Texans have been big on Buc-ee’s for decades now. But in recent years, as the company has expanded, other parts of the U.S. have experienced everything the super-sized gas stations have to offer as well.
The brand is so popular that local governments across the country are offering tax breaks and other incentives to lure Buc-ee’s to town. Mike Sasso, real economy reporter for Bloomberg, spoke to the Texas Standard about the trend.
This transcript has been edited for clarity:
Texas Standard: What sort of incentives are local governments offering Buc-ee’s to get them to build?
Mike Sasso: Well, the number one is probably infrastructure assistance. These things are giant. They create a tremendous amount of traffic, often too much traffic for the communities to handle. And so what you’ll often see is money given to Buc-ee’s to help them build bridges, flyovers, just road infrastructure. So that’s the number one.
I have seen free land given to them, as well as just, you know, reductions of sale tax, reductions of property taxes. Just kind of the gamut of incentives.
Texas Standard: Where does Buc-ee’s typically open shop? What traits do they look for?
Sasso: You’ll find them primarily on the – I wouldn’t even call it the suburbs or exurbs – I’d say, really an hour, an hour and a half outside of major cities.
Interestingly, what they tend to like to do is be about an hour or so outside of a major starting point like Atlanta, because they know that they know that people like to get on the road; they don’t want to immediately make a pit stop. But after an hour and a half, nature comes calling and they may need to make a pit stop. They may need some snacks.
And so there’s a Buc-ee’s with giant billboard directing you. And that’s kind of their strategy.
Texas Standard: Do you know, are these incentives making a difference to lure a Buc-ee’s to town?
Sasso: Yeah, it’s hard to know exactly if Buc-ee’s would locate there otherwise. And that’s always the question with incentives.
But certainly they have helped communities in places – like I visited West Memphis, Arkansas. They didn’t have a lot of jobs, or didn’t have a lot of high-paying jobs. And the community is hoping that that a Buc-ee’s will kind of help set a new floor for wages.
And they lured them with a mix of free land, sales tax and property tax incentives. And so one would think that the incentives are playing a role in where Buc-ee’s is locating.
Texas Standard: You talked a little bit about that, but why are so many local leaders so keen to land a Buc-ee’s?
Sasso: Well, these things, they create around 200 to up to 225 jobs, and their jobs are fairly high paying. You know, sometimes it’s even higher wages than more traditional manufacturing and whatnot. You might have jobs that pay $20, $21 at Buc-ee’s and you might have 200 jobs at a Buc-ee’s.
In Mississippi in the Biloxi area, one of the economic development chiefs there was telling me they landed a new chemical plant, which sounds very prestigious and traditional manufacturing. But the chemical plant that’s a $500 million investment only brings 80 jobs.
So, you know, 80 jobs for a $500 million investment versus 200 jobs for a $50 to $60 million investment like you’d get at Buc-ee’s. So that kind of explains why they’re they’re interested.
Texas Standard: Is the return on investment for a retailer like Buc-ee’s generally different than a tax break for a manufacturer?
Sasso: Yeah, it is. You know, there’s a couple of ways to look at that. One, retailers generally are not going to command the kind of incentives; we’ve see in some really startling incentives for some manufacturers.
Here in Georgia, the Savannah area has a new Hyundai EV plant that’s going up. And it’s gotten about $1.8 billion in incentives. And even that’s kind of peanuts compared to what Intel is getting around the country. But certainly the return on investment is different.
You know, whereas in Hyundai in Savannah, Georgia, they’re expecting not only Hyundai plant to create around 8,000 jobs, but they’re expecting about a similar number of jobs from parts companies that are locating in and around Savannah. You’re not going to get that with a Buc-ee’s; you’ll get your 200 to 225 jobs, but you won’t get that spill off or spillover effect.
And Buc-ee’s is not going to use the same level of utilities; they’re not going to use the same amount in raw materials. I mean, Buc-ee’s, I believe they import most of the merchandise. So you’re not going to be sourcing that from the local community. So they get less, but yes, they do provide less to the local community.