Gloucester Premium Outlets® – Perils & Potential Part II: Potential

The last Kola Files entry examined what I considered some of the perils of the Gloucester Premium Outlets® planned for Gloucester Township. This week, let’s examine what I think are the potential advantages of the Premium Outlets® opening in the Township.

RATABLES

One of the main purposes of bringing businesses into a community is to increase the commercial ratable base, thereby alleviating some of the tax burden on residential property owners. Since the proposed Gloucester Premium Outlets® has been called the largest economic development project in the history of the Gloucester Township, I thought it only reasonable to ask what the estimated Township taxes on the project would be once it was open and operational. 

I asked that question during a Gloucester Township Council Meeting earlier this summer. Council Vice President Orlando Mercado told me that he would check with the municipal Tax Assessor and get back to me with a ballpark estimate.

On Monday, September 10, 2013, before the regularly scheduled Township Council meeting, Mr. Mercado graciously provided me with the estimated figures.

Based on the plans, as submitted by Simon Management Associates II, LLC, the developers of the Premium Outlets®, and approved by the Gloucester Township Council, Mr. Mercado said that the Tax Assessor estimated the assessment on the land to be $3.8 million. The estimated assessment on the buildings would be between $40 million and $45 million.

Using these estimated assessments, the Gloucester Township municipal tax on the Gloucester Premium Outlets® would be approximately $1.45 million per year.

Let me reiterate that these numbers are only estimates.

Remember, this is just the estimate for the Gloucester Township municipal tax. There would, of course, be Camden County taxes collected. And if no payment in lieu of taxes agreement (PILOT) is granted, there would also be school taxes collected

 JOBS

Page 24 of the Gloucester Township Land Development Application that Simon submitted for the Gloucester Township Premium Outlets® states:

"Initially, the overall project will generate approximately 200–250 full time construction jobs. Once completed, approximately 800 new, full- and part-time job positions will be created to serve the many shoppers who will visit the Center each year."

It is important to remember that the full-time construction jobs will be temporary. Specialized workers will be needed to clear the land, build the project’s infrastructure and construct the buildings, and finish the interiors, but very few of those 200 to 250 workers will be employed from the scheduled fall 2013 commencement of the building phase to the estimated fall 2014 opening. However, that is the nature of the construction business, and both construction companies and construction workers realize this. These workers spend time working on a job and then when their part is done, with luck, they move on to another project for another limited amount of time. The Gloucester Premium Outlets® will be that next project for a number of construction workers.

The approximately 800 new full- and part-time positions will be retail positions. While a small percentage of these workers will be managers employed by the developers to run the Gloucester Premium Outlets® or managers employed by the individual stores, most of the positions will probably be classified as entry-level “associate” positions and will pay minimum wage or slightly more. Of these “associate” positions, some will be considered full-time (usually at least 32 hours per week), while the majority will probably be part-time.

Unlike the municipal taxes on a project of this size, these anticipated jobs do not provide a major benefit to Gloucester Township for two main reasons.

First, it is impossible to guarantee that a certain percentage of people hired by the stores in the Outlets will be residents of Gloucester Township. That would be illegal. In all likelihood, employees of the Outlets and its stores will come from not only Gloucester Township but also Washington Township, Williamstown, Deptford, Runnemede, Stratford, Winslow, and other towns within commuting distance. No one can say with certainty how many people employed at the Gloucester Premium Outlets® at any given time will actually live in Gloucester Township.

Second, Gloucester Township does not collect a municipal wage tax from people working in the Township, so these employees are not adding a dime to the taxes collected. In addition, because most of those employed at the Outlets are not likely to earn enough money to purchase a house in the Township, the Outlets are not likely to lead to an increase in residential property taxes.

So, how can I still say that jobs are one of the benefits of the Gloucester Premium Outlets®? Simple. They’re jobs! Minimum wage jobs, even part-time jobs, are important for the federal government, the state, and the employee.

The federal and state governments collect taxes. That, though indirect and minuscule, benefits the residents of Gloucester Township by increasing the overall tax base at both the federal and state levels.

Minimum wage, part-time jobs help employees too. This type of job may be a stepping-stone to a better position. An employee may advance through the company ranks to work full-time hours and then advance to an assistant manager’s position, and possibly to manager. The employee also could move to a better job outside of the company. The old axiom, “It is easier to get a job when you already have a job,” is true.

Also, it is important to remember that many part-time jobs are filled by people who want part-time jobs. Joel L. Naroff, president and chief economist of Naroff Economics Advisors, Inc., wrote in the article “Shift to ‘part-time workforce’ not really happening” (Philadelphia Inquirer, September 1, 2013) about one type of person: the boomer “retiree.”

Others who may specifically want part-time jobs include:

• High school or college students who want to pay for their education or earn spending money

• Stay-at-home moms who need to supplement their family income and want to get out of the house for a few hours a week

• People who are already employed full-time but need a second, part-time job to help pay bills or increase their standard of living

While the jobs created by the Gloucester Premium Outlets® will not directly or substantially benefit Gloucester Township, they will help benefit the economy as a whole. Most importantly, they will benefit those who seek and attain part-time jobs.

 BLACKWOOD WEST

Blackwood West, or what is more commonly referred to as “downtown Blackwood” or the “Blackwood business district,” is the stretch of the Black Horse Pike (Route 168) that has officially (in the Gloucester Township 2004 Blackwood West Redevelopment Plan) been designated to begin in the north at the Almonesson Avenue/Erial-Blenheim Road intersection down to a little past Lake Avenue in the south. Its east and west borders vary considerably along that corridor.

In my opinion, the Gloucester Premium Outlets® could have a positive impact on the economic viability of businesses located along the Black Horse Pike in Blackwood West. In my last posting I stated that I could see traffic increasing both southbound and northbound along the Pike because some Outlet shoppers would use this road as an alternate route to and from the shopping center.

This additional traffic would expose people to Blackwood West who may not have been through the area before. Additional traffic potentially means new customers for current and future businesses along the Black Horse Pike.

I admit that a revitalization of Blackwood West in its current form and state, even with the spillover traffic from Gloucester Premium Outlets®, is unlikely. Luckily, though, the Township already has a vision for the area in the aforementioned Blackwood West Redevelopment Plan. However, that plan was adopted in 2004 and needs to be revisited to take full advantage of the potential that the Premium Outlets® presents.

Next time:

Nine Years Down the Road: Tweaking the Blackwood West Redevelopment Plan