Jewelry store ordinance
By Rodney Dial
May 26, 2007
This letter is not meant to support or oppose the jewelry store
ordinance. It is simply food for thought. I am a property owner
in the Newtown area.
My concerns with the ever increasing number of jewelry stores
They provide no sales tax revenue during the months they are
closed and as a result other year around businesses / citizens
must shoulder a greater percentage of the tax burden.
Jewelry stores sell high end items, many of which exceed the
Single Unit Sale amount for the purposes of sales taxes. Most
other use retail stores in the downtown / Newtown area sell items
that do not reach this level. As a result, a percentage of the
total sales of jewelry stores do not generate any sales tax revenue.
The continued proliferation of jewelry stores in Ketchikan threatens
to "typecast" our community. Word of mouth referrals
due to visitor satisfaction from a positive visit are the best
marketing tool to attract future visitors. We don't want visitors
going home saying that there was nothing to see in Ketchikan
but a bunch of jewelry stores.
Some have suggested that we have an abundance of jewelry stores
because tourists are creating a demand. I believe that it is
important to remember that:
The average markup for a jewelry store is 200-300% or more.
This means that low volume sales can still equal high profits.
Cruise ship tourists who do not take shore-side excursions are
considered Captive buyers . They have X amount of time on their
hands, limited or no transportation, and spend most of their
time walking the streets shopping / sightseeing. Most have jewelry
stores in their communities and did not travel to Alaska with
the expressed interest of buying jewelry. Many who buy jewelry
do so primarily as an impulse purchase.
Most communities that depend on tourism have faced similar problems.
Carmel, California is a good example. This seaside town with
a population of 4058 people was considered a victim of their
own success. At last count they had 120 Art Galleries, or one
for every 34 residents. This aesthetic overkill drove up property
values, drove out the mom and pop stores, limited city sales
tax revenues, and typecast the community as a place to go to
buy art, nothing else.
A three bedroom home in Carmel now goes for approximately 2 million.
Needless to say a few property owners made out like bandits,
and everyone else who could not afford the rents / property taxes
/ home costs, etc, left long ago. If you Google
Carmel you will see that the City is now claiming that they are
To my knowledge there are no jewelry stores in the Newtown area.
If this is true, and the ordnance passes at least a few additional
jewelry stores would still be allowed. Also, an unlimited number
of new stores could be created that sell jewelry as long as they
keep jewelry to no more than 40% of their total merchandise.
I can understand the concerns of the property owners in the Newtown
area (I am one of them). On the one hand I am opposed to government
regulation, and changing the rules after the game has been played.
On the other I have no loyalty to those who live elsewhere,
come here for a few months to make their riches and would leave
in a second if the going got tough.
The only reason this reached the initiative stage is because
the Mayor and Assembly members lacked the intestinal fortitude
to make the hard decisions (the reason for most initiatives).
Dear Mr. Mayor and Assembly, if you want to clean up Newtown
then maybe you should consider giving people like Mr. Ferry a
tax incentive for their part in keeping the area from turning
to dirt. Personally, I will be paying off loans for the next
20 years for the work I am doing on my Newtown property, and
I have no doubt that the tax man will be there with a higher
bill the moment I finish.
Since the City government has no problem spending hundreds of
thousands of dollars on outside companies to tell you which way
tourists should walk, or how much employees should be paid, you
should not have a problem giving a tax break to locals trying
to make our town a better place. I won't hold my breath for
local government to do anything that may cost them a few dollars
in revenue - in the end locals simply do not rate as high as
the tourists to many of our elected officials.
Regarding the initiative, keep in mind that City Government can
cancel it if they adopt/pass regulations essentially similar
in nature. This would allow the City to address the concerns
of both groups. What do you think the chances are of that happening?
I wish the best for the true-local business / property owners.
Received May 25, 2007 - Published May 26, 2007
About: "Lifelong Alaskan
who loves Ketchikan"
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