Sales tax receipts not keeping pace with trends

Cape Girardeau's status as the retail hub of the region isn't in danger, but recent sales tax reports from the city and county governments show that the area isn't immune to the doldrums effecting the national economy.

For the first three months of 2008, receipts from the city's 1 percent general revenue sales tax fell 1.3 percent to $2.40 million, from $2.44 million in the same period of 2007. For the first eight months of the city's fiscal year, receipts are up about $10,000, or 0.1 percent.

The Cape Girardeau County revenue picture isn't much different. So far this year, sales tax receipts from the county's half-cent general revenue tax are up a mere 0.03 percent, or $571.37, over the same three months of 2007. The county has collected $1.67 million so far this year.

For both entities, the numbers should be a cause for concern. In each of the past four years, city sales tax revenue growth has fluctuated between 1.9 percent and 4.6 percent. For the county, the growth range is narrower, running from 3.1 percent to 4.7 percent.

At this time last year, the county had received 4.2 percent more than it did in the first three months of 2006.

Looking beyond raw numbers, the anemic growth is a sign that taxable retail sales are not keeping pace with inflation or rising incomes.

Both governments write budgets that anticipate growth in line with historic averages. Cape Girardeau is already taking steps to deal with a potential shortfall, Mayor Jay Knudtson said. "We as a city are a regional hub. Not only are we absolutely dependent on spending -- 68 percent of our budget being funded by sales tax -- but that revenue comes to us from surrounding communities."

A clearer picture of the retail sales climate should emerge in coming months, because the most recent figures could be a result of business closures during the February ice storms or an anomaly in the way reporting dates fall for retailers.

• New owners: A combination of managers and two investment firms have taken over at one of the biggest employer groups in our area, Rapco International and Major Custom Cable.

The new ownership arrangement took effect Feb. 28, company manager and partner Dale Williams said.

With about 350 to 400 employees in Jackson, Fruitland and Advance, Mo., as well as manufacturing facilities in Acuna, Mexico, Leominster, Mass., and Toronto, the companies are a little-noticed success story for our region.

Rapco is a big deal in the music business, claiming the top market share for its products, Williams said. "We are more than twice as big as our next competitors," he said. And Major Custom Cable is a top supplier of data cables as well, he added.

The new ownership arrangement, Williams said, was an initiative by the managers of the company to gain a bigger stake and to obtain additional capital that would enhance the company's offerings.

Grouped under the umbrella of RHC Holding Corp, the company was controlled by Cameron Holdings, a San Diego-based investment firm that also has offices in St. Louis.

There's a life cycle for every investment group that holds a company, Williams said. For Cameron Holdings, with an aging president, Rapco and Major Custom Cable were near the end of that life cycle. "Being at the back end of an investment group's participation means they want to pull money out rather than put money in it," he said.

So, rather than wait for a bidder to buy the company, the local management pooled their available cash, worked up a bid and went looking for partners, eventually enlisting Midwest Mezzanine Funds, a Chicago-based investment firm, and Bush-O'Donnell Capital Partners LLC, a St. Louis-based firm.

• New restaurant: The former location of Casa Mexicana at 1015 N. Kingshighway will be the new location of The Branding Iron BBQ, a restaurant with locations in Jackson and Farmington, Mo., owned by Jim McLeod, Jack Hunt, Keith Hutchison and Dale Wright.

The idea, McLeod said, is to bring the barbecue to Cape Girardeau customers who may have tasted the offerings but don't visit as often as he would like. While the Jackson restaurant at 1903 E. Jackson Blvd. has done a fine business since opening in 2003, he said he originally thought it would be a destination for Cape Girardeau residents with a hankering for a good plate of ribs or a pulled pork sandwich.

Instead, he said, he's found that most of his customers with Cape Girardeau residences visit the store when they are in Jackson on other business. The new location could be open as early as May 1.

"It is going to be a smaller place" than the Jackson restaurant, manager Jennifer Hauenschild told me.

It will feature a self-service counter for placing orders. "it will be more to get a lunch crowd, and we'll get a drive-thru window," Hauenschild said.

Casa Mexicana moved to 1832 N. Kingshighway.

