By MICHELE HOLTKAMP-FRYE, Daily Journal of Johnson County staff writer
The luring is over.
The Greenwood City Council gave outdoor retail giant Cabela's an $18 million incentive to kick-start development on 100 acres at County Line and Graham roads.
Two city council members voted against the incentive, which lets the company use its property taxes to pay off the debt, and some residents criticized the offer as too sweet for a for-profit company.
Council members Bruce Armstrong and Ron Bates voted against the incentive. Armstrong has questioned why the store will be smaller than most other Cabela's stores and whether it will truly be a destination.
Bates wanted a promise that no store would be built within 100 miles. When that request failed, he asked for a 75-mile radius.
That failed, too.
With five council members approving the package, Cabela's is now expected to close on the purchase of 100 acres along County Line Road between Interstate 65 and Graham Road. The 125,000-square-foot store is scheduled to open in fall 2008, and 30,000-square-foot indoor water park Splash Universe and an attached 164-room resort will be built next to it.
Council member Keith Hardin and Mayor Charles Henderson want to make sure residents understand: The city isn't just giving Cabela's $18 million from the checking account.
Here's how it works: The city will borrow $18 million from Cabela's Inc. The debt will be paid back over a period of about 20 years using property tax money that the Cabela's retail store, the resort and water park and other restaurants or stores that come to the area will pay.
The area is already in a special tax district, called a tax-increment financing district, that captures property taxes from new development to pay for infrastructure such as sewers, road improvements or new fire stations.
In this case, taxes from Cabela's and other developments on the 100-acre property won't be used for that kind of work. The money will be used to pay back what Cabela's is borrowing from its parent company to begin site work and construction of the store.
After the debt is paid off, the special district will end, and Clark-Pleasant schools and other taxing units will get the property tax money that the businesses pay each year.
In return, Cabela's promises not to build another store within 50 miles and to come within 10 percent of hiring goals of 90 full-time and 130 part-time workers. The average annual payroll will be $5 million. The average per hour wage is about $15, but that figure includes the value of benefits.
The store, which is billed as an educational experience, museum and tourist attraction, is expected to draw 3 million people per year.
At its other stores, shoppers come from hundreds of miles away and spend three to four hours looking at the museum-quality wildlife displays and aquariums, the company said. The Greenwood store will include an indoor mountain, gun library and archery range.
Armstrong has been concerned about whether Cabela's will be a true destination.
Cabela's is in the midst of an aggressive retail expansion initiative, a real estate site acquisition manager for Cabela's has said. The stores attract groups on tour buses, schoolchildren on field trips and shoppers from other states.
Armstrong visited a Cabela's in St. Louis during a trip this month and counted the license plates on 150 vehicles parked in front of the store. Ninety-nine of the vehicles were from Missouri, and 41 were from Illinois.
"It's not showing to me that it's the tourist destination that they claim," Armstrong said.
Outdoor retailer Gander Mountain's development company hired a consultant to oppose the incentive, and he said the city shouldn't grant the economic package because the store won't be a destination, the company has fallen short of hiring requirements in other cities, public financing is increasing the company's return on investments, the property could become home to a major employer, and other cities are questioning or stalling granting Cabela's incentives.
On Monday, registered voters received postcards from the consultant, David Ewald, that tied rising property taxes to the Cabela's incentive.
"This is not your money," Greenwood Mayor Charles Henderson said.
City officials say the package for the store doesn't have anything to do with local property taxes and whether homeowners or businesses will pay more or less.
The city's portion of the property tax rate went up 2 cents, and that is not out of control, council member Ron Deer said.
Shoppers will pay a sales tax, and employees' earnings will be taxed, which could cause local property taxes to go down, city officials said.
But police officers and firefighters, who are paid with property tax dollars, will be used when a shopper has a vehicle accident, tries to shoplift an item or has a medical emergency.
And property taxes in the special tax district are withheld from the fast-growing Clark-Pleasant school district.
City officials say this project doesn't impact Clark-Pleasant because it's not adding students to the school system and, if the property were to remain undeveloped, Clark-Pleasant wouldn't get more revenue.
Cabela's believes the entire 100-acre farm field will be fully developed with more restaurants and shops within four years.
The value of the entire project is estimated at $102 million. Of that, Cabela's and the water park resort will be worth $60 million to $70 million.
A proposed master plan shows the Cabela's store will be built at the northwest corner of the property, closest to the interstate exit, with the water park and hotel sitting behind, or south, of the store.