Sporting goods store sales tax deal approved by city, county

Tuesday, October 16, 2012
Cape Girardeau's new sporting goods store, Academy Sports, will be located between Kohl's and Sam's Club. (Laura Simon)

A development deal to earmark a portion of sales tax revenue from a new sporting goods store to repay the developer for infrastructure costs was approved Monday by Cape Girardeau city and county officials.

The agreement, related to the opening of Academy Sports + Outdoors at 270 Shirley Drive, is an amendment to a similar deal put in place among the same three entities when Kohl's was built in 2004.

During separate meetings Monday, the Cape Girardeau City Council and the Cape Girardeau County Commission approved the amendment for Academy Sports' $1.8 million retail development, located between Sam's and Kohl's. The commission and city council unanimously approved the amendment.

Under this agreement, just as with Kohl's, the city and county would use a portion of sales tax collected from the new store to reimburse the developer, Drury Development Corp., for public improvements. These could include parking lots, lighting, utility work and stormwater detention.

The infrastructure costs associated with the Kohl's development totaled $3.1 million, according to the city of Cape Girardeau's finance department. To date, the city and county combined have paid Drury Development Corp. just more than $1.1 million toward the reimbursements for infrastructure costs.

Cape Girardeau Area Chamber of Commerce president and CEO John Mehner, who is serving as interim director of the Magnet industrial recruiting organization, told commissioners there are improvements in the Academy deal, compared to the Kohl's agreement.

The Kohl's agreement required the city and county to pay Drury back with a 4 percent interest rate, but that provision was eliminated in the amendment to the agreement for the Academy Sports development.

Another improvement in the agreement for Academy Sports is that the city and county will keep all sales tax collected on the first $2.5 million in sales from Academy.

"Cities and counties all live on sales tax money," Mehner said. "We have to protect the base to make sure there is not just a shift in funding. There must be an increase in tax funding."

Only after meeting that threshold will the city be required to pay the developer. City sales tax rates are broken up into several categories.

After the initial $2.5 million, the developer, Drury, would receive:

* 0.25 percent of capital improvements water sales taxes collected from the store

* 0.25 percent of capital improvements and sewer sales taxes collected

* 0.5 percent of transportation sales taxes collected.

The county would earmark 50 percent of its county sales tax collected from the store, above the $2.5 million base, to repay Drury.

The funds collected by the city and county would go toward repaying the Kohl's infrastructure costs first, then toward the cost of the Academy projects.

Cape Girardeau County Presiding Commissioner Clint Tracy said it is important to note that the action the county is taking was an amendment to an existing agreement. A similar agreement was also put in place for Sears Grand.

"It's not like we're doing this for the first time," he said.

County Commissioner Paul Koeper said the store would draw shoppers from all around the area to Cape Girardeau, further benefiting the area.

Danny Foutz, who has owned Foutz Hunting and Fishing Shop in the Town Plaza Shopping Center said he doesn't like the idea of city tax dollars going to pay a developer who is brining in competition for his store.

He's concerned about the affect this new sporting goods megastore will have on his business and other small hunting and fishing retailers in the area.

His sales reps for the companies he buys equipment from have also expressed concerns to him about losing commissions as a result of the new store. Its purchases will all be made out of its Texas headquarters, Foutz said, not from the regional sales representatives he deals with. "There are ample opportunities to find these items at other locally-owned places," he said.

Academy Sports + Outdoors will build a 71,680 square-foot store at 270 Shirley Drive, according to a building permit application filed with the city of Cape Girardeau.

The outdoor lifestyle retailer offers hunting, fishing, and camping equipment, along with sports and leisure products, footwear, apparel and more.

A representative of Drury Development Corp. in St. Louis did not respond to requests for comment about the Academy Sports project.

YearCityCountyTotal
2006165,817.9541,455207,272.48
2007121,637.1330,409152,046.13
2008122,033.9530,509152,542.45
2009122,202.6130,550.65152,753.26
2010136,137.7233,055.64169,193.36
2011133,163.9532,836.90166,000.85
2012 to date103,759.4325,780.42129,539.85
Total to Drury904,752.74224,5961,129,348.38

mmiller@semissourian.com

388-3646

Pertinent address:

270 Shirley Drive, Cape Girardeau, Mo.

Map of pertinent addresses

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