A longtime local businessman Tuesday welcomed the competition from Oklahoma City’s newest outdoors store while, in so many words, reminding city council members whose horse they rode in on.
Nebraska-based Cabela’s plans to open a showroom late next year in northwest Oklahoma City after winning up to $3.5 million in taxpayer incentives with city council approval Tuesday morning.
Based on projections of $36 million in annual sales, the sales tax rebates would be paid over eight years at a rate of $432,000 per year.
Cabela’s is building a $10 million, 80,000-square-foot “Next Generation” showroom in Chisholm Creek, at Western Avenue and the Kilpatrick Turnpike.
Tom Adams is general manager of Backwoods, the outfitter with a store at N May Avenue and NW 122 Street, about two miles from Chisholm Creek.
Adams said Cabela’s arrival would promote outdoor activities and prompt Backwoods “to step up our game.”
But he also said Backwoods — by sponsoring activities such as trail and shoreline cleanups — has helped build Oklahoma City’s outdoors community.
“Don’t forget about the guys who’ve been here in Oklahoma City doing the outdoors thing for 40 years,” he said. “We’ve been a valued part of this community.”
Founded in 1961 as a mail-order business in Chappell, Neb., Cabela’s has grown into a publicly traded company that bills itself as the “World’s Foremost Outfitter” of hunting, fishing and outdoor gear.
According to its website, the company’s foundation remains its catalog business, shipping to all 50 states and 125 countries.
Cabela’s began Internet sales early, in 1998, and says its lodge-inspired showrooms are “as much wildlife museums and education centers as retail stores.”
Oklahoma City’s analysis projects the Chisholm Creek showroom will generate $1.4 million in sales taxes annually, including $360,000 for MAPS 3, $270,000 for police and fire, and $45,000 for the zoo. About $432,000, or 1.2 cents for every dollar in sales, would be returned to Cabela’s as a rebate.
If the store performs below expectations, the incentives would expire after 10 years.
Expectations are the store will draw up to 1.35 million shoppers per year, with some coming to Oklahoma City from communities as far as two hours away.
Cabela’s is the city’s fourth retail incentive deal, after the Bass Pro outdoor store in Bricktown, an outlet mall and a Von Maur department store.
Ward 2 Councilman Ed Shadid questioned how the Cabela’s deal fits the council’s 2008 retail incentives policy, saying it fails to meet criteria for persuading retailers to invest in “underserved or blighted areas of the city.”
Shadid, who voted against the deal, decried state law that forces cities to rely on sales tax to fund day-to-day operations.
He said Midwest City had purchased land in Oklahoma City to block Oklahoma City from getting a Walmart, and suggested Minnesota as an example where cities aren’t pitted against one another in a competition for retailers and the sales tax they produce.
“We need a regional policy so we’re not all in a race to the bottom,” Shadid said.
“Ed, in Minnesota they share sales tax statewide and that’s why the municipalities don’t compete with each other,” said Mayor Mick Cornett. “We’re playin’ the hand that we’re dealt.”
“So put it on the legislative agenda, work with our legislators, I agree,” Shadid said. “Work at the state level. Otherwise, we’re all going to be locked into a race to the bottom.”
In other business
The city council on Tuesday set a public hearing for July 15 on a proposal to restore restrictions on keeping backyard chickens in Oklahoma City.
The council earlier inadvertently lifted a restriction confining chickens to lots of an acre or more in size.
How the deal works
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 day-to-day city 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.