How much a declining mall can cost a community in sales tax revenue: almost $20 million a year

The decline of Stratford Square Mall in Bloomingdale, Illinois meant the sales tax revenue for the community dropped dramatically:

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Stratford was still a cash cow in 2012, generating $20.3 million in sales tax revenue. But that number has quickly dwindled in the last 10 years, with the mall producing just $466,080 in 2021, village officials say.

Dead malls” or struggling malls are a problem in numerous American communities. Popular for decades, these properties provided shopping, entertainment, and social space for visitors, jobs, and tax revenues for communities.

As communities look to transform these properties (and the possibilities are broad), one large factor will be how much tax revenue the new land use generates. Can they ever come close to generating that kind of sales tax revenue? Restaurants and entertainment or experiential spaces can help close that gap. Residences, however, do not bring in that kind of money (unless those new residents shop regularly at local businesses). If not, what other clear benefits will the reconfigured properties offer the community?

Going off the grid in a suburban setting

What issues might arise if a suburbanites want to take their residence off the grid?

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Many off-gridders have glanced at their water bills and decided they’d rather use the water that falls from the sky for free, but some states make rainwater collection systems very difficult to install in your home, or have strict limits on how much rainwater can be harvested and how it can be used (for example, Colorado only allows certain properties to collect 110 gallons, which can only be used outdoors). For waste management, installing a septic system in a crowded urban neighborhood will be nearly impossible, and many states have extremely strict regulations surrounding the installation of composting toilets (not to mention extremely strict regulations about what you can do with all that waste once you’ve collected it).

Additionally, local municipalities might have laws that supersede or enhance statewide restrictions, and Home Owner Associations (HOAs) may have rules that prevent you from making the changes necessary to your home. These rules can beprettycomprehensive, too—some HOAs don’t allow clotheslines for drying clothes, for example, and can even forbid solar panels for aesthetic reasons. Condominium boards may also resist some of your off-grid choices. Bottom line: before you do anything, check the local laws and regulations that might apply to you.

Finally, while installing solar panels on your property is more or less legal in every state (and many states encourage it), not all states or local municipalities will allow you to actually disconnect from the power grid. If you feel it’s important to literally be off-grid, you’ll need to do some digging before you assume anything; and in multi-family structures like condominiums it might even be physically impossible to accomplish. Of course, the flip side to remaining connected is that in many cases you can sell excess electricity back to the grid—and if your solar rig fails at halftime during the Super Bowl, you’ll still have power…

Of course, if you’re going to grow your own food in the city, you’ll need enough space for that, too. It’s not impossible to find city homes with yards or large outdoor spaces where you might be able to grow your apocalypse garden (and even raise chickens!), but those houses will obviously be more expensive. And your property deed or local regulations might limit your ability to have “livestock” of any kind on your property (and your neighbors may or may not be excited about those chickens).

Three things strike me after reading this:

  1. Suburban life is ruled by a series of local regulations. Suburbs on the whole might have similar guidelines and expectations compared to other kinds of places but local control can lead to oddities.
  2. The ability to live in one’s own residence is connected to community regulations and a social contract with surrounding residents. This leads to two questions: can a resident go off the grid and should a resident go off the grid? What would the neighbors think?
  3. I wonder how many suburbs are prepared for this possibility. Even if regulations make it more difficult to go off the grid, what would happen in communities if someone really wanted to pursue this and they had the resources and means to pull it off?

Does a “medium sized suburb” have 20,000 residents?

I recently saw a headline comparing a group of people to the population size of a suburb:

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Nearly 20,000 Cook County residents holding revoked FOID cards — enough to populate a medium-sized suburb

More population comparisons from later in the story:

Arthur Jackson, first deputy chief of police for the Cook County Sheriff’s Police Department, told legislators over the years, 33,000 Cook County residents’ firearm owner’s identification cards have been revoked because of violent felony convictions, domestic violence charges or serious mental health issues.

That’s more than the entire population of Highland Park in Lake County.

Of that total, “nearly 20,000” have not turned in their cards — more than the population of north suburban Deerfield.

“Medium” is between “small” and “large.” The smallest suburbs can be just a few hundred or a few thousand people while the largest suburbs can have several hundred thousand residents. Is nearly 20,000 in the middle?

The comparisons to specific suburbs might be more helpful, particularly if people know something about Highland Park or Deerfield. They can picture these communities and then make the connection to the number of people with revoked FOID cards.

Other comparisons that might be better: the number of people in a basketball arena, the number of students at a college, the number of people at a concert.

I am not sure that a “medium-sized suburb” is clear enough to help people understand the number at question here.