• New construction: Speaking of Casa Mexicana, the restaurant will get some company on North Kingshighway soon. The city issued a building permit for construction to real estate developer Gary Hellwege for a 6,910-square-foot building with an estimated cost of $300,000 to go up at 1812 Carondolet in New North Pointe Center.

The Beef O'Brady's restaurant franchise, held by Robert M. MacGillivray of Sikeston, Mo., and Lee Hillman of Cape Girardeau, will be one tenant, taking 3,500 square feet, Hellwege said, and another restaurant that he declined to name will take another 1,500 square feet.

New North Pointe Center isn't just for restaurants, but that's what it is attracting so far, Hellwege noted. The construction allowed in the latest permit will be attached to another 5,000-square-foot structure and he's got drawings in the works for another 7,000- to 10,000-square-foot building nearby. The extended walking trail planned by the city will go along the back of the property, Hellwege noted.

"What is really nice about it is creating a village-type atmosphere," he said. While the construction has gone slower than he would like, Hellwege said he's lining up the tenants so occupancy keeps pace with construction.

• New health care: A new treatment center for psoriasis has opened at 2909 Independence St. Called Healing Rays, the treatment focuses narrow-beam UVB rays on a patch of affected skin on the sufferer for short bursts, said Marcia Schlueter, founder of the business.

Schlueter, who is also the owner of Endless Summer tanning salon, said she was inspired to check out the possibilities for Healing Rays because some customers came in for tanning specifically for the relief it gives their skin condition.

All the work is done under the auspices of Dr. Vishnu Subramani, Schlueter said, and not just anyone can obtain the treatments. Light treatments are a step beyond topical creams and other measures, she said. While there is no cure for psoriasis, the light treatments can aid in the relief and abatement of the disease, caused by an immune system problem, for up to six months, she said.

Treatments are usually covered by health insurance or Medicare, she said.

• New landlord: Lawyer Gordon Glaus is in the rental business. He's started a new real estate investment firm called GLG Realty LLC and has purchased three properties to start, two on South Sprigg Street and one on Elm Street. That will be it for a while, he said, unless a great deal comes along. "I am not looking to become the rental property baron of Cape County," he said. "We'll see how it works out."
• Anniversary celebration: In March 1958, C.R. Haertling opened Cape Realty, an independent real estate brokerage at 121 N. Pacific St. This year, ERA Cape Realty, under current owner David Glastetter, is looking back at the lineage that led through mergers with Vernon H. Landgraf Realtors and Ivan Irvin Realtors to form Realtors Unlimited Inc. in 1982 and the 1987 sale to Glastetter and subsequent affiliation with ERA, the national real estate franchise.

With that experience in mind, I asked Glastetter to look into the near and longer-term future of real estate in our area, and he said he's encouraged. While the current inventory of homes is larger than normal, interest rates are reasonable and he predicts that 2008 will be a good year.

The reason, he said, is that government stimulus checks this year could be a trigger for people to buy homes if they were needing that last chunk of cash to make a down payment. Also, as a result of the subprime mortgage crunch, the rules for securing an FHA or other government-guaranteed, fixed-rate loan are looser, he said.

While the original firm was an independent broker, Glastetter said the advantages of having a franchise with a company like ERA include better training for his agents, national exposure for properties, a seller security plan that includes a guaranteed price that the company will pay for the home if not sold in six months, and other support programs.

• From the news release file: Wilkes Group of Perryville, Mo., has acquired a new facility in the Perryville Industrial Park for its Wilkes Integrated Packaging and Wilkes Fulfillment Systems operations. Wilkes has provided direct marketing services since 1939, with a full range of services from sales strategy and materials design to mailing, printing, distribution and online marketing.

The company will take over a building previously owned by Solar Communications.

Maxim Healthcare Services has opened a new branch office in Cape Girardeau for its offerings of in-home health-care services. The company will offer a range of services from pediatrics, adult care, respite care, personal care and companion care. The offices will be at 3065 William St., Suite No. 101. The company is hiring registered nurses, licensed practical nurses and certified nurses aides.

Rudi Keller is the business editor for the Southeast Missourian. Contact him at rkeller@semissourian.com or call 335-6611, extension 126.