July 6, 2007
Cabela's Paying Out the "Big Bucks"
The Cabela's hunting/fishing/outdoors outfitter superstore located in Buda, Texas, is apparently not doing so well. For the second year in a row, the store has missed mandatory employment targets set as a condition of subsidies given to the store by the City of Buda, Hays County and the State of Texas (via Governor Perry's Texas Enterprise Fund).
In a nutshell: To date, Cabela's has received over $61 million in government subsidies (read: taxpayer money) as an incentive to build the massive store in Buda. As part of the subsidy contracts it signed with the City of Buda, Hays County and the State of Texas, the Buda Cabela's agreed to create and sustain a minimum amount of full-time jobs at the store. For the second year in a row, the Buda Cabela's has fallen short of this requirement, and for the second year in a row, Cabela's is being forced to give some of this money back as a penalty under the contracts that it signed.
Because of its 2007 employment target shortfall, Cabela's must now pay Buda, Hays County and the State of Texas nearly $130,000. Additionally, the store must forfeit $200,000 in additional state funding. The Governor's office has taken a hard line here, saying that if Cabela's falls short again, it will have to forfeit even more government funding.
A spokesperson for Cabela's claims that the employment targets set in the subsidy contracts from the city, county and state were set in an arbitrary manner, and that the employment targets do not take into account seasonal employment flows. One has to wonder if this concern was voiced in the original subsidy contract negotiations with Buda, Hays County and the State of Texas. Surely Cabela's could've built its behemoth superstore anywhere it wanted to (let's be honest here: any small Texas town would welcome a massive hunting/fishing/camping store for the same reasons that any major urban area would welcome a Whole Foods)...so why did it agree to build in Buda, signing a set of government subsidy contracts containing mandatory employment targets that it saw as "arbitrary" and unfair? Perhaps because, at the time, Cabela's saw the terms of the contracts as fair?
Or could it be that Cabela's is only saying that the employment targets are unfair now, since it simply couldn't meet them?
What do you think, Austinites?
*Image of Cabela's Buda Store courtesy of gooskimo on flickr. Image of "big buck" courtesy of phillips8589 on flickr.
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Fair or unfair, that guy is totally going to f that deer corpse.
...tenderly, he envelops the soft, yet firm, ear of the buck with his rough, work-hard hand, calloused from years of riffeling....
So these con artists got $61 million in corporate welfare, and now they're being "forced" to pay back $130,000 of it for not living up to their end of the deal. Sounds like a perfect scam.
I guess I'd rather fork over my money to las manitas.
Interesting story. I bet Cabela's got incentive package offers from tons of towns from all over Texas. I wonder why Cabela's ended up choosing Buda, of all places?
Hmm. Texas Enterprise Fund. Does anyone else smell another "Perryism" here?
At least they were smart of enough to link objective metrics to these handouts and have payback clauses (such as they are) if they weren't met. If the city of Austin is going to insist on continuing to offer corporate welfare they could learn a things or two about the structure of this deal so at least there are clauses in place that get in paid pack if the deal turns out to be a lemon. Forgivable loans and other kick backs to for profit businesses that owe their success to being in Austin to begin with make baby Jesus cry.
i had never seen or heard of so many government incentives for business before moving to austin. maybe i just had my head in the sand, or maybe they're more common here than elsewhere, or maybe austin media sources are better at raising awareness about them. whatever the case, i don't like it. if your business can't meet legal or financial requirements, suck it up and meet 'em or pay the price.
i think the $61 million figure may be a little misleading, though. it doesn't sound like cabela's has already received that much; rather, it seems like the company would have had the potential to receive that much money if it had met the required job thresholds. i think that figure also includes the $20 million project that improved i-35 around cabela's and neighboring businesses (http://www.statesman.com/search/content/news/stories/local/07/06/0706cabelas.html), as well as an additional $35 million from related construction/road improvements (http://www.austinchronicle.com/gyrobase/Issue/column?oid=oid%3A275335), and those weren't exactly direct payments to the company (or maybe they were?). appears that cabela's was to receive $600,000 directly, and they're not getting the last $200,000 of that because they're not living up to their promise of job creation.
there's some more interesting general info about cabela's here: http://www.goodjobsfirst.org/corporate_subsidy/cabela.cfm. it would be fascinating if we could track the actual economic impact of some of these stores...
"This deer may be dead... but I'm in heaven," he quoth as he delicately removed his other gun - his love gun - from its holster with a care typically reserved for a loaded piece.
Naked as a fawn in the womb, exuding the primal joy that only he shall know, the Hunter tips his head back to cry out to the woods and everything in it, "Grunt. Grunt,".
Later, while uncomfortably sampling the venison sausage with the boys back at the campsite, Leroy led the first prayer "Thank God for the 2nd Amendment, or else I'd never have safe sex..."
Listen up slackers! The time is now for jobs at Cabella's. Working for an overstaffed company with job security is amazing. I know because I've been doing it for the last two years at my work.
kenneth1 has it right. Why should Cabela's care if they have to pay back .2% of the money given them? They make more than that in a day, I'm sure. And this stuff happens all over. My home town in upstate NY gave Miller a 10 tax free ride to build a plant. When the 10 years was up, they closed the plant. At least this is a better deal than that.
Looking up from his dirty business, the Hunter reared his head back to face the moon, high overhead. He knew he had sinned against natural law, but there was no way to turn back now.
"Why was I born!?" he crowed thrice, questioning the celestial bodies with deer's blood smeared recklessly across his face. And Zeus, splendidly bearded with staff in hand, looked down from his throne, only to wave his ringed hand with disgust and smite the Hunter for his gruesome deeds.
When a fellow hunter complimented his "nice ten-pointer," Bubba replied, "The deer aint bad either."