10 of 30 NFL teams play in the suburbs of the city whose name they hold

Ten NFL teams have a big city in their name but play in the stadiums located in the suburbs of that big city. Here are the 10 (sourced from here and here):

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-Buffalo Bills play in Orchard Park

-Dallas Cowboys play in Arlington

-Los Angeles Chargers play in Inglewood

-Los Angeles Rams play in Inglewood

-Miami Dolphins play in Miami Gardens

-New York Giants play in East Rutherford (New Jersey)

-New York Jets play in East Rutherford (New Jersey)

-San Francisco 49ers play in Santa Clara

-Washington Commanders play in Landover (Maryland)

Two bonus suburban teams: the Arizona Cardinals, not named after a city but a state, play in suburban Glendale and the New England Patriots, named after a region and not a city, play in suburban Foxborough.

If the Bears end up in Arlington Heights, that would push the number of suburban NFL teams up to 13 total.

Tax breaks and suburban and Sunbelt growth

Wells Fargo is seeking a tax break to construct a regional office in suburban Irving, Texas:

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The Irving City Council will vote Thursday on millions of dollars in economic incentives to support the huge campus that’s expected to house 4,000 workers…

The agreement with Irving calls for Wells Fargo to “occupy at least 800,000 square feet of office space in the newly constructed buildings by December 2026. The proposed new office development would serve as a regional hub for Wells Fargo.”…

Irving proposes in its economic incentive agreement to give Wells Fargo up to $19 million in tax increment finance district funds to build a 4,000-space parking garage and “to reclaim a portion of the lake between the two adjacent parcels on the south side of Promenade Parkway.”

A separate economic incentive of up to $12 million would support construction of the Wells Fargo offices.

The project will increase the city’s tax “property value by a minimum of $200,000,000,” according to the City Council filings.

I can imagine the argument from Irving and similar communities about why the tax breaks are worth it:

  1. Such a move helps entice national and international brands to your community.
  2. Such a move brings jobs to the community.
  3. The tax breaks will be outweighed by the tax and physical improvements to the property in question.

All of this helps boost the status of the suburb and the economic prospects in the community.

On the other hand, tax breaks have downsides:

  1. Lots of communities offer tax breaks. The company may be less interested in this specific community and more interested in how much money they can get from a community.
  2. Less money will come into the community than if no tax breaks were offered.
  3. At some point, the tax breaks run out and then what happens to the company and the newly developed property?

As the title of this post asks, how much development in suburban areas like Irving involves tax breaks? Would Wells Fargo locate in Irving or in the region without tax breaks?

Two charts showing the growing racial and ethnic diversity in the American suburbs

William Frey of the The Brookings Institutions analyzes 2020 Census data and shows the suburbs are increasingly diverse in terms of race and ethnicity. One chart:

The percent of Asian Americans, Latinos or Hispanics, and Blacks living in the suburbs has increased every decade since the 1980s. The percent of whites living in the suburbs has stayed stable.

A second chart looks at the racial and ethnic changes across different kinds of suburbs:

While the first chart showed increasing diversity in suburbs in general, this one helps show that this racial and ethnic diversity is not evenly distributed across kinds of suburbs. Even as the percent of white residents is decreasing in all kinds of suburbs, high-density suburbs have the most racial and ethnic diversity followed by mature suburbs.

Frey sums up his analysis this way:

Among those of a certain age, the term “suburban America” conjures up the image of mostly white, middle-class, politically conservative developments, differing sharply from a more racially diverse urban America. But the 2020 census places an exclamation point on the fact that suburbs now reflect the nation’s demographics, with respect to racial make-up and most likely on related dimensions of class and politics.

The growth of America’s suburbs embodies the nation’s population growth, accompanied by greater diversity due to the in-migration of new and long-standing minorities from nearby cities, from other parts of the country, and from abroad, as well as a rising multicultural youth population as families of color—like their earlier white counterparts—find the suburbs an ideal destination for raising children and forming new communities. From this perspective, the suburbs, perhaps more than anywhere else, are symbolic of America’s rising diversity. 

Complex suburbia continues.

McMansions as part of or outside of a changing suburbia?

This description of the changing American suburbs includes McMansions:

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The demand for something like urban living is real. Even at the outer edges of growing metro areas, mixed-use walkable developments pop up alongside familiar subdivisions and McMansions. “Mixed-use centers—often in suburban locations—continue to be built from the ground up in many communities across the US,” wrote the Congress for the New Urbanism in 2019.

As more immigrants and millennials become suburbanites, and as Covid and remote work give the suburbs another growth spurt, they are evolving into something different. Between 2019 and 2020, the share of millennials who live in suburbs increased by 4 percentage points; and in 2014, more than 60 percent of immigrants lived in suburbs, up from just over half in 2000.

