by Tischler & Associates, July 2002

Sprawling shopping centers cost taxpayers in Barnstable, Massachusetts, more than they produce in revenue, according to this analysis. The study compares the tax revenue generated by different kinds of residential and commercial development with the actual cost of providing public services for each land use. The study found that big-box retail generates a net annual deficit of $468 per 1,000 square feet.

Shopping centers likewise produce an annual drain of $314 per 1,000 square feet. In contrast, the study found that “specialty retail,” a category that includes small-scale neighborhood and downtown businesses, has a positive impact on public revenue (i.e., it generates more tax revenue than it costs to service). Specialty retail produces a net annual return of $326 per 1,000 square feet.

The two main factors behind the higher costs for big box stores, shopping centers, and fast-food outlets, compared to traditional neighborhood and downtown retail stores, are higher road maintenance costs (due to a much greater number of car trips per 1,000 square feet) and greater demand for public safety services.

Read the study.