Could Hammond buy Cabela's land?

HAMMOND | When Cabela's Inc. plunked down $14 million to buy a 93-acre golf course in the city, company officials had good reason to believe they could at least get their money back.

Mayor Thomas McDermott Jr. said Cabela's likely could resell the land to the city of Hammond in the unlikely event the company doesn't receive the $65 million to $75 million in incentives they've requested.

The mayor said officials from the Nebraska-based mega-retailer even asked for a written agreement that, if all else failed, the city would buy the land and assure the company it could recoup its $14 million investment.

But no deal was signed.

"Believe me, Cabela's asked for that, and we said no," McDermott said, adding that such an agreement might have affected the continuing negotiations between Cabela's and state leaders on financial incentives.

Cabela's purchased the Woodmar Country Club at Indianapolis Boulevard and the Borman Expressway for $14 million on October 31.

City officials have already pledged $25 million in local tax increment financing bonds. But state officials have balked at floating another $45 million to $55 million in state tax bonds.

The incentives would divert the local property taxes and state sales taxes created by the new development into bonds that will be used to help build the store. A successful development would eventually pay down the entire debt without public subsidy. But, until then, the public essentially helps defray the financial risk in the deal.

Officials from the Indiana Economic Development Corp. are in intense talks with Cabela's to strike a middle-ground incentive package both sides can live with.

If Cabela's requests are rejected, "It will look to sell because it's not in the real estate game," McDermott said. But if that doesn't happen, "The city's Redevelopment Commission would be interested in buying and marketing the property," he said.

For $14 million, the city could probably make money marketing the property, although it wasn't clear how the Redevelopment Commission could make the infrastructure improvements needed to make it commercially viable.

The mayor's comments surprised city financial consultant Edward Krusa.

"It's an option, but how would he buy it? How could we pay for it?" Krusa said. "We haven't talked about it. In order to buy it, a financing scheme would have to be put in place. I haven't been asked to look at it."

Hammond also has approved the site's rezoning from country club to commercial, but the rezoning is contingent on the outdoor outfitter's actual construction of a store. If Cabela's doesn't build, the zoning would revert to "golf course" zoning, McDermott said.

However, for property tax purposes, the former club's assessment will increase more than 1,000 percent on March 1.

North Township Assessor John Matonovich said as a golf course, all but the 1 acre -- where the club house stands -- was assessed as agricultural land.

All of it will change to "primary land" because of its sale, with the fair market-based assessment increasing from $1,327,000 to about $14,446,000, the assessor said.

The project's next move is in the hands of the state Board of Finance, McDermott said.

The board is comprised of the director of the state budget agency, the state auditor and the state treasurer. At a public hearing, the board will listen for arguments for granting Cabela's Sales Tax Increment Financing request. McDermott said he expects the hearing will be held in the next two to three weeks.

The Indiana Economic Development Corp. is advising the Board of Finance on the incentive request, corporation spokesman Weston Sedgwick said.

Plus, the corporation is currently meeting with Cabela's to determine what other incentives the state could provide, if any.

Sedgwick said he couldn't comment on the type of those incentives or their amounts. He couldn't set a timetable for a decision, and he said the Board of Finance hasn't set a hearing date.