In a move that deviates from the norm with new development projects, Springfield City Utilities footed the bill for part of the cost of running utilities to a mega gas station and convenience store.
City Utilities Chief Economic Development Officer Dean Thompson explained the move to pay for a dig under four lanes of interstate highway to Buc-ee’s at a Board of Public Utilities meeting on Sept. 29. Thompson said northeast Springfield represents an area where growth is seen as crucial.
“The water main going across really opens up about 700 acres of development, and a potential other 200 acres of development on top of that,” Thompson said.
City Utilities is a publicly-owned utility that takes in its operating revenue through the sale of electricity, natural gas, broadband internet service and water to residential, commercial and industrial customers.
City Utilities’ policy is that developers generally pay to extend utility lines to their development in the event that utilities are not available already. Running utility lines under the highway without any development didn’t make financial sense.
“It didn’t cost-justify, it was just too much to get the bore across the interstate — $250,000 just for the bore,” Thompson said.
In this case, City Utilities made an exception in hopes that Buc-ee’s will spur additional development north of Interstate 44.
“This one is a little unusual because we paid for the bore, because it opens up a strategic area, and so now they can start building off of that,” Thompson said. “It’s more of an economic development project than a typical fuel station that you’ll get on your corner block.”
Strategic boring
Boring a space for utility lines under an active interstate highway brings additional expenses because of the engineering concerns and oversight that happens before the dig.
“Getting across I-44 is always expensive if you have to bore for water, natural gas, anything that you have to do for electric,” Thompson said. “For us to just go across an interstate — you really have to have an anchor to justify doing that.”
“It’s not just a gas station, it’s over 50,000 square feet,” Thompson said. “If you think about one acre, it’s 43,560 feet in an acre, and so just their building alone is over an acre under roof.”
According to its 2021 strategic plan, City Utilities covers a territory of 320 square miles that includes Springfield and parts of Greene County. Its first of four recommended growth strategies, as specified in the plan, is to “seek opportunities to expand services in the region.”
The $250,000 cost to bore under I-44 is about 0.26 percent of a $96 million capital improvement budget that the Springfield Board of Public Utilities set for 2022. Buc-ee’s will be on all five of the utility services in the CU portfolio.
“Buc-ee’s has all of our utility businesses from the city: [electric], sewer, water, natural gas, broadband for SpringNet, so we have all five services that are across the interstate at Buc-ee’s and there are already other developments looking at it,” Thompson said.
If additional commercial or industrial development happens on the acreage surrounding Buc-ee’s, City Utilities will eventually have to run more lines under I-44 in the future, Thompson said.
According to documentation for the Springfield City Council’s preparation of the 2023 fiscal budget, Buc-ee’s is expected to bring in about 6 million customers per year and generate $30 million in taxable non-fuel retail sales. If Buc-ee’s delivers on its claim of $30 million in revenue in a year, it will generate around $2.4 million total in sales tax, of which about $639,000 would normally go to the city of Springfield, and $525,000 would go to Greene County.
Much of the land that surrounds the Buc-ee’s property on the north side of I-44 falls under ownership of the Childress Family Limited Partnership, according to records available through the Greene County Assessor’s Office property search. The Jerry M. Tolbert trust owns the 28 acres of land immediately east of the Buc-ee’s property. Private owners own five residential lots just north of the Buc-ee’s property on the south side of Farm Road 104.
Other incentives for Buc-ee’s to build
Buc-ee’s customers will pay an extra 0.625 cents for every dollar you spend on beaver nuggets, brisket sandwiches and beaver-branded apparel and accessories as part of a community improvement district (CID) tax imposed through an agreement between Buc-ee’s and the city of Springfield.
In June, the Springfield City Council voted to pass a law allowing an economic development incentive for Buc-ee’s to build a mega gas station and store in northeastern Springfield on Mulroy Road off I-44. The bill allowing the additional tax incentive passed by an 8-0 vote. The agreement from the June 13 council vote brings Buc-ee’s up to $9.2 million in local tax incentives tied to the store that promotes beaver-branded everything in a family atmosphere.
A community improvement district (CID) is a taxing designation outlined in Missouri law and used in Springfield to offset some of the cost of developing Buc-ee’s. The CID adds $5.1 million to Buc-ee’s previously approved $4.1 million tax increment financing agreement the Springfield City Council enacted Jan. 24.
Buc-ee’s store No. 62 projects to have 100 fuel pumps, food service, groceries, souvenirs and other goods for sale.
Buc-ee’s developers told Springfield city staffers that the store will employ 175 workers, and also has the potential to open up about 400 acres of neighboring farm land for purchase and development. The Buc-ee’s company expects to spend $56 million to build its store and gas pumps in Springfield, with a target completion date in the summer of 2023.
