Von Maur announced Wednesday it will open a store at Quail Springs Mall after the city of Oklahoma City approved a sales tax incentive worth $2 million over 10 years.
The Davenport, Iowa, based department store is just the second retail outfit offered such a deal by the city as a way to increase its sales tax base. The Outlet Shoppes at Oklahoma City, which opened in August 2011, is eligible to receive up to $5.5 million in reimbursements for regional marketing costs over 10 years.
Von Maur said the 150,000-square-foot Oklahoma City store will open in the fall of 2014 and will be the first in the state. It is expected to generate $40 million in annual sales, city documents show.
In its agreement with the city, Von Maur can receive a sales tax rebate of up to $225,000 the first year and $275,000 by the eighth year. To qualify, the retailer's sales must be at least $27.5 million the first year and $30 million each year after for the remainder of the agreement.
Von Maur will replace Sears as an anchor tenant at Quail Springs Mall; the Sears closed Feb. 1. A subsidiary of General Growth Properties, which owns the mall, agreed to spend at least $15 million buying and remodeling the space as part of the tax incentive agreement. County records show $8 million was spent purchasing the property from Sears.
Jim Parrack, senior vice president of retail at Price Edwards & Co., said cities across the country have started offering incentives to lure retailers as cities compete for tax dollars and more retailers have come to expect it — or at least ask for it.
Few department stores are adding locations of the size that was available at Quail Springs Mall, which may have limited the mall owner's options, he added.
“There's not a huge market for anchor space around the country. It would have most likely taken a number of years, in my opinion, to have recruited someone to the space,” he said. “Von Maur is a good get.”
Von Maur's stores are furnished with antiques and in-store pianists entertain shoppers during business hours. Customer service includes free, year-round gift wrapping. The stores carry upscale national and specialty brands like Coach, Kate Spade, Free People, Eileen Fisher, Joe's Jeans and Tommy Bahama.
Renovation of the space begins this summer and will include an exterior brick facade. The store eventually will employ 150-175 workers.