Retail giant Shopko is once again interested in opening a box store on Main Street in Hailey. Shopko Stores Operating Co. is a $3 billion retailer that operates more than 330 stores in 21 states.
The company spent months in talks with Hailey Community Development Director Micah Austin last year before abandoning plans to build a 34,900-square-foot building at a site on north Main Street across from Albertsons. That site will soon be home to The Cottages senior-care facility.
“They [Shopko] are back, but it will be an uphill battle for them,” Austin said at a City Council meeting Monday. “The property will likely need an up-zone.”
Austin said he does not usually discuss pending developments with the public, since doing so could jeopardize deals between businesses and developers, but in this case he wanted to set the record straight regarding Shopko’s continuing plans.
Last fall, after Shopko representatives said they were no longer interested in Hailey, Austin said the city does not usually seek out national chain brands because it wants to support local businesses, but it has no authority to prohibit them.
Hailey residents and political leaders have often spoken out against allowing Main Street to become a typical American commercial strip, similar to Blue Lakes Boulevard in Twin Falls, where box chain stores and franchise restaurants dominate. When McDonald’s restaurant came to town 12 years ago, there was resistance from the local community.
Yet O’Reilly’s auto parts store, a franchise operation now at the south entrance to town, was specifically catered to by the Community Development Department, which initiated a zoning change for the developer.
Though some residents object to Main Street slowly becoming a homogenized commercial strip, local leaders cannot control who does business in the most visible places in town, as long as the business follows zoning regulations.
The city does limit the maximum square footage of single buildings in the Business zone to 36,000 square feet, which prohibits the biggest box-store chains. Albertsons grocery store in Hailey is 35,800 square feet.
The city would allow a building up to 50,000 square feet if it housed separate businesses.
Austin said in an interview that he is not sure where or what size building Shopko would like to build in Hailey.
“I do know they are interested in highway frontage,” he said.
He said likely sites exist on the east side of Main Street, including one parcel near the AmericInn that was recently cleared of old buildings.
The only way the City Council could prohibit a box store on that site would be to deny a rezone from Residential to Business zoning.
“It’s zoned Residential,” Austin said. “It’s a holdout, but it’s still Residential.”
Austin said commercial development is essential to the city’s economy.
“A healthy economy consists of a balance between commercial and residential uses,” he said. “Studies have shown that for some residential neighborhoods, more money is spent on services than is paid in taxpayer dollars from those neighborhoods, whereas commercial and industrial uses pay for themselves over and over again while providing the services that residents in Hailey demand.”
Austin provided a comparison between two similar lots on Main Street in Hailey, a .18-acre parcel at the north end where McDonald’s is located, and a Residential-zoned .25-acre lot at the south end with a $190,000 house on it. The McDonald’s is bringing in $11,000 in tax revenue each year to the city, while the house is bringing in only $1,700, or as little as $1,000 with a homeowner’s exemption, he said.
Austin said that although big national retailers and chain stores and restaurants could bring increased revenue to the city, there remains a compelling argument for keeping them out.
“It has been proven that small, locally owned businesses create more economic development, because profits from these businesses are made here and spent here,” he said.