On Tuesday, Kmart, where many shoppers take advantage of low prices and blue light specials, filed for bankruptcy.

Wednesday, January 23, 2002

On Tuesday, Kmart, where many shoppers take advantage of low prices and blue light specials, filed for bankruptcy. However, there are no indications the Austin Kmart has plans to close anytime soon.

According to Associated Press reports, the retailer has struggled in the competitive discount market for some time. With this latest announcement, what affect could this have on Austin’s Kmart?

Director of Administrative Services Tom Dankert said that in 2001, the Austin Kmart paid just under $112,000 in property taxes; the total tax amount paid in the city is $2.3 million, according to Dankert.

&uot;Most of the tax base is in a TIF (tax increment financing) district, which was in place before Kmart came in,&uot; he said. &uot;If they weren’t paying any (taxes), it wouldn’t affect homeowner taxes.&uot;

The TIF district was established to entice business development in the area; most of the taxes paid within the district go directly to the city, Dankert explained.

Anything above $950,000, the city uses to pay off debts; this way, developments are able to enter the area.

The loss of that revenue, Dankert explained, would greatly affect the ability of the TIF district to repay debt.

If Kmart were to close its doors, the district would lose $112,000, meaning the city would have to come up with those funds, or, in the worse case scenario, find an alternate source of revenue.

Austin resident Florence Hogan said she would be disappointed if the store were to close.

&uot;I shop here quite a bit,&uot; Hogan said. &uot;I get good prices on a lot of things.&uot; She went on to say that she thinks Kmart does just as well as other stores in the area.

&uot;I like to come here, even if I just come to look around,&uot; she said.

A recording at the company’s Troy, Mich. headquarters directed all inquiries to Kmart’s Web site, and only said Kmart stores will stay open.

&uot;The company currently doesn’t have any individual information about store information and until further announcements are made, as stores are open for business as usual,&uot; the recording said.

The site said that all of Kmart’s 2,114 stores were open for business, and that all store credits and gift certificates would still be honored.

The site also said that Kmart employees would be paid on a normal schedule and that employees’ pension and savings plans will not be affected. The company also said that &uot;vendors, suppliers and other business partners will be paid under normal terms for goods and services provided during the reorganization.&uot;