Photo Credit: Susan Montgomery/Shutterstock
Back in 2004, Independence, Missouri issued more than $70 million in bonds in order to finance a new retail development anchored by a Bass Pro Shops, one of those mega-sized outdoors goods stores where you can buy everything from guns and tents to winter coats and hiking boots. But as occurs so often when localities bank on shopping as an economic driver, revenues from the development didn’t meet expectations. When the scheduled bond payments kicked in a few years later, Independence was forced to financially flail.
Starting in 2011, the city dipped into its general fund to cover a portion of the payments, meaning taxpayer money that could have paid for public services was instead supporting the development of a sporting goods store. After a couple of rounds of refinancing, things got better. Then Covid-19 hit. The post-pandemic projections look, well, ugly. From 2024 through 2029, the scheduled payments exceed project revenues — by about $2 million, at least. In 2029 the projected difference is about $7 million. Not until 2030 do the scheduled payments finally dip back below projected revenues.
Independence’s total municipal budget is around $300 million, so this isn’t chump change. Yes, it’s planning to take advantage of lower interest rates with yet another refinancing, but it may very well wind up right back in the same spot in a few years: throwing good money after bad to support a giant store that didn’t live up to the financial promises of its advocates.
Independence isn’t alone in finding itself in some trouble after subsidizing Bass Pro Shops. The company has made a habit of extracting resources from taxpayers while giving little back — aided by antitrust regulators who have turned a blind eye to the corporation’s growing power.
Bass Pro Shops is one of the most heavily-subsidized retailers in the country, trailing only Amazon and Sears, and coming in ahead of Walmart, CVS, and Target. State and local taxpayers have plowed nearly $400 million into supporting various Bass Pro stores dating back to the mid 1990s (though the bulk of that has been paid out since 2008).
The retailer goes after these subsidies based on the premise that its over-the-top stores are a tourist destination that draws in visitors who wouldn’t have been in town otherwise — which is a key factor in determining whether an entity can drive economic development.
As I explained in my book The Billionaire Boondoggle, several cities, including Harrisburg, Pennsylvania, Mesa, Arizona, and Memphis, Tennessee (where the Bass Pro is inside a literal pyramid) bought the corporate line, but didn’t experience the promised economic renaissance. While these stores do attract shoppers from outside the area, they don’t attract enough people who stay long enough doing other non-Bass Pro things to cause much in the way of knock-on economic benefits. And because the stores cannibalize sales from other local retailers, they don’t boost job creation either: Workers employed elsewhere just shuffle over to jobs at Bass Pro.
As Bass Pro has opened more and more stores, its ability to move shoppers long distances has diminished, in much the same way that the proliferation of casinos across the country has caused gambling to go from a tourist attraction capable of drawing people from all over the country to a much more localized industry.
“They go in and present this idea that they’re going to be drawing people from a wide radius, that they’re going to be effectively a tourist destination, and that people are going to cross state boundaries, and therefore they should be subsidized … [But] you don’t have to do anything further than look at a map to see their intention has been to build those stores everywhere,” Stacy Mitchell, co-director of the Institute for Local Self-Reliance and the author of Big-Box Swindle, told me when I interviewed her for my book.
But Bass Pro received also received a valuable assist from the federal government, in the form of anti-trust enforcers who enabled its growth. In 2017, Bass Pro received approval from the Federal Trade Commission to merge with Cabela’s, the other large builder of “destination” sporting goods stores. Though the FTC took a longer look than it does generally, it still eventually waved the merger through.
But concerns were raised, not just because the combined retailer now holds about 20 percent of the hunting, fishing, and camping sales industry, but because even more importantly, it joined two giant corporations doing what very few others in the space do: turning shopping for sporting goods into a full-on experience, with stores that have climbing walls, arcade games, restaurants, and even live animal exhibits. In that particular space, there aren’t really other serious competitors, and there’s evidence that the two corporations, before they joined, competed intensely to win customers via sales and markdowns.
There was, moreover, no real reason, then, for these two corporations to merge — they were both profitable at the time — other than to build a behemoth that would have even more leverage over communities, workers, and consumers, giving it more power to extract subsidies, seek out regulatory favors, and use “efficiencies” created by joining operations to lay off workers. Antitrust enforcers should have stepped in to stop the merger. But they didn’t.
Soon after the deal went through, Bass Pro announced plans to shut down Cabela’s headquarters in Sidney, Nebraska, dealing that town a huge blow (while financiers behind the deal got even richer). The now-merged corporation, called The Great American Outdoors Group, is continuing to gobble up competitors: A couple of months ago, it announced plans to buy Sportman’s Warehouse and its 112 locations. If that’s approved by regulators, it will give the company even more retail outlets across the nation.
So there was a failure here on two levels: too many local officials bought into a myth about a sporting goods store causing a tourism boom, while federal officials let the corporation pitching that story get bigger and bigger, accumulating more and more power. Independence is faced with the bill for all this failed policy now, but it’s a story that will likely be repeated again and again unless and until lawmakers at all levels of government stop buying Bass Pro’s tall tale, hook, line, and sinker.
This post initially appeared in a slightly different form on the author’s Substack, Boondoggle.
Pat Garofalo is the author of The Billionaire Boondoggle: How Our Politicians Let Corporations and Bigwigs Steal Our Money and Jobs, the Boondoggle newsletter, and the director of state and local policy at the American Economic Liberties Project.