Carson City officials estimated Wednesday that the city may lose as much as $500,000 a year in tax revenue after Super Kmart Center closes, if all its business goes elsewhere.
Kmart Corp. announced the store closure Tuesday and expects to liquidate the merchandise and vacate the building in the next 60 to 90 days.
If all sales dollars Kmart normally earns leave the Carson area, the city will lose a substantial amount of tax revenue to pay for services, as much as $500,000, said City Manager John Berkich.
"It's a loss of a good shopping venue," Berkich said. "We're hopeful other retailers in town will pick up some or all of (Kmart's business)."
In the midst of putting together a budget for the 2003-2004 fiscal year, city finance officers are looking for ways to make up for the estimated $1 million loss resulting from Wal-Mart's move to Douglas County in August. Officials had earlier figured the loss would be closer to $800,000.
"It just makes our challenge even bigger," Berkich said.
The loss comes at a time when other big-box stores are empty in town, including the Wal-Mart building and Supply One in south Carson.
Many of the smaller stores in the strip mall anchored by Kmart also have failed to attract retail tenants.
Carson was down $7.05 million in taxable sales in October, recording a 9.3 percent loss that month, according to the most recent figures.
October was the third straight month the city lost substantial sales income in general merchandise sales. Officials believe the loss is a result of Wal-Mart's move.
Carson officials will get their first look at exactly how much the retail losses will affect city services in late March when they receive the preliminary budget numbers, Berkich said. More than 40 percent of the city's operating budget comes from sales tax revenue.