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The price of retail development

How about a little PIF with your Starbucks coffee at Target?

Look closely at your Target receipt and you’ll notice your sales tax is just a wee bit higher than, well, everywhere else in Glenwood Springs.

On general merchandise, you’ll pay approximately 9.5 percent sales tax at Target, including a 1.5 percent Glenwood Meadows “public improvement fee,” or PIF.



The fee, levied by Glenwood Meadows Metropolitan Districts 1 and 3, isn’t a tax per se, but a permanent fee Meadows stores charge shoppers to pay for roadways, traffic control, sewage systems, drainage and landscaping, said Meg Roettele, Glenwood Springs sales tax coordinator.

The 1.5 percent fee is taxable, meaning that the fee is added onto the cost of an item before sales tax is calculated. In other words, a $19.99 item at Target really costs $20.29. Add the 7.95 percent sales tax and your total is $21.90. Your Target receipt will say a 9.57 percent sales tax has been charged, adding up to $1.91. At Kmart across the freeway, where the PIF doesn’t apply, you’ll pay just $21.58 for the same item.



The fee applies to all the stores at Meadows, and all the money the metro districts collect from the fee is applied to public infrastructure improvements at the mall.

“The PIF is utilized for debt service payments,” said Glenwood Springs city attorney Karl Hanlon.

The Glenwood Springs City Council created three tax districts surrounding the Meadows project in Aug. 2003. They were to have a total borrowing capacity of $24 million to pay back $19 million in infrastructure costs.

Voters within the districts ” amounting to only a few developers ” approved their creation in the Nov. 2003 election.

Though the metro districts collect the PIF, each retailer opening at the Meadows knows ahead of time they have to pay back the cost of improvements, he said. Those stores pass the fee along to customers.

PIFs have become common in Colorado in recent years, particularly in the Denver metro area, where shopping malls like Colorado Mills in Lakewood tack a PIF onto every sale, Hanlon said. To prevent sticker shock at the cash register, the city requires Meadows stores to post a placard at each register explaining the fee, he said.

The fee came as a surprise to Target store manager Jene Yoder. “I found out about it the day I bought my first thing to test something at the store,” he said, adding that it took a lot of software changes to program the fee into Target’s computer system.

Yoder said Target Corp. is sending the store signs explaining the fee for every cash register and the signs should be up soon.

Some customers at Target, which unofficially opened on Tuesday night, were more than happy to pay extra to shop at the Meadows Thursday.

Cailen Hollenback, of Carbondale, said she was unaware of the fee, but didn’t mind paying it if the Meadows will improve shopping in Glenwood. She suggested Target advertise the fee in a local newspaper.

“I don’t have a problem with it,” Greg Alex said of the fee. “I live up in Eagle and our sales tax is probably the same or even higher. It’s just a bonus to have the facilities here because we’d have to drive to Junction or Denver, which I don’t like to drive to either.”

Alex was also unaware of the fee and suggested Target put up signs informing customers of the extra charge.

But Glenwood resident Annie Jolley, who also hadn’t heard of the fee before she paid for her purchases, wasn’t happy about it.

“Glenwood should have made the developer pay that instead of the consumer,” she said, adding that she thought customers aren’t adequately informed of the fee. She also suggested Target advertise the fee.


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