DENHAM SPRINGS — Public bonds sold to spur the Bass Pro Shops development apparently will be paid off years ahead of time, according to officials involved with the project.
In 2007, the Denham Springs Economic Development District sold $50 million in bonds to be paid in 30 years by a portion of the sales taxes from Bass Pro and other stores that built in the 75-acre district off Range Avenue near Interstate 12.
Payoff of the bonds is ahead of schedule because of income from new businesses that have opened in the district and because a conversion of the bonds has allowed the district to take advantage of lower interest rates, said L. Gordon King, president of Government Consultants of LA Inc., which has worked with the district.
During the past fiscal year, the 18 stores that have opened in the economic district had sales of about $50 million, according to Livingston Parish sales tax records.
With just those retailers collecting taxes, it appears the bonds will be paid off in 23 to 24 years, Denham Springs Mayor Jimmy Durbin said.
Durbin expects a much shorter payoff time than that, because Sam’s Club is building a new store next to Bass Pro, an outdoor and sporting goods equipment chain.
The average Sam’s Club produces sales tax revenue well above last year’s sales tax revenue generated by all the current businesses combined, Durbin said.
The opening of the Sam’s Club should reduce the time needed to pay off the bonds to 12 to 13 years, Durbin said.
“The entire debt could be paid in 2020 or 2021 instead of 2037,” Durbin said.
When the bonds are paid off, the amount of the district’s sales taxes going to Denham Springs, the Livingston Parish Sheriff’s Office, Livingston Parish School Board, Gravity Drainage District 1 and Livingston Parish Council automatically goes up, Durbin said.
About 72 percent of the 6 percent in local sales taxes collected in the Denham Springs Economic Development District goes to pay off the bonds.
Once the bonds are paid off, the entire amount will go to the taxing agencies, said Mike Curtis, who heads the parish sales tax collection program.
When asked about the impact of the economic development district on tax collections, Curtis said despite early questions on that issue, the result appears to have been good.
Taxing bodies have been able to enjoy 28 percent of the tax revenue from the new businesses, he said.
It’s difficult to determine the amount of sales some pre-existing businesses have lost because of Bass Pro and other businesses in the district, Curtis conceded.
But, Curtis said, he thinks the overall sales tax collections have been higher because of the Bass Pro development.
“I don’t think they are a drain,” Curtis said. “If anything they have been a catalyst” for increasing tax collections in the Denham Springs area.
Parish President Mike Grimmer said he thinks the project is bringing in greater tax proceeds for all of the taxing bodies that collect in the economic district.
Asked if the sales in the development district are simply taking money that would be spent elsewhere in the parish, Grimmer said he does not believe that is the case.
Of the customers at Bass Pro, 57 percent are from outside the parish, Grimmer said.
Those people from outside the parish spend money at Bass Pro and other businesses in the development that the visitors would not spend in Livingston Parish otherwise, the parish president said.
In addition, those people are spending money at gas stations; restaurants; hotels and other businesses because they are stopping in Livingston Parish to shop at Bass Pro, Grimmer said.
Bill Spear, superintendent of parish schools, said he thinks the economic benefits of the project have extended beyond the boundaries of the development district and that the project has added needed jobs for parish residents.
“I think all of the parties” that took part in the program are doing well, said Arthur Perkins, chairman of the Denham Springs Economic Development District.
Though the development may have reduced sales at some businesses that existed before the development, Perkins said he believes the development has been good for overall sales tax collections and for job creation in the area.
“The volume of sales (at stores in the development district) is really the thing that is helping us,” even if the usual taxing bodies are only reaping a portion of the tax, Perkins said.
It now appears the 30-year-bonds “will be paid off in half the time,” and then those taxing bodies will start getting 100 percent of the taxes from the businesses in the development he said.
The City Council, the Parish Council, the parish School Board, the Sheriff’s Office, Gravity Drainage District 1 and the state each agreed to give up a percentage of the sales taxes they would collect from businesses that open in the 75-acre project.
The idea of wooing Bass Pro by using public money to partially finance the project was introduced in 2003, but was in litigation from the summer of 2004 until late in 2007.
During that period the case made two trips to the Louisiana Supreme Court and was turned down by the court for a third hearing.
One of the state Supreme Court decisions resulted in local governments holding an election in which voters overwhelmingly supported rededicating portions of sales taxes within the district to fund the project.