The city of Memphis has Bass Pro Shops Inc. on the hook for a new store at the site of a former sports and entertainment venue, but now it has to get the Springfield, Mo.-based outdoors retailer in the boat.
Bass Pro president Jim Hagale and Memphis Mayor A C Wharton signed a preliminary lease agreement Wednesday morning to retrotfit the Pyramid.
The lease has to be approved by the Memphis City Council and Shelby County Commission. The state also has to ink Tourism Development Zone approvals, which would funnel sales taxes generated by the retailer to the project.
The city council will hear the proposal July 27.
The Bass Pro store in the Pyramid is part of a larger $100 million Memphis Gateway Redevelopment Project, which encompasses the Pinch District.
In Buffalo, Bass Pro is expected to serve as the retail anchor for the Canal Side development along lower Main Street at the former site of Memorial Auditorium. Representatives from the Erie Canal Harbor Development Corp. hope to have a final agreement with Bass Pro this summer and begin construction on the 150,000-square-foot store by early winter.
The store, in the planning and negotiation stages for several years, is slated to open by 2012.
The Bass Pro-Memphis lease agreement is for 20 years with options for seven renewal periods of five years each for the Pyramid, which has 265,740 square feet of space on 40 acres.
The lease will generate $20 million of lease payments to the city during the period and create more than 1,000 jobs, according to Robert Lipscomb, the city's pointman on the project.
"This takes an underperforming asset, really an asset which had become a liability, and transforms it into something before our eyes which is productive," he said.
The project is getting $41 million in Federal Recovery Zone Facility bonds and $27.7 million in Recovery Zone Economic Development bonds. The city is looking to get additional money from the state for other parts of the city, according to Lipscomb.
Bass Pro's rent could be 2 percent of annual gross sales excluding the sales of boats, recreational vehicles, off-road vehicles and all-terrain vehicles which would be calculated at 1 percent or the minimum percentage rent, whichever is greater. The minimum rent is $880,000 during the first year and $1 million during each subsequent year.
"It's often said the best things are worth waiting for and that is certainly the case today," Wharton said. "I think I can say this without exaggeration that this is the most complex and complicated public/private partnership ever undertaken in this region."
RKG Associates Inc. projected in 2008 that the project will produce $248 million in tax revenues for city and county governments over 15 years.
The project would take 18 months to construct. Hagale said the company is still aiming for November 2011 to open.
Wharton said almost half of the Bass Pro customers will come from out of the city. He also emphasized no city taxes are going to the Pyramid and that the building will remain city property.
All of Bass Pro's plans are not finalized yet but the Pyramid site can be used for much more than a retail store. In addition to retail, the site is approved for a bowling facility, an indoor gun or archery range, an indoor golf range, an aquarium, a museum, a food service court and restaurants. The property can't have a hotel due to seismic limitations, Hagale said.
The seismic retrofits could cost up to $5 million, but that number could change as workers get into that part of the project, according to Lipscomb.