Cabelas is a dead deal
The proposed development of a major retail center off I-96 in Walker that was to be anchored by a Cabela’s store appears to be officially dead — apparently due to the ravages of the recession — after years of waiting for the sporting goods retailer to commit to opening there.
Zachary J. Bossenbroek, a Grandville attorney and spokesman for the developers, Walker Orchard Land Partners, said the developers are “not involved any longer” and that the property they once owned is apparently going to be sold by its new owner, which he said he believes is Chemical Bank. He said the changes took place last fall but declined to comment further.
An executive at Colliers International in Grand Rapids said one of its agents, Earl K. Clements, is going to market the property for Chemical Bank.
When asked when the property would be listed, Clements told the Business Journal by email that he could not comment and deferred to Joel Rahn, a senior vice president at Chemical Bank. Rahn and a Chemical Bank official in Midland did not return calls from the Business Journal.
Walker city officials gave their initial approval to preliminary plans for a 302-acre development in 2006, based on the premise that a Cabela’s store would make the site a tourist destination and generate other retail activity along with new restaurants and possible hotels. It was seen as an economic boon for Walker, although some residents and city officials had expressed opposition to a conventional mall with “big box” stores. Initials plans worked out with the city depicted a “pedestrian friendly” development.
Frank Wash of the Walker Planning Department said city officials had approved the preliminary site plans and rezoned the property from agricultural to commercial.
“We were at the point of final site plan review when everything came to a stop,” said Wash. Then Walker Orchard Land Partners requested and received an extension on the permits process deadlines in 2008, and again in 2009.
“We have not heard from (Walker Orchard Land Partners) in a little over two years,” said Walker City Manager Cathy VanderMeulen. She said the failure of the developers’ plans was “unfortunate, but the economy and subsequent slowdown in the retail end really hit them.”
John Castillo, a spokesperson for Cabela’s in Nebraska, said last week that the company “substantially backed off on our retail expansion” when the recession set in, and had opened only one new store a year recently. This year, however, Cabela’s is opening three: one each in Texas and Oregon, and late in the year, one in Edmonton, Alberta.
Cabela’s plans to open stores next year in Kansas and western Canada, according to Castillo.
“The pace of retail expansion has picked up after the economic downturn of the last several years. However, there are no plans I am aware of for a Cabela’s in Walker, Michigan,” he added.
“It’s too bad; it was such an exciting project,” said Walker Mayor Rob VerHeulen. “I liked the aspect about it that we were collaborating with the city of Wyoming, sort of creative financing.”
He was referring to the PA425 agreement between Walker and Wyoming, which is a “core city” and can tap into tax incentive financing on redevelopment of former brownfield sites. The Walker land that Wyoming would have been taxing under the 425 agreement includes former apple orchard sites allegedly contaminated by trace amounts of pesticides.
“The economy turned right at the wrong time for the developer and the development — one of those unfortunate things,” said VerHeulen. “We’ll just have to wait and see what comes out of it because I’m sure the bank doesn’t want to hold it forever,” he said, noting that it is a big chunk of property.
Walker City Assessor Kelly Smith said her records indicate that 15 parcels previously owned by Walker Orchard Land Partners were foreclosed on last October and became the property of Byron Acquisition LLC. She said it appears three other parcels may still be owned by Walker Orchard Land Partners, although county records indicate that some of the developer’s parcels were transferred by sheriff’s deed to Byron Acquisition and recorded as recently as mid-March.
Byron Acquisition was set up by Byron Bank last year, just days before Chemical Bank acquired OAK Financial Inc., Byron Bank’s parent company.
Jon Chism, an audit partner at Plante & Moran in Grand Rapids who is familiar with the Walker Orchard Land Partners project, said he understood the loan that was foreclosed on was for about $10 million.
“Apparently, at least at the time of acquisition (of the parcels of land), the developer thought he had a deal” with Cabela’s, said Chism. “As I understand it, they put up quite a bit of money up front, so it wasn’t quite as speculative as it sounds.”
In July 2007, Michael Callahan, a senior executive at Cabela’s, sent a letter to VerHeulen, assuring the city of Walker that “Cabela’s has been working diligently with the Bossenbroek Group to find a way to structure a deal that works for everyone.” He also indicated that it was possible “we could potentially be under construction early next spring.”
Later that year, however, Castillo was noncommittal when asked about progress by the Business Journal.
“The story about the Cabela’s coming in there was hot news for quite a while. We all thought, ‘Wow, this is a great deal. You don’t have to drive over to (the Cabela’s in) Dundee anymore,” said Chism.
He noted it is a big tract of land to find a buyer for, and foreclosed properties are sometimes a “real challenge” for the banks to sell, because there’s a hype associated with foreclosed properties supposedly selling at deep discounts.