Local officials last week awarded incentives to support the opening of a store to drive traffic and support local business. But in Knoxville, TN, that retailer is not some huge anchor, it's the trendy teen apparel chain, Urban Outfitters.
The Knoxville city council unanimously approved a $250,000 grant to incentivize Urban Outfitters to locate in the Arnstein Building at Market Square as well as to fund renovation work at the 106-year-old building. If Urban Outfitters stays in the location for at least five years, the grant, structured as a deferred loan, will be forgiven. Should the retailer depart earlier, it would have to pay a prorated portion of the loan at 6 percent interest.
The funds are a loan to the group behind the Arnstein redevelopment, not to Urban Outfitters itself, and came from a federal Urban Development Action Grant that the city received in the late 1970s designed to be used for "blighted urban development."
Typically, such opening incentives – including loans and tax breaks – have been provided to destination stores such as Bass Pro and Cabela's or major traffic-driving anchors like Walmaart or Costco. Whole Foods is also receiving incentives to open its first stores in Detroit. But many other smaller locations appear to increasingly qualify for such incentives.
As in the case of the anchors, the Urban Outfitters location, set to open next spring, is expected to benefit many other largely independent retailers and restaurants downtown.
"I think Council understands for downtown's success to continue, it needs more retail, and a great way to do that is to bring in a major tenant like Urban Outfitters," council member Marshall Stair told Knoxville's Metro Pulse.
Critics wondered why a national chain was gaining a benefit from something they could easily afford. Many also wondered why local businesses weren't getting the support.
Speaking to knoxnews.com, Scott West, whose family owns several businesses on the Square, believes the money could have been used to support a star local business and retain the character of downtown.
"Why not incentivize the very businesses that make us unique, instead of the national chains that will make us Anywhere U.S.A.?" he questioned. "To argue a local entrepreneur couldn't be successful in drawing people downtown, that you have to get a national chain, is a bankrupt idea."
But other stores saw a benefit coming from Urban Outfitters bringing in a younger and hipper crowd. Scott Schimmel, co-owner of Bliss and Bliss Home, told knoxnews.com, "They're hitting a different demographic. I think it's one of those all boats will rise."
Eddie Mannis, the city's chief operating officer, told Metro Pulse the board hopes Urban Outfitter's arrival will encourage other major retailers to open up in the city. He added, "To be honest, it's not like there's a long list of national retailers knocking on our door. We wanted to do everything to accommodate them."
- Retailer Urban Outfitters is Coming Downtown With City Funds. Why Did They Need The Money? - Metro Pulse
- Downtown retailers have mixed emotions about Urban Outfitters - Knoxnews.com
- Why Have So Many Cities and Towns Given Away So Much Money to Bass Pro Shops and Cabela's? - The Atlantic Cities
- MEDC awards $1M incentive for Whole Foods store in Detroit - Mlive.com
- City OKs incentive deal for Mast - Winston-Salem Journal
- Kohl's further delays Galesburg project - The Register Mail
- DSW pledges 200 new jobs in exchange for tax break - Columbus Business Journal
- Council OKs tax incentive for Walmart - Columbus Business First
- Costco to open in Cedar Park - Austin Business Journal