Borders Books & Music has abandoned plans to build a superstore on the corner of Sixth and Lamar in downtown Austin, Texas. A community organization, Livable City, had joined local business owners in fighting the development, which was to be built across the street from two long-standing independent stores, BookPeople and Waterloo Records. The city had set aside $2.1 million in public subsidies for the project.
As we reported in the February issue of this Bulletin, Livable City commissioned a study from the firm Civic Economics that found that the independent stores were generating three times as much local economic activity for every dollar they took-in compared to a typical Borders. According to the study, the new store would siphon millions in sales from the two independents and negatively impact the Austin economy by shrinking the volume of economic activity occurring within the city. Livable City argued that providing subsidies for such an outcome was a colossal failure of public policy.
The issue became front-page news and galvanized a broad public discussion about the benefits of independents versus chains. “In many ways, it’s been a really positive thing,” noted Steve Bercu, owner of BookPeople and a founding member of the Austin Independent Business Alliance.
Although widely viewed as a major victory for chain store opponents, Borders attributed the decision to the sluggish economy.