprise system,” said Leroy Wegenast, former owner of Lifestyle Appliance & Entertainment Center. “If Jamestown is a good place for a big-box home improvement retailer, they should come here on their own.”

In October, the City Council announced a developer’s agreement with R.H. Johnson Co. to create a retail development area and lure a big-box retailer to the development. The agreement specifies that the city will develop a comprehensive list of pre-development and development incentives it is prepared to provide.

The announcement also said one of the big three home improvement retailers – Lowe’s, Home Depot or Menards – had shown interest in the project.

Jamestown Mayor Katie Andersen said negotiations with the retailer are continuing and an announcement could come in late January or early February.

In the meantime, Wegenast is trying to gauge the opinions of businesspeople in Jamestown.

“I felt the thoughts (about incentives for big-box stores) should come from the chamber (of commerce),” he said. “I’m old-fashioned and felt the chamber should represent the business community.”

Wegenast sent one letter to the Jamestown Area Chamber of Commerce in October. He sent another letter to each chamber member on Oct. 24.

The chamber is surveying its members. Chamber Chairman Tim Burchill and Executive Director Lisa Hicks were unavailable for comment about the status of the survey.

Wegenast is concerned about using incentives to attract a home improvement store.

“One of the things that bothers me the most about the box store is they don’t normally provide the customer service a small retailer will,” he said. “Another concern is the surrounding communities. Places like Carrington and Edgeley all have places that sell home improvements. This wouldn’t just hurt local merchants but regional merchants.”

He also expressed concern about the type of jobs the store would create.

“I believe that the city and county should not be involved in creating retail jobs,” Wegenast said. “It is just not the job of the city to be doing this. It is wrong for the City Council to spend any amount of money to try to lure a box store to town.”

Wegenast said the city hasn’t included enough input from taxpayers.

“This is being done improperly with no public input on the process,” he said. “I don’t believe there has been enough transparency.”

Andersen said the time for public comments will come.

“There is nothing official yet to talk about,” she said. “We won’t offer incentives that are not necessary to bring a business to town. Why would we talk about something now when we have nothing official to talk about?”

Andersen said if the city offers tax-increment financing – a program in which the property is assessed and the amount that would be paid in taxes is instead applied to paying for the infrastructure of the project – public hearings would be required.

City Administrator Jeff Fuchs said Jamestown has no policies regarding offering incentives to retail businesses.

“No part of the policy concerning tax exemptions addresses retail one way or the other,” he said. “The city has no policy on tax-increment financing but has just followed state law on past projects.”

Wegenast included the email addresses of the mayor and City Council members in his letter to the chamber members.

“I’ve never been a political person,” he said. “I wanted to work through the structure of the chamber. I’m not sure it will make any difference but felt these things should be pointed out.”

Andersen said the topic has not been a hot-button issue.

“It has drawn less public comments than some other topics,” she said.