State money needed to draw Cabela's to Hammond, mayor says

HAMMOND | With the easy part out of the way -- negotiating a controversial land sale with 150 politically fractious region power brokers -- Cabela's Inc. can get down to the hard part of building a large sporting goods store.

The next major hurdle, city officials say, is convincing Gov. Mitch Daniels' administration to use state sales tax money to pay to develop the Woodmar Country Club into commercial land.

"They expect the state of Indiana to step up, like other states have stepped up, because this is a tourist attraction," Hammond Mayor Thomas McDermott Jr. said. "It's literally tens of millions of dollars that have to be used to improve that property."

The members narrowly approved an offer Thursday from Cabela's to buy the club's land and assets for $14 million. Alex Dmyterko, an Illinois commercial land broker, said Friday's he still has not decided whether to file litigation that could interfere with the sale.

Cabela's spokesman David Draper said the company hopes to build a large retail store in Hammond, probably between 150,000 and 250,000 square feet, on the site of the 80-year-old country club.

The company's other stores feature extensive wildlife displays in addition to extensive outdoor sporting merchandise. They're known to attract visitors by the millions. A store just opened in Salt Lake City is expected to become Utah's biggest tourist attraction.

"We attempt to design our destination retail stores to provide exciting tourist and entertainment shopping experiences for the entire family. We believe these factors increase the revenue for the state and local municipality where the destination retail store is located," Cabela's declared in a filing with the federal Securities and Exchange Commission this year.

Weston Sedgwick, spokesman for the Indiana Economic Development Corp., said he was aware of the Cabela's deal, but no decision had been made on the possibility of state financing for the new store.

"It would be kind of premature for us to comment on that. We have not at this point made any commitments in that area," Sedgwick said. "There's still a lot of homework to be done."

Specifically, the vehicle to channel state money into the project is called STIF, or State Tax Increment Financing.

Hammond is one of five cities in Indiana where state lawmakers have legalized STIF financing. The others are Indianapolis, South Bend, Fort Wayne and Evansville. Hammond got permission from the state legislature to use STIF in 1993, but has never gotten a governor's permission to activate it.

STIF can take several forms, but in the most commonly described version, bonds are sold to make infrastructure improvements like roads, curbs and flood plain upgrades. The bonds are then repaid using state sales tax money that is generated by the new development over the subsequent years or decades.

Hammond financial consultant Ed Krusa said the STIF is only a possibility after the city exhausts its potential for locally funded tax-increment financing subsidies, commonly known as TIF.

McDermott said the amount of money the city could generate though its local TIF "is not anywhere near what Cabela's will need."

Draper acknowledged that the company will expect subsidies similar to what it has seen in other areas, but he said it's too early to name a price.

Company planners have held off on even the most basic decisions, like where the footprint of the building would be located, until after Thursday's sale was accepted by Woodmar's membership. With that protracted process out of the way, company and city officials can begin the finer points of negotiating the deal.

"Now we have to do our due diligence, and the biggest part Cabela's is interested in is the incentive package," MdDermott said.

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