Agenda Date: 09/15/2026
Subject:
Title
Resolution 63-2026: Approving an Economic Partnership Incentive Agreement between the City of Littleton, RIG Mineral LLC and Scheels All Sports, Inc
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Rachel King, Economic Development Director |
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Presentations: |
Rachel King, Economic Development Director |
PURPOSE:
To consider approval of an economic partnership incentive agreement (“Agreement”) between the City of Littleton, RIG Mineral LLC (“Developer”) and Scheels All Sports, Inc. (“Applicant” or “Scheels”), a proposed retail store project located in the Mineral Place development site located at 700 West Mineral Avenue (“Project”).
LONG-TERM OUTCOME(S) SERVED:
Vibrant Community with Rich Culture; Robust and Resilient Economy
DISCUSSION:
The City is in a fortunate position to consider a proposed economic partnership incentive agreement (“Agreement”) to locate a national retailer of outdoor sports-oriented goods at the Mineral Place development. The Applicant, Scheels, is a highly desirable retail destination that produces a high sales volume and creates significant sales tax revenue and brings hundreds of jobs to each location they operate. Further and equally important, their brand values make them a strong community partner, operating as a 100% employee-owned company, and often holding community events and fundraisers in the communities where they operate. As a result, new locations are coveted, competitive and often result in municipalities competing with incentive packages to be the next chosen location.
Staff was informed that in July, the Scheels Board of Directors approved the Mineral Place development site in Littleton for its next new store location, besting several other potential U.S. locations. Based on available industry data and revenue projections provided by Scheels, staff believes approval of an incentive agreement for this Project would result in a substantially positive net fiscal impact on the city and provide new jobs, amenities, and community investment for residents. Should Council approve the Agreement for this Project, the Littleton Scheels is anticipated to start construction in the first quarter of 2027 and open to the public in the first quarter of 2029. Without an approved Agreement, the Project will not be realized.
This Agreement poses no risk to the City, as there are no up-front funds being provided to the Applicant. As proposed, sales taxes will be collected from the retailer as would normally occur; thereafter, a reimbursement, or “share-back” of 54.67% of the collected sales taxes will be provided to the Applicant on a recurring basis for 30 years. A second share-back of 5.33% of the collected sales taxes will be provided to the Developer for a term not to exceed $25 million. The city retains 40% of the sales tax overall, shifting to 45.33% when the term expires with the Developer and then shifting to 100% in 30 years.
BACKGROUND:
Economic Development staff received an application from Scheels, represented by Trevor Klein, Chief Operating Officer for Scheels, requesting an economic partnership incentive Agreement in accordance with the city’s Economic Partnership Incentive Policy (“Policy”). The request for an Agreement is substantially justified in the written narrative provided by the Applicant detailing the substantial capital investment, job creation, sales tax generation, and community benefits that will be realized as a result of the Project.
Concurrent with the request from Scheels is a request from the Developer to request an Agreement for a 5.33% share back of collected sales tax that is produced from the Scheels retail store. Concurrent and separate from this Agreement request is a proposed amendment to the original RIG Mineral LLC Agreement for the Mineral Place development, that reduces the maximum share back by $4.5 million dollars from $29,500,000 to $25,000,000 to compensate for the change in retail users, anticipating that Scheels will greatly outperform a home improvement retail store. The request for an Agreement is substantially justified as the Developer is to provide the land to the retailer at no cost and provide all site development costs including the parking lot and landscaping, at the cost of the Developer. Scheels is responsible for the cost to construct the building and assume all costs related to ongoing real estate taxes going forward. The estimated cost of the land and improvements is approximately a $20 million value which are not entirely covered by the current bonding for the development and will necessitate the Developer to reissue bonds (modify debt) when they are first able in 2029. As a result, the 5.33% share back is intended to recover the cost by the Developer to bring Scheels to Littleton.
Development Proposal Summary
Scheels is a 100% employee-owned, privately held sporting goods and entertainment retailer that operates through an Employee Stock Ownership Plan (ESOP) which rewards eligible associates with a financial stake in the business, supporting a culture focused on customer service and community engagement. They currently own and operate 35 stores in 16 states. Scheels' proposed Project in Littleton is a roughly 300,000 square foot store consisting of two levels on a 14.36-acre site adjacent to the Costco that is currently under construction. This retail anchor wholly replaces the home improvement anchor used as a placeholder for the original project modeling. The Mineral Place Scheels store will feature their newest architecture concept and include extensive parking and landscaping. Total construction costs for the store are likely to exceed $100 million and possibly approach $200 million representing a significant capital investment in Littleton. Infrastructure and utilities are substantially complete making the site development ready.
