Published May 1, 2005 | May 2005 issue
An economic impact study commissioned by the city of Bozeman to justify higher development fees for big-box retail stores shows that they may not live up to their reputation as Main Street killers.
A city moratorium requires retail stores more than 75,000 square feet in size to pay higher fees—as Home Depot and Wal-Mart have done—to blunt the potential economic impact on local businesses. In February, the city hired a Denver consulting firm to study the legal and economic reasons for doing so.
In an early draft of its report, Economic and Planning Systems Inc. found no legal basis and little economic justification for the higher fees. The study did find that a new Wal-Mart in town could lower retail wages in the city and reduce sales at other Bozeman grocery stores. But ironically, national grocery chains would take the biggest hit; locally owned groceries would likely fare better because they've become adept at competing with national chains. And, the report said, the economic impact of large retailers is only marginally greater than that of the many smaller stores not covered by the city's moratorium.
Predictably, other large retailers have taken note. Lowe's Home Improvement Warehouse, stymied three years ago, has reapplied to construct a 292,000-square-foot retail building and office complex.