Tuesday, March 09, 2010

Menards Update

It turns out that the QCTimes articles about the Menards dark store agreement were a bit inaccurate. This article said, "Worried that the 53rd Street store would sit empty and be an eyesore for months or years, Davenport aldermen demanded the company have a buyer or renter for its existing store before starting construction on the $15 million project." When I read that, I thought that it wasn't how I remembered it. There are indeed requirements, but none of them explicitly disallow Menards from building their new store before finding a new use for the old one.

Here's a PDF that you can download of the actual agreement from both 2005 and 2007. The first one was regarding Menards potentially moving to Elmore, and the second one has to do with the site on North Brady.

Download the actual pdf here:
http://www.mediafire.com/file/ioytzmigjyr/Menard's DarkStore Agreement.pdf

16 Comments:

At 3/09/2010 11:05 AM, Anonymous Anonymous said...

As usual the Times has it wrong. Ickes reading her own wrong news.

 
At 3/09/2010 6:33 PM, Blogger Celia said...

Semantics.

The agreement gives the city carte blanche to determine if Menards met the requirements to appropriately market and find a new buyer or leasee for the store.

In other words, while the words don't specifically say they prohibit it, the affect is the same.

Here's a question for you: if that is NOT the case, then why the need for the resolution to dissolve the agreement?

And why did Ald. Meeker in his direct quotes state that the company could not move until it had secured a new tenant if that were not, indeed, the case?

 
At 3/09/2010 7:31 PM, Anonymous Anonymous said...

Thanks for pointing out what the agreement said, QCI. And thanks to Celia for explaining why it needs to be dissolved. My question is: are there ANY terms a city could put on a dark store that a company would accept? If so, what?

 
At 3/09/2010 7:39 PM, Blogger QuadCityImages said...

Requiring them to find a new user for the land before starting construction on the new store would be crazy, and that's not what the agreement was.

That said, requiring that they pay someone else to market the property, when corporate Menards surely has people who normally do that, is an expense that I'm sure they'd like to avoid. Part of the agreement also said that the city could keep its property taxes fairly high on the old property. This is another cost, as generally they would try to depreciate that land as fast as possible to lower their taxes. So the requirements were not overly harsh, but they did have a cost.

Like I said before, at the time they were the right thing to do, because the city was in a good bargaining position. Now, the economy sucks, so any business offering to bring jobs is in a good bargaining position, so the city is willing to drop the requirements. It all makes sense to me.

 
At 3/10/2010 8:18 AM, Anonymous Anonymous said...

QCI: Did you mean to use the word depreciate, or did you really mean devalue? Menards depreciation schedule would do nothing to their property tax bill, but they could devalue their assessment and then their taxes by neglecting the property like Kays Merchandise and the Geifman Store did. They let it devalue itself by letting the little bangers deface the property.

Some refer to it as demolition by neglect.

 
At 3/10/2010 8:46 AM, Blogger QuadCityImages said...

Yeah, that. I'm no accountant or MBA. I just know that its in the interests of property owners to let their unwanted property go downhill because then it (and its neighbors) property taxes go down. When I think of demolition by neglect, I generally think more of someone that actively wants to tear down a structure but can't get permission, so they allow it to fall apart. Such as Palmer, or Scott County on 5th street...

 
At 3/10/2010 10:08 AM, Anonymous Anonymous said...

News for you Image, a house does not go down in taxes when the neighborhood around it goes to pot.If you were paying taxes you might know this.

 
At 3/10/2010 11:35 AM, Anonymous Anonymous said...

WHO CARES!

Let them build the new store - its more real estate taxes, and likely more sales taxes for the City. The old building will get filled in sufficient time, as the location is good - Menards just outgrew it.

Goodness! Holding back a successful local business from being more successful...what the heck are people thinking?

Of course, we want all buildings to have occupants, as it makes the City look good. But, the worst-case scenario is additional tax revenue!

 
At 3/10/2010 2:10 PM, Anonymous Anonymous said...

QCI: The reason I said demolition by neglect refering to the old Geifman Grocery Store is that it deteriorated so badly that it was just torn down, and now is a vacant lot.

 
At 3/10/2010 5:00 PM, Blogger QuadCityImages said...

10:08, you're definitely wrong.

While it may not happen around here much, its happening all over the country. When empty, foreclosed homes start taking over neighborhoods, it absolutely affects the assessed value and therefore taxes of neighboring homes.

 
At 3/10/2010 9:02 PM, Anonymous Anonymous said...

10:08/Keith?

It is nice to know that renters don't pay property taxes, the landlords do and don't pass on the cost to the tenants.




RIGHT

 
At 3/11/2010 1:30 PM, Anonymous Anonymous said...

I asked the question at 7:31PM, and I'm not sure I got an answer. So, yes, there are things the city could do to encourage them to take care of the dark store that a company would accept? I asked because almost anything could be construed as harsh to business

The idea to keep property taxes on the old property pretty high seems logical and concrete. They are already paying property taxes on the property, the question moving forward is how much. So it seems very fair to me for that to be a negotiating point. Anything else seems tricky. Keeping the taxes high would also encourage them to market it on their own.

 
At 3/12/2010 8:10 AM, Blogger QuadCityImages said...

For some unknown reason the QCTimes is continuing to act like what they've been saying is true. Now they've had an article, a Barb Ickes column, and an editorial all repeating the falsehood that Menards was required to find a new use for the property before moving.

Not very impressive, QCTimes.

 
At 3/12/2010 9:52 AM, Anonymous Anonymous said...

QCI, Quad Cities Resident Slow Learner is finally waking up to the Times. Pretty impressive.

 
At 3/12/2010 11:17 AM, Anonymous Anonymous said...

You haven't answered Celia, QCI?
If the requirement doesn't exist, why are they now removing it?

 
At 3/12/2010 5:59 PM, Blogger QuadCityImages said...

I didn't think I needed to answer Celia, because if you read the document I linked to, there's really no question.

There were indeed some limitations on Menards in order for them to get their rezoning. Things like keeping property taxes at the old site the same, requirements for marketing the old site to potential buyers, etc. There is nothing saying they can't move.

Alderman Meeker apparently feels that these requirements are the reason they haven't moved forward with the new site. From what I've heard from multiple sources, this is only a small part of the issue, with the economy as a whole being probably a larger reason for the delay. If that's the case, Alderman Meeker's efforts may not do anything whatsoever, even if the requirements are removed.

Placing limitations on their current site in exchange for rezoning their future site does not prevent them from moving. That's like saying that requiring someone to get a construction permit prevents them from building a new house.

 

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