The Ottumwa Courier

Local News

July 19, 2011

City announces Kohl’s project

OTTUMWA — The city of Ottumwa announced Monday it is working with a developer to build a Kohl’s retail store located east of the intersection of Wildwood Drive and Highway 34.

For weeks, there has been speculation that Continental Properties, Inc., a retail site developer, wanted to establish a retail outlet in Ottumwa, but it wasn’t until Monday that city officials actually named Kohl’s as the interested company.

Continental Properties is proposing to invest more than $4 million to prepare the site and construct the 55,500 square foot retail store, according to a city press release. The new shopping center site will also contain a 2.5 acre outlot for future retail development.

City officials said Continental Properties will need to make significant improvements to the property to change it from its current agricultural use to a 10-acre big box retail store development. 

The Ottumwa City Council will consider entering into a development agreement for the project. A public hearing is tentatively planned for the council’s Aug. 2 regular meeting.  

The city of Ottumwa is offering a $2 million financial incentive for the project subject to the investment of more than $4 million between Continental Properties and Kohl’s.

In exchange for the city’s participation, significant site improvements will be completed by the developer to prepare the parcel for the Kohl’s retail store, city officials said Monday. The developer will construct the store and complete all on-site improvements, which includes the site preparation of the outlot for future retail development. Kohl’s indicated it will create a minimum of 25 new full-time equivalent jobs in the community.

According to the city press release and based on projected sales, the city of Ottumwa would receive an estimated $64,000 per year in additional local option sales tax from the development; Wapello County would receive an estimated $29,000 per year in new local option sales tax revenue.

County officials, however, have expressed concern about the proposal.

Supervisor Steve Siegel told the Courier last week that city leaders want to change the current TIF in order to make the development happen.

“The bottom line is the council is acting on their own, but when it’s out in the county, they have to consult [the supervisors] about it,” Siegel said.

The city wants to give the company $2 million up front, and they plan to get it back from tax increment financing (TIF) over 20 years, Siegel said. And, the city will spend “another several hundred thousand dollars on street work and dirt work.

“They’re bribing the company to come here, and [the company] is a competitor to Herberger’s and J.C. Penney’s,” Siegel said. “The city will give the company $2.1 million to build a store, and the city will bond for it at 100 percent.”

There’s no indication when construction might start or when the retail outlet would be open.

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