There’s been a lot of talk about hyperlocal–the concept of catering to very small, specific locations–over the last couple of years in news and advertising. Well, here’s one more take on the subject.

Welcome to the world of hyperlocal taxes.

The concept of granting local authorities to levy hyper-local taxes for specific purposes isn’t new, though it’s not something that hasn’t yet affected most consumers directly.

Here’s a story from my neck of the woods:

A few years ago the the city of Hampton created a group called the Community Development Authority (CDA) about three years ago. Their job is basically to issue bonds to finance the infrastructure of a new retail development called Peninsula Town Center. The CDA is also authorized to tax the businesses and consumers who shop there to help offset the costs of repaying these bonds.

The problem was that a primary source of tax income for the city–a local shopping mall–had closed its doors. The land was sitting unused and the city was losing tax revenue by having unused land sitting idle, but the city couldn’t afford to help redevelop the land.

Developers didn’t want to absorb the cost of the public infrastructure (roads, sidewalks, etc). The two parties left in the equation of the retail center were the retailers themselves and the consumers who purchased goods from them. Thus, the CDA was formed to help fund the infrastructure and oversee these hyper-local taxes that would help pay for it.

It seems like a nice cooperation between public and private sectors on project that will help everyone out. The problem is that it effectively makes the cost of goods higher for consumers in a fairly competitive market. The primary anchor store in the development thus far is Target. There is another Target store just a few miles away in the neighboring city of Newport News with the same items and the same prices–just without the 0.5% VAFAC tax on the receipt.

In a recent article in The Daily Press, several locals basically said that if they had the opportunity, they would shop elsewhere due to the additional tax.

I suppose that time will tell us if the CDA model is a success, but I can’t help but think that the consumers’ reactions were not taken into account when the CDA was given authority to create these special taxes. It seems that in order for this project to succeed, there would have to be added benefits to shopping at the Peninsula Town Center in order to justify the additional taxes in the minds of consumers.

To make hyperlocal really work, you have to think about both sides of the equations. To get something from consumers, you have to give them something back. Maybe this would be a great place to try some hyperlocal marketing to better cater to consumers.

What do you think about hyperlocal? What else do you think Peninsula Town Center can do to differentiate itself?

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