Is Target missing the mark?
A group of Brooklyn Park residents claim that Target is taking millions of dollars in tax abatements and payments from the city but isn’t doing enough to benefit the community where its north campus is located.
Brooklyn Park residents who are members of the Northwest Community Collaborative initially caused a stir by holding a Valentine’s Day press conference claiming the city gave Target a “sweetheart deal.” The press conference was followed by a Feb. 26 listening session at North View Junior High in Brooklyn Park where more than 100 community members attended.
The Northwest Community Collaborative is a coalition of organizations that have come together to “seek the interests of the underrepresented and minority communities as they relate to the Target Corporation expansion in Brooklyn Park.”
“We want to make sure Target is not taking advantage of the residents of Brooklyn Park,” said Erasmus Tiampa Williams, a Brooklyn Park resident who was one of the speakers at the Feb. 14 press conference. Williams is a leader in the Liberian community, which has a large presence in Brooklyn Park.
Williams and others have claimed Target isn’t living up to its agreement with the city. He referenced the housing, the city park and other pieces of the development in Target’s plans that haven’t yet materialized. He also said Target hasn’t created the jobs it promised because the jobs it brought to Brooklyn Park were transferred from other locations.
“Job creation is different than job transfer,” he said.
A misunderstanding of the city’s agreement with Target appears to lie behind some of the assertions of Williams and others. According to the city, Target is meeting every contractual obligation.
But whether Target is living up to the letter of the law or not, Williams and others want ongoing conversations about how Target can help the community giving it a tax break.
What was the deal with Target?
There has been some confusion regarding what the city’s agreement with Target actually entailed. The agreement is complex and multifaceted, but here are the essentials:
Under the original agreement, the city did not simply give money to Target. In fact, the city still received some additional property tax revenue because of the new construction.
The agreement said Target would get a 20-year tax abatement on each new building. In other words, it would be reimbursed for a portion of its city property taxes on those buildings. It would not be reimbursed for any taxes levied by other entities, such as the county and school district.
Right now Target receives abatement on one building.
In the years after construction, the percentage of the tax abatement was scheduled to go down incrementally. The first year Target received a 100 percent abatement, which meant it was fully reimbursed for city property taxes on that building. The following year’s abatement dropped so Target was reimbursed for 95 percent. The third year, and for the rest of the 20 years, Target was supposed to get back 90 percent of the city taxes on that building.
There was a caveat: the abatement would go down if Target didn’t meet the job creation goals. For the purpose of the agreement, jobs created meant jobs the company brought to Brooklyn Park, whether they were new jobs or transferred from another campus outside the city.
If Target didn’t meet job creation goals, the city would reduce its future reimbursement payments. How much those payments went down depended on how many jobs were created. The closer Target got to meeting the goal, the less would be taken out of future payments.
Target has missed employment goals and as a result gets less money back. If it meets those goals in the future, however, it can once again be reimbursed at the 90 percent rate.
After 20 years, the city will keep all its taxes on the new buildings. No matter when it’s built, no building will qualify for abatement beyond Feb. 1, 2038. The benefit to the city is that it will end up with a significantly larger tax base, as well as a large development that should spur further growth.
The agreement includes a few other benefits to the city.
If the development requires a water tower or police substation, Target must provide the land at no cost.
Target must also develop and dedicate 5 acres of city park land for every 50 acres of developed Target property located west of West Broadway Avenue. That requirement hasn’t been triggered yet because Target has only built east of West Broadway.
The agreement also refers to other “planned improvements,” such as retail space, a hotel and housing.
But what many don’t realize is that Target isn’t obligated to build any of them. Rather, the contract states “the timing, nature and scope of the various Development Phases shall be dictated by market forces.” The plans are only a guide and a vision of what could be possible.
In December 2011, the agreement with Target was renewed at Target’s request, and changed slightly at the city’s request. Instead of having taxes reimbursed on future construction, Target will be paid the same amount of money from a different revenue source. That revenue source is Tax Increment Financing (TIF) money.
The city sees this as a benefit because the state tightly regulates how TIF dollars can be used. If the city pays Target out of TIF funds, then all of the property taxes Target pays will go into the general fund, where they are more useful to the city than TIF dollars.
The full agreement with Target is available online at brooklynpark.org/target.
‘Come to the table’
Some members of the Northwest Community Collaborative come across as more aggressive and combative than others. But they seem to agree on a common theme: Target and the city should “come to the table” to discuss partnerships that can benefit everyone.
Joy Marsh Stephens is chair of the northwest region of ISAIAH, a member organization in the Northwest Community Collaborative.
She explained her position saying, “Ultimately what I feel we want is a chance to say … welcome to our city. We’re glad to have you. These are the needs we have, and we’re acting in good faith that Target, based on their reputation, cares about the community they’re in.”
Target spokesperson Molly Snyder said the company does care about the communities where it does business.
“This project reflects a significant investment in Brooklyn Park bringing the community additional jobs and revenue,” she said in an email. “Target remains committed to being a good neighbor in all the communities where we do business. We place a high value on creating a diverse work environment and focus on hiring qualified applicants who match the skillsets needed for particular positions.”
Snyder pointed out Target was named in 2012 as one of the top 50 companies for diversity by DiversityInc magazine and received the “2011 Diversity Leader Award” from “Profiles in Diversity Journal.”
But Williams said the Brooklyn Park community has concerns that should be addressed. So he’s trying to get the attention of city officials.
“The best thing to do is to come together and respectfully engage our city officials … so they can call on Target,” Williams said.
One of Williams’ top priorities is to see if Target can help create jobs for Brooklyn Park residents.
Brooklyn Park resident Wynfred Russell, of the African Career and Education Resource Center, said that’s also a goal of his organization, which is a member of the Northwest Community Collaborative.
Russell would like to see Target work with local community colleges to create a job training program that would enable qualified Brooklyn Park residents with an IT background to train for the specific jobs Target has at its north campus. He said North Hennepin Community College and Hennepin Technical College in Brooklyn Park have expressed potential interest.
“We’re not asking for handouts,” Russell said. “… We’re asking, ‘How can we partner with Target and the city of Brooklyn Park to facilitate the training of Brooklyn Park residents to be qualified to work at Target and other employers in Brooklyn Park? … The only missing piece is getting Target to the table.”
Russell said such an arrangement would benefit everyone.
He also said community engagement around such issues is crucial.
That’s why Stephens facilitated the Feb. 26 listening session, which was intended to gather community input about the city’s priorities, the agreement with Target and future community benefit agreements.
More than 100 people attended the session, and Stephens said there were common themes, including the need for jobs, education and affordable housing.
Brooklyn Park City Manager Jamie Verbrugge, who attended the listening session, heard some of the same themes.
“I thought the responses were very thoughtful,” he said. “Things like job training and pre-K education, and a lot of things that have to do with the social and economic underpinnings of the community.”
Verbrugge said it is important for city leaders and residents to have such conversations and that he looks forward to seeing the report the Northwest Community Collaborative compiles based on listening session results. He said he doesn’t think the group or its goals are in conflict with the city.
“As a leader in the city organization, I am very willing to sit down and have the conversation with them,” he said. “If there are differences in terms of how we interpret a community benefit agreement, I think the thing that unites us is everyone is interested in making sure Brooklyn Park is a thriving and successful community.”
Stephens shares his optimism.
“I have enormous confidence in the power of people to come together, to share their stories, and to be persistent in a fight for greater justice,” she said.
As of March 1, there had been no official follow-up communication between the city and the collaborative, but Verbrugge expected to call the next week and schedule a meeting.