Kohl's, Sears planning new Cape stores

Two national retailers plan to build stores in west Cape Girardeau in the next year, Mayor Jay Knudtson announced Thursday, ending months of speculation.

Kohl's Department Stores and Sears, Roebuck and Co. have tentatively agreed -- subject to tax incentives from the city-- to build facilities on opposite sides of Siemers Drive.

Both retailers' plans hinge on a financing package that would use city and county sales-tax revenue to fund needed infrastructure. Pending approval of the Cape Girardeau City Council and the Cape Girardeau County Commission, both companies intend to begin construction immediately and open their new stores by Christmas 2005. The new stores are expected to create more than 300 jobs.

Sears will build a new concept store called Sears Grand -- offering familiar Sears merchandise plus health and beauty products, snacks, pantry items and other family-oriented products -- just south of the existing Goody's store on Siemers Drive. It will be the sixth Sears Grand store in the nation.

Kohl's, a family-oriented department store offering national brands, will be located across Shirley Drive from Lowe's home improvement store.

Knudtson made the announcement at a city hall news conference attended by members of the county commission, city council, economic development groups and the Cape Girardeau Chamber of Commerce. The mayor said the arrival of both developments at the same time shows the city is still the hub of regional activity.

"This was a collaborative effort that took 12 months to work out," Knudtson said. He credited the city, county and chamber along with the efforts of the Cape Girardeau Area Industrial Recruitment Association and Drury Land Development Inc. of St. Louis with bringing the new businesses to Cape Girardeau.

Sears Grand

Sears will vacate its existing store on William Street in the Town Plaza when the new Sears Grand opens.

"Cape Girardeau is a thriving market," said Sears spokeswoman Kathleen Connolly in a telephone interview. "We love it as a Sears market, and we wanted to stay there."

The new one-story, 150,000-square-foot Sears building will triple the size of its Town Plaza location.

Sears Grand is an extension of the company's mall-based stores. Putting a Sears Grand in the Cape Girardeau market is an experiment for Sears, Connolly said.

While not necessarily the smallest market of the Sears Grand stores, Connolly said the Cape Girardeau location will be the first single-store market. The other Sears Grand stores are located in suburban areas where other Sears stores may be less than 10 miles away. The Cape Girardeau store will serve a much wider trade area, which is why its proposed location visible from Interstate 55 is ideal, she said.

Sears Grand will retain the 87 employees at the current Sears and hire 65 more full-time and 88 more part-time workers. Sears Grand expects to top $21 million in revenue in its initial year of operation.

Kohl's

The Wisconsin-based Kohl's plans to erect a one-story, 88,248 square-foot building on a recently annexed 10-acre lot in the Cape West Business Park. The store is expected to employ 144 full-time and 15 part-time workers.

The company, which operates 589 stores in 38 states, had $10.2 billion in sales for 2003. It expects the Cape Girardeau outlet will generate $10 million in sales annually.

Knudtson said the negotiations leading up to Thursday's announcement were one-sided, with both companies wielding leverage.

"These companies can go anywhere they want to go," he said.

A creative approach to development costs was a key component in both deals, Knudtson said. City and county sales-tax revenue from sales at the two new stores will be used to fund public improvements involved in both developments. Sears and Kohl's will pay upfront for the development costs, and the city and county will reimburse them from newly generated sales-tax revenue.

Revenue from some city and county sales taxes collected at Sears Grand on sales exceeding the $12.5 million currently generated by the existing Cape Girardeau Sears store will go toward repaying the anticipated $4 million in public improvements over the following 15 years.

In a similar agreement, some city and county sales-tax revenue from Kohl's sales will go toward improvements. The estimated cost of the public improvements for the Kohl's project is $2.1 million.

"We feel we've done everything in our power to make this a win-win situation for everybody," said chamber of commerce president John Mehner.

Knudtson said that under these agreements, the respective companies are putting revenue they generate from sales back into the improvements, which will include parking lots, drainage and landscaping.

The city council will be asked to approve the development agreements at a special session at 10 a.m. today at city hall. The county commission is expected to consider the plan at its meeting Monday.

trehagen@semissourian.com

335-6611, extension 137