Shopko coming to Mayville | Mayville - Portland, North Dakota

Shopko coming to Mayville

MAYVILLE, N.D.—It appears that Shopko Hometown is coming to Mayville, probably by next spring, to fill a space left vacant when the city’s Alco Discount Store closed earlier this year.

Mayville-Portland ND bankers Ernie Strube, left, of the Goose River Bank and Tom Capouch of the First and Farmers Bank, believe a 5-year, 1-percent city sales tax exemption, passed recently by the Mayville city council to attract Shopko, a national discount retailer, to Mayville, to fill the now-empty Alco Discount Store building will also benefit existing businesses.. photo by Eric Hylden/Grand Forks Herald

The Mayville City Council is enticing Shopko with a sales tax rebate incentive similar to those made recently by other small North Dakota cities to attract the retailer, based in Green Bay, Wis.

Shopko stores opened in former Alco locations earlier this month in Lisbon and Carrington. Another one opened earlier this year in Oakes.

“I’m in favor of the deal,” Mayville Mayor Don Moen said. “What it is is a response to the citizens of the community. We just had an overwhelming response in the community.”

While some details of the deal remain to be worked out, Shopko officials signed an agreement last week to accept Mayville’s incentive offer, which provides the company a rebate of 1 percent of the city’s 2 percent city sales tax the business generates over the next five years, according to Tom Capouch, president of the First and Farmers Bank in Mayville and secretary-treasurer of the Mayville-Portland Economic Development Corp. The agreement caps the rebate at $150,000.

The building is owned by a California real estate investment trust.

The sales tax incentive has spurred lively debate in the community over the past few weeks, with some residents and businesspeople questioning whether it is fair to existing businesses.

“There’s going to be some concern,” Capouch said of the incentive. “Nobody’s come out and said we shouldn’t do this. They just want it to be fair.”

Helping existing business

A local committee of the economic development group met late last week to discuss potential programs to assist existing businesses in Mayville, which has a population of about 1,900. Nearby Portland has a population of 600.

When it closed, Mayville’s Alco store had about 20 employees, many of whom worked part time.

“Sometimes you have do some things that are outside of your comfort zone,” Capouch said. “We have to look at our existing businesses to figure out how we can make this work for them. How can we make businesses in our community complement each other?”

Alco announced last November it had filed for Chapter 11 bankruptcy. The company, which was founded in 1901, had 198 stores in 23 states, including 13 in North Dakota and 12 in Minnesota.

Alco’s closing in February left a void for Mayville-Portland.

The Traill County cities, located along N.D. Highway 200, are just a couple of miles apart, about 45 miles southwest of Grand Forks or about 60 miles northwest of Fargo.

“It was a good place for college students to work,” Capouch said of Alco. “They could work around their schedules. Both my boys worked there. It’s pretty darn handy, especially for college students and for older retired people who really don’t want to drive to Fargo or Grand Forks.”

While other retailers have stepped forward, some of them expanding their product lines in response to Alco’s closing, local leaders say such a store—offering clothing, some food products, home products and other general merchandise—is vital to the community.

Mayville-Portland’s retail business anchors include Miller’s Fresh Foods, May-Port Hardware Hank and Aasen Drug. The sister cities also have four banks—the First and Farmers Bank, Goose River Bank, Gate City Bank and First Community Credit Union.

The community also is home to Mayville State University and Sanford Mayville Medical Center.

Mayville’s city sales tax receipts totaled $88,035 in the first quarter of this year, a 5.4 percent increase over the first quarter in 2014. However, second quarter receipts dropped by 12.1 percent, to $73,355, according to City Auditor Gail Oistad.

While local officials do not attribute that loss in revenue directly to Alco’s closing, they say it was a contributing factor.

“I don’t think there’s anybody in the community who doesn’t want to see this space filled,” Ernie Strube, president of Goose River Bank and president of the local economic development group, said of the former Alco building, located along Highway 200 on the east side of Mayville. “There’s some perception that some local businesses don’t want it. I don’t think that’s the case at all. It’s a matter of how the incentives are going to be structured.”

Shopko expanding

Shopko has 14 stores in North Dakota, according to Shopko public relations manager Michelle Hansen.

Other Shopko stores that have opened this year in the state are in Bowman, New Town, Rolla and Tioga, she said. Another is slated to open later this year in Stanley.

While some of the Shopko stores are located in former Alco locations, Hansen could not confirm whether that is the case for all of them.

Nationwide, the company has opened 54 stores this year.

“We are definitely eager to continue our growth path for Shopko Hometown stores,” Hansen said, adding that the company plans to open another 100 stores across the country next year. The company has stores in 24 states.

Lisbon’s Shopko, like the one in Carrington, opened the first week in October. Both of them are in former Alco stores. Lisbon is about 40 miles from Oakes, where Shopko opened in the spring.

Mayville’s sales tax incentive essentially mirrors one used in Lisbon.

“It was a call to action,” said Nick Storhaug, a Lisbon banker and part of an investment group that owns the building. “What we’ve done is that part of the sales tax that is collected goes back to the retailer. It helps them pay the light bill or keeps them going.”

Regional centers

Lisbon’s Shopko has about 35 employees, according to Storhaug.

“Thirty-five employees is a shot in the arm,” he said. “As a community, what we really rely on is the traffic. Most of our traffic doesn’t come from town. It comes from towns south and west of here. People just don’t come to town to shop at Shopko. While they’re here they buy gas. They shop retail uptown.”

Oakes competes for that business, too.

“The impact of bringing Shopko to Oakes and keeping it a primary retail area is huge,” said Leigh Harris, manager of the Oakes Chamber of Commerce. “We feel very fortunate that Shopko came in. They certainly add an important element to our business community and help to make Oakes a regional shopping center.”

Mayville-Portland leaders are working toward a similar goal.

“Alco brought a lot of people from communities around us,” Moen said. “And when they were here, they’d stop in the grocery store. They’d stop in the cafe. They’d stop in the hardware store. I would expect Shopko would generate the same kind of business.”

As reported by the Grand Forks Herald, October 14, 2015
http://www.grandforksherald.com/news/business/3860273-shopko-coming-mayville

701-788-2166
Mayville City Auditor

701-788-2463
Portland City Auditor