Cities and developers tell stories of luring Bass Pro

Huffman, CEO of Branson-based real estate development firm HCW LLC, said negotiations for a 40,000-square-foot store along Lake Taneycomo in downtown Branson moved swiftly. HCW agreed to spend about $15 million to build the store, a 16-slip marina and White River Fish Co. floating restaurant. Bass Pro agreed to a 27-year lease at an undisclosed rate.

“It was a situation where John and I just sat down and pretty much did the deal between the two of us,” Huffman said. “It was probably a little different than a lot of the other ones.”

Bass Pro officials agree that deals vary in degrees of difficulty. Every development deal is unique, because “every store is uniquely different,” according to Bass Pro spokesman Larry Whiteley.

Bass Pro is a destination retailer of fishing and outdoor gear, and landing one can be a coup for a community or a development. Bass Pro has 49 stores after last month’s opening in the Kansas City suburb of Independence; eight others are under development.

Bass Pro was established in 1971 as a bait counter in a Brown Derby liquor store, and the company opened its first store outside Springfield in 1995 in Atlanta. In the last four years, the chain has more than doubled, and company officials say more than 90 million people visit its stores each year.

The company has been a fixture of Forbes’ America’s Largest Private Companies list, ranking 135th in 2007 based on $2.66 billion in fiscal 2006 estimated sales. Revenues grew 38.6 percent from 2005.

Whiteley said more than half of Bass Pro’s customers at each store come from more than 50 miles away. Shoppers are attracted to the museum aspects, including aquariums, wildlife mounts and outdoor water features designed to fit each geographic location, Whiteley said.

“These are not cookie-cutter, nondescript concrete block stores,” Whiteley said.

So how can a community attract Bass Pro? Whiteley said the company tracks catalog sales, examines outdoor opportunities, and researches the number of hunting and fishing licenses to identify areas for expansion. Cities and developers try to sell locations based on population figures, high traffic counts and financial incentives.

Click here to view a breakdown of cities that have experienced efforts to reel in Bass Pro.

Decade of desire

In Ohio, Wood County officials tried for more than 10 years to reel in Bass Pro. On Aug. 30, their hard work paid off with the groundbreaking of a 150,000-square-foot store in Rossford, about five miles from Toledo. The store is slated to open in June.

Tom Blaha, executive director of the Wood County Economic Development Commission, said real estate developer Brian McMahon in 1995 identified land at the crossing of interstates 75, 80 and 90 on which to build a destination commercial project “the magnitude of a Disney (theme park).” McMahon targeted Bass Pro, even before Bass Pro began expanding outside of Springfield, because he was an outdoors enthusiast and had read that Bass Pro was the No. 1 tourist attraction in Missouri, according to Blaha.

Blaha, McMahon and then-mayor of Rossford Mark Zuchowski flew to Springfield to pitch the location to Bass Pro brass, who said they’d consider it if they ever started expanding.

As the years went by, Bass Pro started expanding but never knocked on Wood County’s door because of two tax-related roadblocks, Blaha said.

First, Wood County officials had to lobby the Ohio Department of Taxation to change a rule regarding taxation of catalog sales. Then, they had to lobby the state’s lawmakers to pass legislation that allowed them to use tax increment financing, a tool Bass Pro requested.

“By that time, Bass Pro had apparently seen how popular they were in other states,” Blaha said of Bass Pro’s leveraging power in requesting the TIF.

In 2006, Bass Pro bought 234 acres in Rossford for about $19 million, and committed to spending about another $30 million to develop the site, Blaha said.

In return, the Bass Pro store will receive a 75 percent rebate for 10 years on the county’s 1 percent sales tax.

Bass Pro is expected to sell off the majority of that land to other commercial developers, Blaha said. Whiteley would not comment.

Blaha said the county hasn’t announced their expected financial return from the Bass Pro deal, due largely to Bass Pro’s guardedness with expected revenue figures and the lack of citizen opposition surrounding the use of public incentives.

“That kind of anti-incentive attitude didn’t come up once,” Blaha said. “I was shocked.”

Debates have risen over incentives in other communities, such as Memphis, Tenn., and Buffalo, N.Y., where Bass Pro considered revitalizing abandoned sports arenas in order to develop megastores.

After two years of negotiations and within hours of missing a deadline, Bass Pro in January submitted a development agreement for the Memphis Pyramid arena. Bass Pro has offered to invest around $75 million, but it’s also seeking $30 million in government assistance and Memphis-area officials are still split on the deal.

The Buffalo News reported late last month that after “a series of false starts to bring a Bass Pro store,” the company is making progress on a proposed 150,000-square-foot store. Plans now call for new construction instead of rehabilitating the Memorial Auditorium. In Buffalo, Bass Pro is seeking $35 million in incentives, according to the report.

In Denham Springs, La., lawsuits arguing that tax incentives would unfairly take money away from area schools attempted to stop Bass Pro’s plans. The suits were unsuccessful, and a 163,000-square-foot store opened Feb. 6.

Stimulating incentives

Other deals using public monies have moved more swiftly. Officials in Broken Arrow, Okla., only worked for about two years to secure a Bass Pro store before it opened in October 2005.

Bill Roland, a Broken Arrow developer, pitched a location along Broken Arrow Expressway to Bass Pro in 2002, according to city manager James Twombly. The city took over negotiations in late 2003 because of the need to use incentives, and negotiations ended in May 2004.

Roland donated the land to the city, which borrowed $20 million to build the Bass Pro store.

Bass Pro, as it does with other developments, handled design and construction with city oversight.

Bass Pro is locked into a 20-year city lease at $850,000 a year, or 2 percent of annual store sales, whichever is higher.

Twombly said the first two annual payments have been $850,000, though both years the company had to make end-of-year balloon payments to meet that mark.

For the city to receive more than $850,000 per year, annual store sales need to exceed $42.5 million. The city’s annual debt obligation is roughly $1.95 million, according to city officials.

The city’s benefit extends beyond lease payments, which at least amounts to $17 million over 20 years, and additional sales tax generated by Bass Pro.

Since Bass Pro opened, $20 million in commercial construction has sprung up around the retailer, adding $1.25 million in sales tax per year to the city’s coffers, Twombly said.

Broken Arrow, about 15 miles from Tulsa, has annual sales tax revenue of about $28 million, Twombly said.

“We felt like at no time would we be subsidizing this store, even if it was the only retail establishment that developed out there,” Twombly added, noting that the deal struck for Bass Pro’s Oklahoma City store was “virtually the same” as the Broken Arrow deal.

Private pursuits

Negotiations with private developers don’t face some of the challenges that come with public incentives, but not every privately negotiated expansion moves like the wind, either.

Bloomfield Hills, Mich.-based mall developer The Taubman Co. landed Bass Pro as an anchor addition to Dolphin Mall in Miami. That store opened in October, but it took The Taubman Co. about four years to convince Bass Pro to open shop in the mall, which was built in 2001, according to Jerry Teitelbaum, Taubman Co.’s vice president of leasing.

“These complicated anchor deals typically take a bit of time to come together,” said Teitelbaum, who added that Taubman Co. funded store construction but declined to disclose lease terms.

Taubman Co. needed to illustrate a solid customer base to lure Bass Pro to Dolphin Mall, because Bass Pro already had five stores in Florida, three of which were in south Florida.

“We presented the idea of doing something a little bit different, which was more oriented to saltwater fishing and less emphasis on hunting, and they embraced it,” Teitelbaum said. “They saw a need, and we provided them with a number of demographic studies.”