Bass Pro to anchor $2B East Coast development

Two-billion dollars. That’s the estimated cost of a massive mixed-use development just off Garden State Parkway that Bass Pro Shops plans to front when it opens in 2015.

With 20 projects around the country already in the works, Springfield-based outdoor retailer Bass Pro Shops announced in June its plans to reel in New York City visitors with its 200,000-square-foot store slated for nearby Sayreville, N.J.

The Jersey-shore Outdoor World, which is scheduled to open next to a 1.2-million square-foot mall on the 453-acre Luxury Point development, sits on contaminated ground from a former paint-pigment processing facility currently being remediated about 30 miles southwest of Manhattan. The plans come amid a flurry of recent development activity that has garnered criticism, including taxpayer abuse and disappointing sales figures from one recent store opening.

King of Prussia, Pa.-based O’Neill Properties Group, which has a niche on the East Coast redeveloping brownfields, is behind the mixed-use retail and residential community Luxury Point. The development plans include two marinas, 750 hotel rooms, 1 million square feet of office space, 1,350 luxury apartments, 2,000 multifamily residences and 650 townhomes.

The mammoth project is designed to fill a development gap between Philadelphia and New York City, according to ONeillProperties.com. Company research indicates some 400,000 households with incomes exceeding $100,000 are within a 30-minute drive of the site.

Brian O’Neill Jr., a senior project manager and son of the company’s owner, said Bass Pro fits the development like a glove, despite the fact that the brand is a hood sponsor of a NASCAR champion and might not typically be associated with luxury.

“What suited Bass Pro uniquely is that Garden State Parkway is the main access artery to the Jersey shore,” O’Neill said, adding many of the coastline’s 40 million annual visitors enjoy fishing and boating. “We are the gateway to the Jersey shore.

“From the standpoint of a luxury center, fishing isn’t a cheap sport. People who go to the Jersey shore spend significant amounts of money on their boating equipment, fishing equipment. There’s a lot of hunters in the area that go to the mountains of northwest New Jersey as well as Pennsylvania,” O’Neill said.  

He described Bass Pro as the first major anchor tenant to commit to the project. The company signed its letter of intent two years ago, and O’Neill acknowledged the development has been in the works for years but still has no other major tenants to name. O’Neill declined to disclose neither the cost to construct the Bass Pro facility nor the financial incentives involved in the Luxury Point project.

“Retailers like to be around other retailers. The fact that we signed this lease with Bass Pro and announced it certainly raised the profile of the site, but we are still in active negotiations with other major retail anchors that are very interested in the site for similar reasons,” O’Neill said, noting O’Neill Properties would fund construction of the store for Bass Pro to lease.

Bass Pro Shops spokeswoman Katie Mitchell did not respond to requests for additional comment by press time.

While O’Neill said he didn’t know if Bass Pro was attracted to the project because of the remediation plan, he noted the development also includes a large conservation component including gifting 70 acres of remediated land to the public.

“When we’re done, we’ll be recycling more than 400 acres of land that was previously blighted and contaminated and putting it back to good use,” O’Neill said of the remediation supported by a $20 million state grant.

The Luxury Point project is among 21 Bass Pro stores planned at larger developments in the U.S. and Canada. Of the stores planned, a 120,000-square foot store in Little Rock, Ark., is the closest to the company’s Springfield headquarters. That store is expected to open Nov. 1.

Bass Pro and billionaire founder Johnny Morris have a history of working with developers who secure tax credits and incentives for projects anchored by the trademark yellow and red bass fish logo on the promise of increasing sales tax revenues.

The private company’s approach, however, has drawn the ire of taxpayer watchdogs. In a 2010 report, the Public Accountability Initiative, a Buffalo, N.Y.-based research group opposed to the use of public incentives for private development, estimated Bass Pro-anchored retail projects had secured more than $500 million in taxpayer subsidies.

During the last 15 years, Bass Pro and its closest competitor, Sidney, Neb.-based Cabela’s, secured more than $2.2 billion in taxpayer incentives, according to an August 2012 report from the Franklin Center for Government & Public Integrity, a taxpayer watchdog group based in Alexandria, Va. In June, the closely guarded Morris appeared on the Bloomberg Billionaire Index with a reported net worth of $2.8 billion. The same report pegged Bass Pro’s annual sales at $2.6 billion.

Under the Luxury Point plan, tax revenues would repay a $20 million grant from the state’s Hazardous Discharge Site Remediation Fund. According to media reports in Newark, the agreement between the developer and New Jersey’s Department of Environmental Protection allows O’Neill Properties to recoup $15 million of its investment, but not until the state has been repaid.

Also, construction of Bass Pro in Utica, N.Y., has caught criticism by the Northeast Regional Council of Carpenters. Union members picketed outside the Riverside Center last month claiming concerns about wages paid by developer Ronald Wright Inc. Union officials say the local pay standard of $40 per hour is not being met, according to published reports in Utica.

In Harlingen, Texas, lease payments tied to a Bass Pro Shops that opened there in November 2011 have been downgraded based on overly ambitious sales projections.

Harlingen Economic Development Corp. CEO Raudel Garza said the city-subsidized economic development group spent roughly $36 million to build the 150,000-square-foot Bass Pro store and related infrastructure. The construction, which was funded by the sale of revenue bonds, is being paid back by a combination of sales tax revenue generated by the store and lease payments from Bass Pro. After paying rent of $750,000 in fiscal 2012, lease payments were downgraded to $650,000 based on missed sales projections. Garza declined to disclose store sales figures for the private company.

“The projections were ones that we made internally. They were not Bass Pro’s projections; Bass Pro never really provided projections,” Garza said. “When we were doing the budget process last year, we didn’t have a whole lot in terms of data. Based on the data we have, the projections were high because the first few months were above and beyond what is normal for Bass Pro.”

In the Rio Grande valley town of 70,000, Garza said Bass Pro’s presence has spurred nearby development, including Sam’s Wholesale Club, Burlington Coat Factory, LongHorn Steakhouse and Chuck E. Cheese’s. Still, feedback on the use of public money to forward the development has been split.

“Some people would have rather not seen tax money used,” Garza said.

Despite sales projections missing their mark in Harlingen, O’Neill said he is still banking on Bass Pro as a draw for Luxury Point.

“I am not familiar with the site in Texas at all. What I can tell you is that we believe Bass Pro will be successful in Sayreville,” O’Neill said.  

Construction on Bass Pro’s New Jersey store could begin as early as fall. Bass Pro currently operates 58 stores in the U.S. and Canada.[[In-content Ad]]