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Cabela's changes its mind and will not build store at Greenwood site
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By now, Greenwood expected to be the home of Central Indiana's only Cabela's, reaping the tourist dollars and new development that the outdoors megastore has brought to other suburban cities around the country.
But within months of the announcement two years ago that Greenwood had landed the popular retailer, that vision began slipping further into the future. The economy soured, Cabela's postponed its groundbreaking and the 102 acres at County Line Road and I-65 remained undeveloped.
Cabela's finally announced Thursday it had dropped plans for the store.
Despite the economy's downturn and the earlier postponements, the news puzzled Greenwood leaders who had pinned their economic development hopes on Cabela's, as well as developers who already had started taking the bait.
Scott Langdon, owner of Indianapolis-based Langdon Real Estate Services, represents a group of investors that had acquired 85 acres surrounding the site.
"I'm shocked, actually," he said. "It's a blow to the area for sure."
The city was prepared to loan Cabela's $18 million to build there and had spent $130,000 in preliminary planning and legal work.
Greenwood Mayor Charles Henderson was out of town Thursday and unavailable to discuss Cabela's. Other city leaders said they remain optimistic about finding another developer, and local and national analysts predict a strong market once the economy improves.
"I think Greenwood is a good location," said Derek W. Leckow, a retail analyst at Barrington Research Associates in Chicago. "There's a lot of customers there and a lot of market density.
"I don't think they've killed that location for good."
For instance, Langdon sold a 42-acre parcel just south of Cabela's to OrthoIndy and the Indiana Orthopaedic Hospital, which will break ground soon on a $22 million, 75,000-square-foot building.
"While it's extremely disappointing to not see that kind of tourist-driven retail brought to this area, hopefully Cabela's will be able to put that land back on the market, and the city can move forward in trying to promote that into some other kind of development," said Cheryl Morphew, executive director for the Johnson County Development Corp.
Cabela's announced Thursday that it would sell the property. But what it might get in return remains a question.
It paid about $180,000 an acre for the site, investing about $18 million, according to Langdon. In its announcement, Cabela's said it already wrote off $11.7 million on excess land.
"Right now there's not a market for 100 acres at $180,000 an acre," Langdon said, adding that OrthoIndy paid about $127,500 an acre in September.
Hotel developers also had taken notice. Value Place, Candlewood Suites and Hilton Garden Inn have opened near the Cabela's site; plans for a La Quinta farther south in Greenwood have stalled.
Greenwood City Councilman Bruce Armstrong still envisions big things for the site.
"I believe it will still be developed," he said. "While the economic conditions are such that immediate development is probably asking too much, there are many companies out there that could develop it and attract nearly as many customers."
Cabela's announcement came during the Nebraska-based retailer's otherwise rosy report on a second quarter that saw company revenue rise 4.4 percent.
The company already had built a 10-acre retention pond at the Greenwood site, as well as sections of sewer lines.
"They've invested in work there," said Ed Ferguson, Greenwood's planning director. "I'm guessing it's substantial."
Cabela's also had its own development agreements in place.
New Albany-based commercial real estate firm Lopp Properties inked a multimillion-dollar deal in January 2008 to develop the site, with possible tenants being a cinema, grocery store, fitness center, hotel, restaurants and retail stores. Valparaiso-based Splash Universe had plans to build a water resort next to the store.
Neither Lopp nor Splash Universe responded to telephone messages Thursday.
"It's surprising that (Cabela's) had already invested that amount of money in the land, and now they're looking to walk away," Armstrong said.
The city of Greenwood already approved an $18 million bond incentive in July 2007 that Cabela's would have paid back over 22 years using property tax revenue.
"It's interesting that even the $18 million in tax incentives they were being given were not enough to make them want to build in Greenwood," said Armstrong, who voted against the bonds.
As recently as last August, Cabela's brass had told city leaders the project would be delayed but expected it to open in 2010.
It originally had been projected to open by last fall.
The bad news came in February 2008, when the company said the project was on hold because of economic worries.
Those fears increased as the country spiraled into a recession, leading Cabela's to review land holdings and their potential.
"We have completed this review and have made the decision not to build a store in Greenwood," Tommy Millner, Cabela's CEO, said Thursday.
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