Mega retailers provide optimum outdoor opportunities, but how do cities lure them here in the first place?
By Mica Thomas Mulloy
Glendale and Mesa may as well be bringing amusement parks into their respective towns. Upcoming additions to the cities are expected to draw millions of visitors each year—many traveling from hours away—and infuse hundreds of millions of dollars into municipal coffers. But it isn’t Disneyland and Six Flags opening their doors in the Valley; rather outdoor mega-retailers Cabela’s Inc. and Bass Pro Shop.
Cabela’s plans its grand opening at the end of August in the Zanjero Business Park near Glendale’s Westgate City Center. Bass Pro Shop recently broke ground in Mesa’s super-sized Riverview retail center at the confluence of loops 101 and 202. Both sporting megaliths are highly coveted and, much as IKEA put Tempe on the retail destination map, are expected to edge West and East Valley commerce opportunities toward retail nirvana.
Born in the ‘War Room’
Cabela’s opens in the midst of Glendale Arena and Cardinals’ stadium to offer West Valley residents a super supply of hunting, fishing and outdoor gear. Cabela’s spokesman David Draper says when his company looks for a retail location, executives first examine their mail-order customer base. They literally pinpoint their customers on large maps in their retail “war room” and determine if there is a large enough demand. With countless recreation opportunities in Arizona and metropolitan Phoenix, Glendale was a good match. “Obviously there is a great opportunity there,” Draper says.
Cabela’s purchased a 28-acre site in September 2005 and anticipates hosting 3 to 5 million customers in its first year. The store will feature acres of sporting displays, a freshwater aquarium and a centerpiece mountain replica complete with running waterfalls and streams.
The retailer received some help along the way—Glendale foot the bill to add necessary infrastructure as a development incentive. “The way we look at it, we are bringing something to the area,” Draper says. “To put our store there, we are going to need some infrastructure.” Glendale Economic Development Director Karen Thoreson says the city agreed to build public improvements based on the calculated financial boom Cabela’s should bring: an estimated $34.6 million in tax revenues over 10 years. “It’s bringing in a lot of business around it, it’s bringing in a lot of people who have never been to this side of the Valley,” she says.
Thoreson believes the area will experience supplementary benefits upon the mega-retailer’s arrival such as more than 1 million annual tourists and the addition of 300 new hotel rooms worth $30 million. “People come to Cabela’s like they come to Disneyland,” she says.
How to Land a Retail Giant
Marty DeRito, DeRito Partners CEO and Riverview developer, wanted to kick off the 250-acre commerce center with a unique anchor tenant. With that in mind, he, project partner Kimco Developers and Mesa economic officials started pursuing IKEA and Bass Pro Shop. When IKEA signed on with Tempe, all focus moved to Bass.
DeRito notes Bass Pro Shop, which sells everything outdoors from boats to bait, was interested, but also looked elsewhere in the state and toward California for their next location. “I had as much competition from other states as I did locally,” he says.
A Mesa contingency traveled to the International Council of Shopping Centers convention several years ago to meet with Bass Pro Shop executives and tout what Mesa, and the entire region for that matter, had to offer the retailer.
DeRito said Riverview will ultimately house three to five auto dealerships, 1.5 million square feet of retail space, 400,000 to 500,000 square feet of office and commerce facilities and two hotels. The center is expected to employ 5,000 to 6,000 people, making it one of the largest employers in the region.
After two years of negotiations, Bass Pro Shop was hooked and signed a letter of intent. Larry Whiteley, Bass Pro Shop manager of corporate public relations, says regardless of what a developer offers, all the puzzle pieces must fit together perfectly before the retailer makes a move. “They could offer the moon, but it still has to be right for us,” he says. “We have to research it ourselves and find out if there is a built-in customer base.” Bass looks at the number of hunting and fishing licenses sold in an area, zip code reports of catalog sales and the area’s outdoor activities. Whiteley says in Mesa’s case, everything fit. “We wouldn’t be considering this and doing this if we didn’t feel confident with this,” he says.
With Bass Pro Shop now on board, DeRito Partners and Mesa came to terms on an incentive package for the project. Developers agreed to front $42 million needed to get the center on its feet with the possibility of earning that money back in coming years with shared retail-generated sales taxes.
DeRito says if the center, and therefore the city, makes money, the developers earn some of their down payment back. If not, it is the developer who will suffer, not the tax payers.
Mesa Economic Development Management Assistant Scot Rigby says the incentive package is a win-win situation for Mesa, and the region as a whole. “Since you’re performing, since you are truly becoming a benefit to the city, you are eligible for these types of incentives,” he says of the plan’s structure.
Rigby believes Bass Pro Shop’s agreement to build in Mesa speaks volumes not only for the store and local citizens, but also the economic viability of the entire valley. “The region is showing national retailers that they need to be in Arizona if they are going to be successful in their plans as a business,” he says. “It’s too big of an area for them to overlook now.”