Branson Landing has left its mark not only on the physical landscape of the downtown Branson area, but also on the financial backbone of the city, according to a recent study commissioned by the developer of the $420 million retail, lodging and entertainment destination.
The study privately funded by HCW Development Co. LLC pegs Branson Landing’s economic impact at nearly $3.3 billion between 2006 and 2012. But a big question in public-private developments is determining the net effect on the city.
“From a business standpoint, we knew it is a success,” said Bob Allen, vice president of operations for HCW Development. “We could see what it generates and how the bottom line looks, but we wanted to see what the real economic impact was on the city of Branson.”
Among the statistical analyses, Chicago-based consultancy Hunden Strategic Partners found expenditures at the outdoor lifestyle center generated $50 million in city tax revenue directly from Branson Landing visitors, $1.1 billion in net new employment earnings, nearly $100 million in taxes collected from ongoing operations and 7,000 jobs supported.
Calculated riskAllen credits the foresight of progressive city leaders at the time, who took a chance on the development.
“The theater business had gotten oversaturated,” Allen said, noting in the early planning meetings he attended, there was wide sentiment the city had to draw new and younger visitors. “The foresight of the city’s administration and the risk tolerance that HCW brought to the table was very telling.”
The 87-page Hunden report agreed.
“Based on our analysis, the Branson Landing project mitigated the decline of the traditional Branson product – live shows – which had become overbuilt and too similar in their offerings. More of the same product only created more fierce competition for a waning market, which led to a race to the bottom in pricing, which then made the industry less viable for all participants,” the report reads. “The Branson Landing project offered a new set of activities and attractions that not only brought more people to Branson, it complemented the existing tourism product.”
According to the report, the downtown district is the primary reason 13 percent of visitors come to Branson, and it is patronized by 60 percent of all visitors to Branson.
Garrett Anderson, the city’s economic development director, said he believes the city’s investment in the massive downtown project – pegged by Hunden at roughly $170 million – has paid dividends.
“We’ve been a partner from the beginning, so we are pretty familiar with the tax implications and the job creation,” he said. “It was designed to be a major anchor on the east side of town and downtown, and we think it has been exactly that.”
The study also found Branson Landing is responsible for 11 percent of all city taxable retail sales, 17 percent of restaurant taxes and 12 percent of lodging taxes. Meanwhile, restaurant tax dollars citywide increased 25 percent after Branson Landing opened, the report indicated, and the city’s 1 percent sales tax receipts are up 13 percent 2006–12.
The project was funded about 40 percent by public bonds, largely tax-exempt industrial revenue bonds through the Missouri Development Finance Board. Hunden’s report said $50 million had been generated on-site to repay bonds, and the public-private project has kept pace with its $11.8 million annual debt service. Currently, the city owes $125 million in principal and $72 million in interest.
Countering implications in the report, Anderson noted Branson Landing wasn’t built in a vacuum. Around the time it opened, voters passed the Branson/Lakes Area Tourism Community Enhancement District sales tax – a 1-cent tax to fund marketing efforts. In addition, such attractions as The Titanic Museum and Dick Clark’s American Bandstand Theater were coming on line to draw visitors. “It was a community effort with a lot of different attractions opening at that time,” Anderson said.
Visits to the city peaked at 8.4 million in 2007 before tumbling to a seven-year low of 7.3 million tourists in 2012, the report said.
Recession buffer?Citing steadily falling theater tax revenue, Branson Landing was a shot in the arm as the city entered the recession, the Hunden study said. Theater and live entertainment taxable sales peaked in 1999 at more than $105 million before falling to roughly $85 million in 2006. Sales bounced back to nearly $97 million in 2009 before falling again to roughly $80 million in 2012 – the lowest point in recent history.
In the retail category alone, Branson Landing isn’t the city’s top dog.
Annual retail sales at The Shoppes at Branson Hills and Tanger Outlets each outperformed Branson Landing in 2012. Anchored by Belk on the north end and Bass Pro Shops to the south, sales at Branson Landing have hovered between $110 million and $120 million since 2008. According to the report, the mall finished 2012 with $112.5 million in sales recorded, behind market leader The Shoppes at Branson Hills, $166 million, anchored by Kohl’s and Best Buy, and Country Music Boulevard’s Tanger Outlets, $125 million.
A distinction at Branson Landing is its mixed use with Hilton hotel rooms and restaurants sprinkled along the 1-mile path that traces Lake Taneycomo.
“Branson Landing is more than retail. It has several restaurants and other venues to go along with their retail establishments,” Tanger Outlets General Manager Jamie Whiteis said in an email. “Both venues are good for the local economy.”
He said Tanger’s visitor estimates of 4 million people last year rivals Branson Landing’s popularity, and the 74 outlet stores sustain some 900 jobs.
A year after Branson Landing opened, Tanger Family Outlets Inc. (NYSE: SKT) countered with a 25,000-square-foot addition that brought Nike Factory Store to join the center’s Polo Ralph Lauren and Old Navy brands. He said the public company is keenly aware of market competition.
“Since going public on the New York Stock Exchange 20 years ago, Tanger has never closed a year with occupancy lower than 95 percent across the portfolio,” he said. “We welcome synergy created by the dynamic retail environment.”
With 2013 sales of $61.9 million through July, the study projected Branson Landing would exceed $120 million in sales last year.
Allen said before the Branson Landing was developed, several resort properties were closed and crime in the Lake Taneycomo waterfront area was common.
“If it wasn’t for the Landing and the experience that was created, I think the city’s visitation numbers would be seriously challenged at this point,” Allen said.
Editor Eric Olson contributed to this report.
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