Many communities that were once white, exclusionary, and car-dependent are today diverse and evolving places, still distinct from the big city but just as distinct from their own “first draft” more than a half-century ago…

If a “second draft” of the suburbs is now being written — at least in some of America’s growing and expensive metro areas — what might it actually look like?

This is part of the complex suburbia we have today. Where do McMansions fit into this? The selection above suggests “mixed-use walkable developments” are near McMansions. But, what happens to the McMansions in the long run? Here are a few options:

  1. The McMansions continue in their neighborhoods for those that want them. Even amid proclamations that McMansions are dead, there are some homebuyers and suburbanites that want such homes.
  2. McMansions themselves are altered in ways to fit the new landscape. Perhaps they are subdivided into multiple units for more affordable housing. They could be added to. Their properties could host accessory dwelling units.
  3. McMansions are demolished and replaced with something else. This could be because the quality of the homes does not stand the test of time or the land is more valuable used another way (some of the teardowns become teardowns).
  4. Some McMansions live on through historic preservation marking a particular era of housing and American life.

For some, McMansions represent the peak of an undesirable suburban sprawl and excess. For others, they are homes that provide a lot for a decent price. Their long-term fate is to be determined both by those who like them and those who detest them as the suburbs continue to change.

How many suburbs will be willing to replace suburban office parks with denser housing?

If the golden age of the suburban office park has passed, what will some of the empty properties be used for? One option is denser housing:

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It will mean taking land long zoned for offices, and allowing townhomes to be built among them, or permitting apartments or industrial-scale warehouses for the first time. Amid a nationwide housing crisis, many obsolete office parks could be ideal sites for denser housing.

However, this is a very pertinent issue:

The problem for some suburban officials: “It’ll be, ‘Oh, what do you mean we can’t just zone for single-family homes and offices? That’s our thing. That’s why we exist,’” said Tracy Hadden Loh, a researcher at the Brookings Institution. “So now it’s like an existential crisis.”

This is an issue that comes up for numerous kinds of large suburban properties, whether they are shopping malls, golf courses, or grocery stores: how to convert a vacant property into a useful long-term use? The number one goal is probably to generate significant property tax and sales tax revenue. In other words, to keep it at its original as approved by the community years before.

But, if that is not possible – and communities might go years trying to fulfill this vision – then the discussions get interesting. Expensive single-family homes, fitting with the upscale suburban character of some suburbs, would fit in. Zoning protects single-family homes for a reason: suburbanites and suburban communities prefer these homes and their lifestyle.

However, single-family homes can bring more children to local schools and add to the loads of local services. They do not necessarily produce the revenues that offices and retail do. Denser housing is even less desirable because it adds even more residents, which can add to community services and traffic, and some suburbanites are concerned with apartment dwellers.

My guess is that mixed-use redevelopment will be a popular path a number of these communities will try to pursue. Replace that office park with a “metroburb.” But, it remains to be seen how many such developments are viable and how eager suburban leaders and residents are to pursue them.

How much the big city mayor needs to fight to keep the major league team

Chicago Mayor Lori Lightfoot has publicly stated what the city could do to keep the Chicago Bears:

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Via Sports Business Journal, a Chicago mayoral committee will recommend that the city consider the feasibility of putting a dome over Soldier Field.

A dome, as reported by Crain’s Chicago Business, could cost between $400 million and $1.5 billion.

Other possibilities include upgrades to the stadium (including significant rebuilding of certain parts of it) and selling naming rights to generate revenue for improvements.

The Bears are most interested in pursuing plans for suburban Arlington Heights.

In the long run, it is not probably not worth it for the city and the others to spend hundreds of millions to keep the Bears. The team would benefit the most from new arrangements. The money spent on eight Bears home games a year will be spent elsewhere in the city. The team is not leaving for another market but just for the suburbs.

At the same time, losing the biggest team in town to a suburb is not a good look for leaders. The Bears have played in the city for a century. They are the most popular sports team in town. Soldier Field hosts other events but it has been the home of the Bears for decades. The loss of the Bears could be added to the narrative of losing companies and residents.

Discounting whether the offer from the city is a viable one – putting a dome on Soldier Field is no easy task – I think this is a necessary political move. The mayor and city leaders need to make a good offer to save face. The big city leader cannot let the big team leave without a fight. And ten years from now, when the Bears are playing in a suburban property that earns the team even more money and the city of Chicago has moved on, there may still be lingering blame for those who let the Bears leave no matter what offer or public statements they made.