In a deal born after a long courtship involving more than $9 million in public incentives, outdoor gear retailer Cabela’s plans a 72,000-square-foot store with an archery range at Interstate 45 and Big League Dreams Parkway.
Sidney, Neb.-based Cabela’s Inc., which, through retail stores, mail-order catalogs and online sales is the world’s largest direct marketer of hunting, fishing and camping merchandise, said Thursday it would begin construction of the store — its first in the Houston area — later this year.
The League City store’s interior would offer customers an outdoor-like experience with a large mountain replica, museum-quality wildlife displays and an aquarium, officials said. Along with thousands of products, the store will include an indoor archery range, gun library, “Bargain Cave,” deli and fudge shop. The exterior will include the log construction, stonework, wood siding and metal roofing for which the retailer is known.
Cabela’s plans to hire 170 full-time employees, officials said.
“We believe the Cabela’s store will be a regional draw and will help get people traveling through League City on Interstate 45 off the interstate to visit the store, in particular, those tourists traveling to and from Galveston Island,” Owen Rock, League City economic development manager, said. “We are confident that it will bring more tourists to League City.”
The League City store will mark Cabela’s sixth in Texas, where it operates in Fort Worth, Buda, Allen, Waco and Lubbock.
Because Cabela’s stores attract shoppers from far away, luring one to a community doesn’t come cheap or easy.
Cabela’s and rivals such as Bass Pro Shops are known more as tourist destinations than retailers and often are able to command financial incentives from communities. Officials with Cabela’s in the past have argued building destination stores is expensive and communities who have offered incentives have made wise investments.
In some cases, economic incentive agreements for Cabela’s have been controversial and the company has had to return some money after not creating specific numbers of jobs required by subsidy stipulations.
But Cabela’s in recent years has changed its business model, in some cases preferring developers deal with governmental entities. In the case of League City development, officials have offered an incentive to Pinnacle Alliance Fund, which is developing the retail center Cabela’s will anchor.
The city and Pinnacle entered into what is known as a 380 agreement, Rock said.
First, Pinnacle must create a pad site for Cabela’s and Cabela’s must build the store. Pinnacle, in addition to the Cabela’s building, must develop another 110,000 square feet of new retail within three years of Cabela’s opening.
The 380 agreement states the city will reimburse the developer up to $9.3 million over 15 years, or when the development commitment is met, whichever comes first. The reimbursement will be paid from the sales tax revenue generated by the Cabela’s store and the other new retail.
“The developer has a contract with Cabela’s that is separate from ours,” Rock said. “Our contract with the developer states that a Cabela’s store will be constructed along with the 110,000 retail. If the Cabela’s is not constructed we do not have to pay any incentives to the developer. It is all performance based.”
Rock said Thursday he didn’t know about financial agreements between the retailer and the developer, or whether Pinnacle planned to pass the reimbursements on to Cabela’s. Neither Pinnacle nor Cabela’s representatives could be reached Thursday to elaborate.
League City has courted Cabela’s for some time.
“This was a team effort from city leadership and city council.” Rock said. “Staff and council put a lot of hours into getting the deal completed.”
Cabela’s is a major coup for the city and for Pinnacle, which last year acquired 100 prime acres near Big League Dreams Sports Park with plans to develop a sizable mixed-use project of retail, restaurants, hotels, offices and, possibly, multifamily dwellings.
On the same day it announced plans for a League City store, Cabela’s released its third-quarter earnings, which saw an 8 percent increase.
Net income was $53.8 million, up from $49.9 million in the third quarter a year ago. Cabela’s reported diluted earnings per share of $0.75, compared to $0.70 a year ago.
Total third-quarter revenue of $886 million was up 4.1 percent over a year go, with retail store sales up 8.7 percent to $598.7 million.
Cabela’s opened six new stores during the quarter.
The company plans to open as many as 15 new stores a year over the next several years, officials said.
The League City store is scheduled to open in the fall of next year.