Wednesday, November 9, 2011
The Colony to boast $1.5 billion mega-retail outlet
The new location of Nebraska Furniture Mart will dwarf the IKEA in Frisco.
Speculation has been rampant in recent days about what exactly is being built in The Colony to the tune of $1.5 billion.
The answer? What might possibly be the world's biggest single-use retail store. Namely, Nebraska Furniture Mart, a company owned by Warren Buffett's Berkshire Hathaway.
The development, located on 433 acres roughly south of State Highway 121, east of Plano Parkway and west of Spring Creek Parkway, will feature two stories and a footprint of approximately 1 million square feet, equating to 2 million square feet of structure – or approximately 53 football fields.
The building will include 1.28 million square feet for warehouse and distribution uses, about 25,000 square feet for regional corporate headquarters and about 546,000 square feet for retail sales.
By comparison, Frisco's IKEA is 310,000 square feet.
The Colony City Manager Troy Powell said the project will bring thousands of jobs to the region and generate an estimated $2.3 billion in economic impact when Phase I is completed in about May 2015.
Construction could begin as early as March or April 2012, said Tod Maurina, the city's executive director of operations.
Many steps remain between now and then. The Colony City Council must first form a Tax Increment Reinvestment Zone for the development and a Local Development Corp. board to manage the zone. Powell said the city will always have majority representation on the board.
After establishing the tax zone, the council must finalize the tax structure and other particulars of the deal with Berkshire Hathaway, which is scheduled for action at next Tuesday's regular city council meeting.
Details of the development agreement are not yet available pending approval by the city council. The city also plans to run the agreement through the Attorney General's Office in Austin for a "validation" process that could take up to a month and a half.
However, the agreement is only between the city and Berkshire Hathaway, which will manage all negotiations with future tenants on the property. Nebraska Furniture Mart will be the anchor store for a mixed-use retail development comprised of what are being described as "unique retail opportunities" such as themed restaurants and other entertainment venues.
Nebraska Furniture Mart itself is expected to draw up to 8 million visitors annually after Phase I is completed, said The Colony Communications Director Diane Baxter. She said the company's Omaha, Neb., location draws visitors from all over the country, and that The Colony would expect the same to happen here, furthering the city's goal of becoming a "destination city."
By the time the store is complete, Maurina said it could generate from $600 million to $800 million in sales annually, for about 20 percent of the local market share.
That volume of sales would naturally generate significant amounts of vehicular traffic. Maurina said the site would feature a state-of-the-art traffic-control system similar to what's in place at Cowboys Stadium in Arlington. Technicians would have access to the surrounding traffic lights and be able to facilitate traffic flow during peak shopping hours or special events.
In addition, projects to widen Plano Parkway and to extend Memorial Drive east of The Colony to connect with Spring Creek already are under way.
The site is comprised of three tracts of land, the largest of which was famously owned for years by the Mahrarishi Group. All tracts are currently under contract for purchase by the developer, Maurina said.
"This is the most significant piece of undeveloped land in The Colony," Powell said. "We want to put it to the best and highest purpose."
Powell said the agreement is about building a long-term relationship with Berkshire Hathaway and the many companies under Buffett's umbrella. To illustrate their confidence in the long-term, Maurina said the development should be economically "viable" for 75 to 100 years.
Powell said any debt the city incurs helping develop the land will be backed up by the developer. The agreement also includes incentives for the developer ensuring points on the timeline are met, such as the number of jobs created. Should those incentives not be met, the developer will pay financial penalties, Maurina said, adding that most agreements only include the deadlines but without the penalties.
Nebraska Furniture Mart is headquartered in Omaha, Neb., and sells furniture, appliances, home décor, and electronics, among other products.
Maurina said the Omaha location annually sells an amount of electronics equivalent to five Best Buy stores.
For information on Nebraska Furniture Mart, go to www.nfm.com.
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