June 25--Bass Pro Shops at The Pyramid topped $56 million in sales in its first year, city records show.
It's a far cry from a sales projection of $105 million a year anticipated before the 2011 bond issue for Pyramid renovations.
But city officials believe Bass Pro is meeting expectations and contributing to a healthy surplus in a fund set up to pay off project debt.
The sales struck one retail analyst as a bit low, although he said the store's abundance of non-retail spaces makes it difficult to draw comparisons with competitors like Cabela's.
"They've got the bowling alley, the shooting range, Ducks Unlimited, all the entertainment aspects inside the building," said Parrish Taylor, vice president of CBRE Memphis's retail group. "The number seems a little on the low side, but when you consider the entertainment aspect and folks just coming in to see it, it's hard to tell."
The Downtown outdoor goods superstore and tourist attraction had sales of $56,354,259 May 1, 2015 through April 30, 2016, according to monthly gross sales reports to city government, which owns the Pyramid, a 32-story former sports arena repurposed by the city of Memphis for Bass Pro.
The Springfield, Missouri-based retailer paid the city $1,125,623 in rent, 12.5 percent more than $1 million minimum rent required by a 55-year lease agreement.
Bass Pro Shops Outdoor World at the Pyramid opened on April 29, 2015, capping nearly a decade of planning and negotiation and driven by a direct city expenditure of at least $105 million. The former sports and entertainment arena, which opened in 1991, lost prime tenants the Memphis Grizzlies and University of Memphis Tigers basketball to the FedExForum in 2004.
By the anniversary this spring, the store had logged more than 3 million visitors.
"We continue to be thrilled with the Pyramid's ongoing success," Bass Pro spokesman Jack Wlezien said. "The real impact goes beyond foot traffic and sales. The Pyramid is a powerful expression of what we believe in as a company: creating fun, immersive experiences that inspire everyone to get out and celebrate the outdoors."
A review of Bass Pro's sales reports showed the store started strong last spring and summer and spiked again with holiday season shopping in December. Sales in May 2016 fell nearly 39 percent from a year earlier, reflecting the lack of a "honeymoon" effect, Taylor said.
"You're always going to drop in the 13th and 14th month (after opening), because that's after the honeymoon period," Taylor said.
Said Wlezien, "The grand opening last May was unprecedented with one million people visiting in the first 70 days. We don't compare this May with what we experienced at the grand opening."
Taylor said he expects Bass Pro is taking the store's performance in stride while seeking to improve.
"Bass Pro is a sophisticated retailer that is continually improving and refining the way they service their patrons," Taylor said. "Absolutely I think they're looking at this and saying, 'How do we make this even better than it already is?' I'm certain they don't consider this a failure in any way at all," Taylor said.
Bass Pro, a privately held company, has never made public its expectations for the Pyramid superstore. The company has declined to clarify exactly how many square feet of the 535,000-square-foot building are considered retail space, but numbers from 220,000 to 300,000 square feet have been cited.
Bass Pro Pyramid's sales number would handily beat publicly held Cabela's average. Market researchers at Stephens Inc. say the average Cabela's is 102,000 square feet and generates $34 million in sales.
A Downtown Memphis Commission-affiliated board, the Center City Revenue Finance Corp., issued $197 million in bonds in 2011 for tourism-related improvements including Bass Pro. About half went to the Pyramid, and the rest was for other purposes, including a city buyout of Shelby County's interest in the Memphis Cook Convention Center.
A supporting document for that bond issue said a 300,000-square-foot Bass Pro Shops could be expected to generate $350 a square foot in sales, or $105 million a year. The figure was calculated by RKG Associates Inc. of Alexandria, Virginia, a consultant hired by Memphis to analyze the proposed project.
The 2011 Pyramid and convention center debt is being paid by a state-established tourism development zone (TDZ) that covers most of Downtown Memphis. Within the TDZ, 7.75 percent in state and local sales taxes are earmarked to pay off the 2011 bonds.
City chief financial officer Brian Collins said the TDZ is generating more than enough income to make bond payments -- $20 million in receipts over $17 million in debt obligation last year -- and Bass Pro was expected to increase TDZ revenues by several million this year.
The TDZ's share of taxes on $56.3 million would exceed $4 million in new taxes.
"We are comfortably on track -- the existing TDZ revenue is covering debt service costs and then some," Collins said.
"As the Pinch development gains momentum, including projects associated with St. Jude, there will be further growth in TDZ revenue, coming from both the Pinch and Bass Pro," Collins said.
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