According to the Retail & Mixed-Use Market Analysis (EPS 2023) “Littleton has a comparative disadvantage in the Shoppers’ Goods store category, generating sales 20.5 percent below the state average, and General Merchandise, at 17.8 percent below the state.” Sporting goods, clothing and accessories, hobby, home furnishings and miscellaneous goods are all categorized as Shoppers Goods and/or General Merchandise and comprise the majority of goods sold at Scheels stores. Additionally, “Leakage for General Merchandise (department stores, supercenters, etc.) purchases are estimated at 100 percent leakage given that Littleton does not have any existing stores in those categories” according to the Market Analysis. As there is no Scheels currently in Littleton, and no large sporting goods retailers currently in Littleton, there will be negligible cannibalization of existing Littleton stores because of this Project.
According to the Applicant, the Littleton Scheels will employ approximately 550+ store associates, 200+ of which are full-time positions.
Beyond impressive revenue and job generation numbers, Scheels is also a strong community partner, offering community and philanthropic benefits to communities in which they are located. According to Trevor Klein, “Scheels is focused on developing strong relationships with the communities in which its stores operate. Its ongoing commitment to local events, fundraising, outdoor recreation, charitable activities, and community partnerships further demonstrates that its investment extends beyond the physical store.” Community programs such as the "Helping Hands" program empower individual store associates to volunteer their time, pitch in on local projects such as school supply drives or food banks or lead random acts of kindness for people in need. Scheels also has local giving campaigns where individual store locations frequently host seasonal giving campaigns (such as holiday voting drives or Colorado Gives Day contributions) where local non-profits receive direct financial support. Scheels also donates a significant portion (over 4%) of its annual profits back to local communities through their profit-sharing program.
Economic Partnership Incentive Key Points
The Agreement is a sales tax-sharing structure whereby:
54.67% is returned to Scheels for 30 years;
5.33% is returned to RIG with a cap of $25 million; and
40% is retained by the city until the RIG cap is realized and shifts to 45.33% thereafter.
As part of the comprehensive offer to incentivize Scheels to locate in Littleton, the Developer will be preparing and delivering the 14.36-acre site at no cost to Scheels and constructing the site improvements consisting of the parking, landscaping and sidewalks. As a result, the 5.33% RIG sales tax share back is a mechanism to recover the site and development cost. In any other arrangement with a prospective site user, the land would be sold at market value to the buyer, which is estimated to be approximately $20 per square foot, or about $12,500,000 for the land in addition to the aforementioned site improvements. Site preparation costs to deliver the improved site with utilities connected bring the total site cost to nearly $25 million. The sales tax sharing scenario outlined above will be in effect for 30 years beginning with the first sales tax remittance from Scheels to the city.
While the proposed development project is currently speculative, the project is anticipated to generate significant revenues to the City, including sales tax, property tax, general revenues, use tax, development and impact fees, as well as other taxes realized by Arapahoe County.
Prior Actions or Discussions
Resolution 103-2024: Approving an Economic Partnership Incentive Agreement with RIG Mineral LLC regarding Mineral Place.
FISCAL IMPACTS:
Analysis by Economic Development Staff
Staff evaluated the proposal to validate the information provided and provide assumptions based on the recent Mineral Place economic data analysis to provide an objective recommendation. The same data-driven economic impact analysis approach that was used by EPS for the Mineral Place development was utilized to focus on net new revenues minus the expenditures to determine the net fiscal impact and validate the proposed incentive request.
Revenues
Scheels' overall business has grown significantly with expansion of stores nationwide and correspondingly, rapidly increasing sales activity and revenue generation. Scheels is a privately held company, so it does not publish financial statements. However, the Scheels team did provide estimates for sales volume projections for the Littleton location. In addition, staff reviewed industry estimates for market comps on other retailers at the next available tier, as well as other projected city revenues based upon estimated project assumptions.
