Owasso Progress

Headlines

April 4, 2012

UPDATED: Sam’s Club chooses Owasso

Store to generate $1.8 to $2.2M in sales tax revenues, bring 300 additional jobs

OWASSO — The best kept secret in Owasso is now becoming public with a proposed development agreement between Sam’s Real Estate Business Trust and the city.

Under the agreement, Sam’s Club will build a 136,000 sq. ft. store on 18 acres of land at 96th Street North and 129th East Avenue. The entire development involves 30 acres, another five retail lots will be available for more development.

The development could spark $50 million in total developments.

The new development will bring approximately 300 new jobs to Owasso and construction is expected to begin by the April pending city council approval.

For more than two years rumors have floated over Owasso that Sam’s Club was planning to build a store in Owasso. In a specially called meeting of the Owasso Economic Development Authority, the development agreement was revealed for the first time publically.

“The store is projected to generate approximately $1.8 to $2.2 million in sales tax revenue annually,” according to a memo from Owasso’s Economic Development Director Chelsea Harkins.

The OEDA met and uanimously agreed Wednesday morning to recommend the agreement to the Owasso Planning Commission and Owasso City Council.

The planning commission will consider the agreement during its monthly meeting on Monday and city councilors will discuss it during its work session meeting on Tuesday.

City officials hope the council will vote on the agreement during their April 17 meeting. A super majority of the council, four votes, is needed to approve the agreement.

If approved project completion is expected to occur before the 2012 holiday shopping season, according to Harkins.

“Today to show that they want to invest again in a community that doesn’t fit their normal business model for Sam’s Club is not only refleclective on the large consumer base but that Owasso is growing and Owasso is going to continue to reinvest in itself for years to come,” Harkins said.

Representatives from Sam’s Real Estate and Tapp Development contacted staff last fall regarding their desire to construct a Sam’s Club in Owasso, according to Harkins.

“Sam’s normally only considers locating in communities (with) more than 100,000 population base,” Harkins memo states. “They chose Owasso based on the large projected consumer base coming south from the ‘funnel’ area and north from the Metro area. The traffic count data, existing retail sales and opportunity gap supported a case to build a store in Owasso.”

“I believe Owasso will be the smallest city in the world to have a Sam’s,” said Owasso City Manager Rodney Ray.”No money will be paid back to them if no money is made.”

Sam’s Club reported $49 billion in net sales for FY2011, according to www.walmartstores.com. Sam’s Clubs has 608 retail units with 81 million total square footage of space.

The Owasso facility would be Sam’s Club’s average model of store.

Cost for public improvements are projected at $4.56 million for the widening of 96th Street North and 129th East Avenue, new water and sewer lines to the site.

Sam’s Club will initially pay for the infrastructure improvements and be reimbursed through a payback of a percentage of its sales tax revenues. The agreement allows for Sam’s to receive $4,066,300 of their initial outlay. Harkins said the total amount would likely be repaid within six years.

Owasso has had similar development agreements in which the developer pays for the infrastructure improvements and is reimbursed through a payback from a small percent of its sales tax revenues. Previous developments at Smith Farms, Morrow Place and at Home Depot were actualized through the same repayment method.

“The agreement provides that Sam’s would be reimbursed up to one-sixth of the agreed amount annually. Based on estimates of sales tax that would be generated by the project, the city would receive additional sales tax of $10.8 to $13.2 million over a six-year period,” the memo states. “After reimbursement to Sam’s of $4,066,00 for the public improvements, the city would still have an estimated $6.7 to $9.1 million of increased sales tax revenues during those six years.”

The cost of water improvements would be $1,247,300. For sewer improvements the cost is $203,000. For the widening of the two streets the cost is $3,053,000.

The costs include design, construction, survey and geotechnical services.

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