Tulsa City Council will vote Wednesday on a $2.5 million incentive package to renovate the former Belk at the Tulsa Hills Shopping Center store into the city — and state’s — first IKEA store.
District 2 Councilor Anthony Archie, who represents the Tulsa Hills area, told The Eagle a rejection of the incentive package would be an unlikely scenario. So far, each councilor has expressed support for the economic impact an IKEA would have on Tulsa.
“Economic development is a contact sport, and we are competing with cities that are our size, or cities that are larger than us, for great amenities,” Archie said. “It’s important that when you’re competing, you come to the table with a deal that makes sense for residents, but also encourages business owners to want to make an investment.”
Archie said the funds for the incentive package will come directly from repaid loans that were part of a 2016 Vision Tulsa Bond package. IKEA originally asked for $4 million, but the city had $2.5 million available in a revolving loan fund. The Swedish retailer accepted the offer.
Tulsa officials project the store will have an indirect impact of $100 million and generate between $30 and $40 million in annual sales revenue. With the city operating on a 3.65% sales tax rate, that figure would garner over $1 million in annual taxes.
Belk produced $3 million per year in sales, which was a little over $100,000 in sales tax for the city.
“We (Tulsa) run basically on sales tax,” Archie said. “The roads, the streets, the bridges, the water purification, police, fire, all of those things happen because, because (of) small businesses, big businesses.”
A global brand also means more traffic in an area where Tulsans already experience heavy congestion, especially near the intersection of 81st Street and South Olympia Avenue.
The long-term plan to address traffic, Archie said, is to widen the Highway 75 bridge and 81st Street and implement a diverging diamond interchange. That project is set to begin construction in the fall, according to the Oklahoma Department of Transportation.
In the short term, Archie encouraged residents to drive south of Maybelle Avenue through Main Street and Jenks or take 81st Street to South Elwood Avenue.
IKEA construction will begin in April, with the store expected to open in November before the holiday season. The 51,000-square-foot space will feature some 3,000 items and 200 small furniture options.
Ismael Lele is a Report for America corps member and writes about business in Tulsa for The Oklahoma Eagle. Your donation to match our Report for America grant helps keep him writing stories like this one; please consider making a tax-deductible gift of any amount today by visiting this link.
