Wolf Ranch brings retail stores, sales tax revenue to the city
Wolf Ranch brings retail stores, sales tax revenue to the city
By Suzanne Haberman Thursday, 03 December 2009
GEORGETOWN — Before Wolf Ranch Town Center opened in Georgetown four years ago, the city lost about half the potential sales tax revenue to surrounding communities.
“We were experiencing a great deal of sales tax leakage, meaning that people here really had to go elsewhere for goods, services and entertainment,” Georgetown City Manager Paul Brandenburg said. “That meant that the sales tax dollars were being spent in Round Rock and even farther into Austin.”
A retail trade area analysis by the Capital Area Council of Governments found that Georgetown had $1 billion of annual retail demand, but only half of the supply, said Mark Thomas, Georgetown economic development director.
“Therefore, we had $500 million worth of retail purchases outside the area and, along with that, the corresponding loss of sales tax revenues that would go outside the area,” he said.
A need fulfilled
Wolf Ranch’s opening in 2005 gave Georgetown residents access to more than 60 stores and restaurants at the open-air center located near IH 35 and Hwy. 29. The city benefited because it receives more than $1 million of sales tax from Wolf Ranch annually, said Micki Rundell, Georgetown director of finance.
The opening also created approximately 1,000 new jobs and led to road improvements around the center.
“Really, it was more than just the retail,” Brandenburg said. “There were all these other components that made [Wolf Ranch] a really good deal for the city.”
Infrastructure improvements included widening Hwy. 29, building the southbound IH 35 frontage road and constructing Wolf Ranch Parkway. The city also installed water and wastewater lines west of the interstate that prepared the city for future growth, Brandenburg said.
Ambience
Mall owner Simon Property Group Inc. presented renderings of a mall that filled the community’s need for retail and attempted to complement Georgetown. The design preserved oak trees, created two nature walks and incorporated public art.
“One of the challenges and advantages that we bring to a project is trying to make it fit snugly in its space,” Simon Property Group spokesman Les Morris said. “It was important for us to capture the sense of place that is so important to Central Texas.”
The prime location for a mall was beneficial to Simon as well, Rundell said.
“It’s the county seat, it’s got a great town Square, a great sense of place, highly educated residents, consumers, fabulous quality of life, good highway location for us there right off of IH 35, and key distance from other restaurants and retailers,” Morris said.
Development agreement
The location may have been prime, but the topography of the land, with a steep slope extending southwest from IH 35 and the rocky soil, made construction challenging.
“It wasn’t an easy site to develop to begin with, so that was Simon’s concern with their development and why they came for incentives to begin with—to help manage those costs,” Rundell said.
To help expedite construction the city and Simon settled on a development agreement.
“It was a complicated deal, and it was really the first one of this magnitude for the city,” Brandenburg said.
Part of the agreement allowed the city to give Simon a total of $29 million in incentives through bonds and sales tax rebates for off- and on-site improvements. However, the agreement included safeguards to protect Georgetown from bearing the financial burden if sales tax revenue was insufficient, which became apparent it would be after the first year, Rundell said.
The situation was compounded by the national recession.
“We’re going through the middle of a recession, and the national retail chains are being hit very hard outside of our area,” Thomas said, citing the closing of Village Inn restaurant and Linens ’n Things as examples. “All of those [big] names are connected with one location here that was probably doing just fine, but was pulled down by all the other locations across the country.”
The city had to reclaim the funds to pay off bonds used for transportation projects.
“Even though the deal hasn’t been exactly the way they thought it would be, they’ve been very good about honoring their obligations to the city and the community,” Rundell said.
Morris declined to comment on financial issues specific to Wolf Ranch.
Future
The partnership between Wolf Ranch and the City of Georgetown could allow both to take advantage of a potentially vibrant economy in the future, Thomas said. Wolf Ranch is poised to become a hub for retail.
“As the economy rebounds, I see brighter times ahead,” Morris said. “It will be a center that we built for the long term, and it’s an asset that we are really proud of and are very interested in growing and making it better.”
Wolf family ranch
Rancher and investor Jay Wolf purchased the 103 acres that would become Wolf Ranch Town Center in the early 1950s. He opened a service station on the land near the intersection of IH 35 and Hwy. 29. Wolf died in 1996, and his family inherited the land. Wolf’s family sold the property to Simon Property Group Inc. for a reported $27 million, a business move his oldest daughter said would have made her father proud.
Source: “Road, River, and Ol’ Boy Politics” by Linda Scarbrough
