In a matter of weeks two of the most well-known big-box retailers in the United States chose Cedar Park as a site for new stores. Bentonville, Ark.–based Wal-Mart announced plans in early December to open a Supercenter at the corner of RM 1431 and Ronald Reagan Boulevard, and on Dec. 9, wholesaler Costco announced plans to build a store in the Town Center development located at RM 1431 and Toll 183A.
"This area has certainly weathered better than other parts of the country. I think that lots of the larger retailers are starting to focus on [the better-faring] areas because they want to get in and take advantage of the momentum. When the economy finally starts to hit on all cylinders again, they want to be positioned," said Phil Brewer, Cedar Park's economic development specialist.
Big-box development begets more development
Cedar Park Chamber of Commerce President Harold Dean said he is happy about the two developments and thinks they will have a positive impact.
"We're pleased they're coming to create jobs and create tax revenues for the city. So, all in all, it's a good thing," Dean said.
Wal-Mart already has a store in Cedar Park at Walton's Way and Bell Boulevard. Brewer said the new store will be able to generate more sales tax without taking a bite out of revenues at the other location because it will serve new areas of growth in eastern parts of the city, as well as surrounding areas in Round Rock and Avery Ranch.
About half of the merchandise Costco sells is nontaxable, but even that is enough to generate a sizable amount of sales tax revenue for the City of Cedar Park.
"If you look at the average sales of a Costco, their average annual sales are about $130 million. So, if you say just 50 percent is taxable, $65 million is still taxable. At 2 cents [sales tax], that's a nice revenue stream for the city and then you add on the property tax to that," Brewer said.
Tim Redwine, owner of Austin Floor Store on RM 1431 near the future site of Costco, said he thinks it will draw traffic to the area and be a positive force for Cedar Park businesses.
"More people will come out here and see the store," George Poe said, owner of Cedar Park Jewelry. His store, located at 601 E. Whitestone Blvd., Ste. 112, is near the future site of Costco. "Since I advertise everywhere, people will see the store, and then they will know where we are."
Another effect the two big boxes will have on the area is that these developments beget more development. Brewer said because of that, those retailers are referred to as "bell cows" in the economic development industry.
"They tend to generate a lot more in an indirect manner than just what the direct impact that a big box has because of all of the smaller retailers that tend to follow and locate adjacent to them," Brewer said.
Big boxes to come
Wal-Mart will build a 150,000-square-foot Supercenter that will be staffed with 300 employees. Brewer said he had been in contact with a representative for several years, and he knew Cedar Park was on Wal-Mart's radar, but the retailer never sent anyone through City Hall. Sometimes larger retail companies do not require much courtship from cities to come to town.
"They're going to look at within a certain radius how many people there are, what the median income is in that area and things of that nature to determine whether or not it would be viable with them," said Jesse Tron, a representative for the International Council of Shopping Centers. "They would also take into consideration the site, center or property they're looking at, how easily accessible it is and other factors as well."
Sometimes, however, a city spends years meeting with large retailers before a project gets off the ground. Brewer said Cedar Park had been meeting with Costco for four years before the deal to build a store in Town Center was solidified. He said at first, Costco had been concerned that locating a store in Cedar Park would cannibalize the location near the Arboretum on US 183.
"By them coming up this way, I think once again, it shows that our market has grown enough in WilCo to support that Costco and not have a very negative impact on their US 183 store in Austin," Brewer said.
Costco will build a 150,000-square-foot store in the Town Center development and staff 300 to 400 full- and part-time employees. The store will have a four-island fueling station, in addition to the wholesale-priced groceries, electronics, clothing and household goods available to its members, who pay an annual membership fee.
"We think that it's a great Costco customer base up there. We look for high-end members, and you've got solid incomes in the Cedar Park area," said Dave Messner, Costco vice president of real estate.
City involvement?
Wal-Mart has not announced a projected completion date for its new Cedar Park store. It announced it will open stores in Manor and Elgin in early fall 2013 and late summer 2013, respectively. Brewer said Costco and the city are meeting to determine what kind of economic incentive package the city would be willing to offer.
"We've been asked to help out on that project. We're running some models right now to see what the level of participation that could possibly be offered on that project," Brewer said.
Correction: Edited to change the word "western" to "eastern" in the fifth paragraph.
