NCPA - National Center for Policy Analysis

Hang Out At The Tax-Subsidized Mall

April 20, 1998

Those fancy downtown shopping malls that are springing up in cities across the country are being subsidized by taxpayers. The Department of Housing and Urban Development has poured hundreds of millions of dollars into them since that agency was founded in 1965 -- the rationale being that urban stores are needed to sustain downtown areas.

The chief private-sector beneficiary at present is the retail chain of Nordstrom stores. A Nordstrom spokesman blames the subsidies on the firm's competition, which he says "would be the first in line" for government handouts if they could.

Such federal grants totaled $350 million in 1995 and are expected to grow in the future.

  • A $453 million retail center in Kansas City, Mo., relied on public subsidies of $176 million.
  • Developers of a $300 million mall in Norfolk, Va., benefited from public contributions of $97 million.
  • Some $80 million in corporate welfare was poured into the building of the $260 million Northeast Mall in Hurst, Texas, near Fort Worth.

Malls in St. Louis, Mo., Coral Gables, Fla., Providence, R.I., and Scottsdale, Ariz., also recently benefited from such cozy "public-private partnership" deals.

Source: Tim W. Ferguson and Josephine Lee, "Corporate Welfare," Forbes, April 20, 1998.


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