walkitout (walkitout) wrote,
walkitout
walkitout

big box store in the twin cities maybe not happening

h/t Calculated Risk (that means, I was reading Calculated Risk's blog, and saw a link to this for other reasons).

http://twincities.bizjournals.com/twincities/stories/2009/07/20/story1.html

Basically, a SuperTarget has been planned on the eastern edge of St. Paul (which is the eastern of St. Paul/Minneapolis) for several years, and Target the company (I keep wanting to call them Dayton Department stores, which probably means I'm old) decided they need a steep discount from the developer (?) to go through with the project, and the developer is going whyyy?????? Why now?

Now, Steiner predicted that the big boxes at the edges of exurbia would be emptying out. He focused on WalMart. His argument revolved around cost of fuel. There are a lot of reasons to _not_ build a big box store in this economy. I just thought this was kind of interesting and here's why. On the one hand, if gas right now is crazy expensive, or anticipated to become crazy expensive, it would make a lot of sense to shift towards gas sippers instead of gas guzzlers when contemplating a car purchase (or any number of other things). On the other hand, if you can get a sufficient discount on the gas guzzler compared to the gas sipper, it might make sense to buy (and drive as little as possible) the guzzler anyway. Which is exactly why SUVs got cheap (the buyers won't buy unless they get enough of a discount to pay the gas cost differential) and more efficient cars got expensive (you can demand a premium for the cheaper run cost.

Similarly, if Target is going, we don't know how this store is going to play out, one way to ensure they don't get too screwed no matter what is to get a huge discount on building it. And they figure it's worth asking for it, because there's so little development happening that the developer might be willing to take it on the chin for any work at all.

It's not that I don't believe in the market. I mean, look at this in action.
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