Borders Proposal Meets Opposition

AUSTIN-A community group is protesting tax breaks for a chain store that is scheduled to join Whole Foods Market Inc. in an office-retail development at Sixth Street and Lamar Boulevard. And the group says it has numbers to back its objections.

The group, Liveable City, said that the presence of a Borders Inc. store would do more to harm Austin’s economy than help it, especially if it takes sales away from locally owned BookPeople and Waterloo Records stores near the planned development. Liveable City is a non-profit group seeking to improve Austin’s quality of life.

The Schlosser Development project is to be anchored by an 88,000-sf Whole Foods store and an adjacent seven-story office building Whole Foods will use as its headquarters. The City of Austin has granted $2.1 million in development incentives for the project. The incentives include fee waivers, water and wastewater reimbursements and drainage improvements.

Liveable City said the Borders store, whose development is aided by the city incentives, will take sales away from BookPeople and Waterloo and therefore from the local economy. Borders is based in Ann Arbor, MI.

The annual economic impact of Waterloo is $4.1 million and BookPeople, $2.8, according to a study compiled for Liveable City by Dan Houston of the Civic Economics firm. The return from a Borders store would be $800,000. The difference comes from the local stores keeping more money in the local community. The study estimates that Borders will divert $11 million to $14 million BookPeople and Waterloo over five years.

“The proposed Borders at 6th and Lamar will yield a net loss to the local economy,” said Houston. “Moreover, previous decisions have placed the city in the position of subsidizing such an outcome.”

Liveable City suggests that more study be given to incentives for the Sixth and Lamar project and for others in Austin that could have a similar impact on local businesses.