If staff uses an annual sales revenue of roughly $135,000,000/year (the first year operating for 3 quarters), and an estimated capital expenditure of $200,000,000, approximate estimates for city revenues include:
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Annual sales tax (with incentive applied) - first full year |
$1,798,500 |
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Annual sales tax in year 10 - assuming a 4-6% annual revenue growth rate |
$3,048,277 |
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Annual property tax - year 1 |
$106,250 |
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Use tax (one-time) |
$3,937,500 |
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Development fees |
$2,753,000 |
As an alternative, if the Mineral Place development does not include Scheels, the land use would likely revert to another general merchandise retailer. Other available retail comps based on industry data show a store in that category might generate, on average, $40,000,000. Sales tax revenues for a store in that category without a sales tax share-back arrangement would equal roughly $1,500,000 annually. Also important to consider is how much revenue of any incoming retailer is attributed to grocery sales, which are not subject to Littleton’s sales tax, as well as any cannibalization effects a retailer would have on other businesses in Littleton which might result in a lower net new revenue amount.
Expenditures
According to EPS, the model has been calibrated to show departmental expenditures ranging from 25 to 100 percent variable. Departments with a lower variability factor imply relatively fixed expenditures, such as the City Council, while departments with high variability need additional support to accommodate growth, such as Public Works or the Police Department. Based on these assumptions, the corresponding City factor for general expenditures equates to $27.64 per service demand hour. Mineral Place is anticipated to increase the burden on City services, with expenditures ranging from $587,449 in 2027 to $772,848 in 2036.
Net Fiscal Impact
The Mineral Place development, without Scheels, is anticipated to generate significant taxable sales of approximately $197,000,000 in year 1 (2027). Once the project reaches the $25.0M threshold (projected for 2032), the revenues to the city increase considerably from $3.2M in 2032 to $7.9M in 2033.
When these revenues are netted against expenditures, the net fiscal impact ranges from a positive $2.3M (2027) to a positive $2.6M (2032), with a jump in revenues starting in 2033 of $7.3M, which is expected to continue with a gradual escalation into the foreseeable future.
Adding Scheels to the development is expected to result in additional taxable sales of $110 million in year 1 (opening April 2029) to $135 million in their first full year (2030), and over $200 million in year 10 (2039).
The net fiscal impact of the Mineral Place development with Scheels could generate $4,300,000 to the city in year 3 (2029) to $10,800,000 in year 10 (2039) in net new sales taxes. These estimates account for the cost of city services with a commensurate share of the estimated expenditure rate as reported by EPS for the Mineral Place development overall.
In the unlikely event the applicant fails to perform, there is no General Fund expenditure associated with this request and a quality development like this is anticipated to catalyze further interest in private investment in the area. Additionally, the Project is likely to induce demand for lodging and tourism related activities in the area which will help attract additional hotels to Littleton and generate additional lodging tax for the city to support the arts and culture industry as was identified in the recently adopted Arts & Culture Economic Impact Report (BBC 2026).
POLICY CRITERIA
Economic Partnership Incentive Policy
• Program: Retail Development Incentive Program
• Incentive: Retail Sales Tax Reimbursement
Comprehensive Economic Development Strategy (CEDS)
• Strategic Pillar 1: Business Vitality and Adaptability
• Strategic Pillar 3: Fostering a Livable Economy
• Strategic Pillar 6: Regional Economic Positioning
Horizon 2027 Strategic Plan and Council Initiatives
Outcomes
• Robust and Resilient Economy
• Vibrant Community with Rich Culture
2 - 3 Year Initiatives
• 14. Increase awareness of local spending benefits for Littleton residents and attract new shoppers to Littleton.
• 15. Create and implement a plan to market Littleton’s unique character and increase tourism, sales tax revenue, and support Littleton businesses.
Comprehensive Plan - Economy & Tax Base
• Policy E&T: 2, 3, 4, 6, 8
Arts & Culture Economic Impact Report
• 1.4.2. Lodging Tax and the role of the ACB. The primary dedicated funding mechanism for the arts and culture sector is a five percent voter-approved lodging tax levied on hotels, motels, and short-term rentals.
Arts & Culture Community Strategic Plan
• 5-4. Leverage Littleton’s vibrancy within the greater Denver metropolitan area
STAFF RECOMMENDATION:
Staff recommends entering into an Economic Partnership Incentive Agreement with the Applicant as proposed.
ALTERNATIVES:
Do not enter into an Economic Partnership Incentive Agreement
PROPOSED MOTION:
Proposed Motion
I move to approve Resolution 63-2026 approving an Economic Partnership Incentive Agreement between the City of Littleton, RIG Mineral LLC and Scheels All Sports, Inc.