Cabela's opening in Hammond with significant Indiana state aid

Cabela's announced on May 19 that its plans for a 185,000-square-foot superstore in Hammond, Ind., are moving forward after the state agreed to commit $9 million in road and infrastructure improvements to accommodate the store and additional development on the 100-acre site.
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Cabela's announced on May 19 that its plans for a 185,000-square-foot superstore in Hammond, Ind., are moving forward after the state agreed to commit $9 million in road and infrastructure improvements to accommodate the store and additional development on the 100-acre site. Additionally, the state has agreed to complete a flood-control levee on the Little Calumet River by the end of 2008. There were apparently other incentives that officials from both Cabela's and the state declined to discuss -- although Cabela's noted that they were generous when thanking the Indiana Economic Development Commission during the public announcement of the deal. 

Reportedly, the state agreed to the incentive package with the expectation that it will spur even more development in the local area, resulting in increased tourism and, as a result, increases in revenues both for the local municipality and the state. Cabela's has indicated that the company will invest about $60 million in the project, which will be built on a former country club site it acquired for $14 million in October 2005.

Local area hotels as well as the convention and visitors bureau are anticipating increased destination travel as a result of not only the Cabela's store but also a Bass Pro Shop which will open in November 2006 -- only 17 miles away.

Cabela's now is in the process of getting permits, and engineering, architectural and site plans for the new store scheduled to open in late 2007 or early 2008.

Once open, it is expected that the Cabela's store will result in 400 new jobs, as well as more jobs in peripheral development and an untold amount of sales, payroll and lodging taxes for the area.

Cabela's officials noted that its stores are historically major tourist destinations. In 12 of the company's current stores, 50 percent of the store's visitors are from outside a 50-mile radius. In the other two stores, 60 percent of the customers are from outside that zone. Shoppers spend an average of three and a half to four hours in a Cabela's store, it said.

SNEWS® View: We'd like to know what you think about economic and other incentives provided by government entities to entice and secure businesses such as Cabela's to build or locate in a particular region. Cabela's has stated that the state support and incentives are more than justified in return for the peripheral development that Cabela's complex will attract, the millions in sales tax revenues that will be produced, and the jobs it will bring to the area.

On the plus side, Cabela's clout has sped up the flood control levee construction by the state. Locals are reportedly ecstatic, as it will mean flood insurance for residents will become much cheaper to carry by 2009. And there is little doubt that one can point to a host of other more immediate economic benefits, such as increased payroll and sales taxes.

On the other hand, local retailers can and have argued in numerous cases that they are being unfairly treated as no incentives are being offered to them. What happens when those retailers get squeezed out, perhaps even closing down? What is the economic impact there -- or is it so insignificant in the long term it really doesn't matter? Is this a case where size really does matter?

Click here to voice your opinion in our SNEWS® Chat set up just for this topic -- it is private and viewable only by SNEWS® subscribers, so feel free to open up the discussion and bare your soul.

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