A $16.2 million incentive proposed for retailer Scheels All Sports is expected to receive a final OK from the Colorado Springs City Council, despite one councilman who continues to question the deal.

On Tuesday, the council is scheduled to consider creation of an incentive for qualified businesses such as Scheels. The council gave that measure preliminary approval Feb. 12 on a 7-2 vote.

In a separate action, the council Tuesday will consider an agreement among Scheels, the city and a business improvement district set up by real estate company Nor’wood Development Group of Colorado Springs. That agreement spells out details of the Scheels incentive and will be reviewed at the council’s Monday workshop session.

The Monday and Tuesday meetings are at 1 p.m. at City Hall, 107 N. Nevada Ave.

Scheels plans to build a 220,000-square-foot store in Nor’wood’s InterQuest Marketplace retail complex, northeast of Interstate 25 and InterQuest Parkway. Scheels would start construction in the spring and open in early 2021. The retailer is popular for its outdoor apparel, sporting goods and other merchandise, but also offers family-friendly amenities such as an indoor Ferris wheel, aquarium and candy store.

In response to Councilman Bill Murray’s skepticism that 40 percent to 50 percent of Scheels customers will come to its Springs store from outside the area, the retailer sought to quell doubts about its projections.

Based on consumer traffic patterns at a store in Fargo, N.D., the retailer’s corporate headquarters, Scheels estimates “over 50 percent of all special orders, and likely all sales” occur as a result of customers who come from outside 10 local ZIP codes.

In Johnstown, north of Denver, Scheels says more than 60 percent of special orders and sales come from customers who travel from outside five ZIP codes closest to the store. Nearly 47 percent of purchases also are made by customers who come from outside 10 ZIP codes near Johnstown, the retailer said.

Michelle Killoran, Scheels chief financial officer, provided the information in letters last week to Bob Cope, the city’s economic development officer, who forwarded them to council members.

Murray, however, says Johnstown and Fargo are much smaller than the Springs and it’s no surprise large numbers of Scheels’ customers come from out of town in those markets. The Springs store also would be built in the busy InterQuest area that already attracts throngs of shoppers, he says.

City staffers have proposed allowing Scheels to substitute a public improvement fee in place of a portion of the city’s 2 percent sales tax, enabling the retailer to keep an estimated $16.2 million over 25 years from its projected sales of $60 million a year.

Staffers and some council members argue Scheels will build its store elsewhere without the incentive, while the city stands to reap $1.5 billion in economic activity over 25 years.

Business writer, Colorado Springs Gazette

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