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Kingman Council approves sales-tax rebate for Hobby Lobby after officials cite jobs and retail leakage
Summary
The City of Kingman authorized a site-specific economic development agreement with Hobby Lobby that provides a rebate equal to 30% of the city's 2.5% general-fund sales tax on Hobby Lobby sales, capped at $250,000 over up to 10 years; the deal includes job commitments and drew public opposition.
The Kingman City Council on Dec. 2 approved a site-specific economic development agreement that will rebate up to 30% of the city's 2.5% general-fund sales tax generated by a future Hobby Lobby store, with a maximum rebate of $250,000 over up to 10 years.
City Manager Walsh told council the rebate excludes construction and lease taxes and that the first payment begins two years after the agreement's effective date. Walsh said Hobby Lobby guaranteed at least 12 full-time jobs averaging $40,000 per year and 11 part-time positions, and that the company must provide regular reporting so the city can verify employment and wage commitments.
The proposal drew a public objection from Donald J. Lynch, a local certified public accountant, who said the council was setting a poor precedent by giving incentives to a major corporation while local entrepreneurs struggle. "I do not understand why we would give such a break to a major corporation that we do not give to all the local people trying and struggling to start a business in this town," Lynch said.
Caleb Wilson, a retail consultant with Retail Coach working with the city, said his analysis estimated local retail "leakage" to surrounding Hobby Lobby stores at roughly 23–24%, which he translated into approximately $1 million to $2 million annually in potential local sales recapture. "We estimated that to be around that 23 to 24% mark," Wilson said, and argued the long-term sales and wage returns exceed the incentive payout.
Council members discussed the terms before moving and seconding the authorization; the motion carried on a voice vote. No formal roll-call tally by name was recorded in the meeting minutes.
The agreement allows the city to reimburse qualifying sales-tax revenue up to the stated cap over up to a decade and tasks staff with monitoring compliance on jobs and wages. City staff said the rebate is intended to bridge a financial feasibility gap to spur private investment and new retail options in Kingman.
A copy of the development agreement and staff backup materials are in the meeting packet; council will oversee compliance monitoring as the project moves to permitting and occupancy.
