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Cabela’s: Here’s the deal on taxpayer incentives

by William Crum Published: June 26, 2014
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Oklahoma City is proposing $3.5 million in incentives with the goal of keeping outdoors outfitter Cabela’s in the city, rather than letting it go to a suburb such as Moore.

Ward 2 Councilman Ed Shadid said earlier this month that the proposed deal with Cabela’s for its Oklahoma City store amounts to “extortion.”

Here’s how the incentives will work:

Whatever city plays host to Cabela’s will capture a significant stream of sales tax revenue — and under Oklahoma law, cities must rely on sales taxes for day-to-day services such as police and fire protection.

The Cabela’s store in Oklahoma City will collect 8.375 cents for every dollar spent on items subject to sales tax.

That includes 2 cents for the city’s general fund, which is where the money resides for those day-to-day expenses.

As that money rolls in, Oklahoma City will rebate 1.2 cents to Cabela’s, up to $3.5 million.

After that, the city will collect the full 2 cents as long as the store continues to operate.

The deal as proposed will run for 10 years.

The law that forces cities to rely on sales taxes puts communities in competition with one another for retailers, as Ward 1 Councilman James Greiner observed during the discussion about Shadid’s “extortion” comment.

The council voted 7-1, with Shadid opposed and Ward 6 Councilwoman Meg Salyer absent, to authorize negotiations with Cabela’s.

The Oklahoma City Economic Development Trust and city council will vote again before it takes effect.

Worth considering: Deidre Ebrey, director of economic development and marketing in Moore, said in a radio interview that she probably would have offered Cabela’s more.

by William Crum
Reporter
OU and Norman High School graduate, formerly worked as a reporter and editor for the Associated Press, the Star Tribune in Minneapolis, and the Norman Transcript. Married, two children, lives in Norman.
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