Wal-Mart given green light Murl Miller, a Yankton attorney, presents information about the proposed Wal-Mart Supercenter. by David Lias A new 155,000 square foot Wal-Mart Supercenter could open in Vermillion as early as October 2006 after a unanimous vote by the city council paved the way for the development.
Aldermen approved a proposed three-way agreement involving Wal-Mart, the city and the Vermillion Area Chamber of Commerce and Development Company.
City Attorney James McCulloch said the document had changed at least six times as the three parties involved hammered out details of the agreement.
"It's changed quite a bit, evolving in the give and take of negotiations over the past two-and-a-half months," he said.
The agreement included three parts: a legal description of the property, a preliminary site plan, and a description of infrastructure and on-site improvements Wal-Mart will make on the property.
The Vermillion store will be located on 28 acres at the corner of Princeton Street and Highway 50. The 24-hour store will be about twice the size of the current Wal-Mart store in Yankton.
"Should Wal-Mart decide to exercise its purchase option on the property, it then has some deadlines to meet," McCulloch
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said. "The deadlines are significant in a couple of ways."
He said city officials reviewed agreements Wal-Mart has made in other South Dakota communities, adding that the Vermillion document is similar to Yankton's, "and contains a lot of provisions, from the city's standpoint, that we thought were desirable to have and were contained in the Yankton and Pierre agreements."
Because of time constraints, Wal-Mart has agreed to do needed infrastructure improvements to the property according to city specifications, McCulloch said.
"Rather than have Wal-Mart reimburse the city on a front-foot assessment basis afterwards, in this particular case, the city will reimburse Wal-Mart," he said.
The cost provided in the agreement for the infrastructure improvements is $730,580.
The city won't dip into any funds on hand to make those reimbursement payments.
"The money the city is to pay Wal-Mart is to come out of the sales tax revenues that are generated by the Wal-Mart store," McCulloch said.
Thirty-five percent of the 2 percent annual city sales tax receipts generated by the Vermillion Wal-Mart would go toward reimbursing the retailer.
Once Wal-Mart exercises its purchase option and acquires legal title to the real estate, the infrastructure is supposed to be completed by April 30, 2006. The store should be open by Oct. 31, 2006.
"If either one of those deadlines are not met, then the city is absolved of its obligation to pay the $730,580," McCulloch said.
The agreement includes provisions that would allow Wal-Mart to carry through with its plans to build here, even if it misses the deadlines.
"It (Wal-Mart) has a five year time limit to do that," McCulloch said. "If it does not open a store and operate it for even one day, then there is an option that the city and the Chamber can exercise to purchase the real estate back for the price that was paid for it at the beginning of the contract."
Should Wal-Mart open its store by the October 2006 deadline, but only stay open a short amount of time, the city again would not be obliged to pay the reimbursement.
Murl Miller, a Yankton attorney representing Wal-Mart, said the store's site plan has changed since mid-summer when the retailer first announced its intention to locate here.
One of those changes is the addition of Bower Street, a new east-west street that will run from Princeton Street to the east edge of the Wal-Mart property.
"This street will create a series of additional lots that will be alongside the south side of the Wal-Mart," Miller said. "It will take a significant amount of time to develop Bower Street as intended."
"I understand that the city will not allow anyone to speculate on those lots," Roger Jeck, a Vermillion contractor, said. "In other words, the city won't sell it to me or anyone else in town with the hopes of developing something down the road."
"Originally when we were approached in regard to acquiring the property on behalf of the company, an entire footprint was presented," said Lisa Ketcham, executive director of the Vermillion Area Chamber and Development Company. "The footprint included several outlots that were contingent on the deal going through."
The number of lots, she said, have been reduced in number as planning has progressed.
Prior to Wal-Mart's announcement, she said, no one was interested in the property for speculative purposes.
"Since that time, until we have further negotiations and developer's agreements finalized with Wal-Mart, we have frozen things," she said.
Ketcham added that at the same time people are requesting a chance to purchase that property, they're also indicating they don't want it if Wal-Mart doesn't come to town.
"It's not prudent ? to sell it on the basis of only owning it if Wal-Mart comes to town," she said. "Once the Wal-Mart agreements are settled, we will deal with the additional requests that we have."
"We're just not buying a piece of property and speculating," Miller said. "There are a lot of timing requirements as to when this has to be completed. If it's not completed, there are consequences. That's not speculating."
The outlots have specific purposes, he said. "But until we go through the platting process, that's when those uses will get developed." Any new businesses located on those lots would first have to receive city approval.
Miller noted that the city has a long-term desire to improve the water infrastructure in the area of the store's site, including the construction of a new water tower.
That tower, he said, will need to have large diameter water lines.
Other developments include a public park in a wetlands area near the property, and bike trail that would go along Highway 50 and connect with the trail that is already in place along the Vermillion River.
The proposed site has grown from 17 acres to 28 acres.
"The increased size allows for the instant development of infrastructure which can be utilized to attract additional developers to the area and continue on with the momentum that has been started by the city of Vermillion," Miller said.
Wal-Mart, he said, has also listened to aldermen's concerns about the impact the store will have on homeowners living south of the site on Duke Street.
Miller said Wal-Mart will construct a five-foot earthen berm, planted with large trees and other vegetation, to act as a buffer between Duke Street residents and the store site.
It will also place a kiosk in its parking lot that will show Wal-Mart shoppers how to find their way to Vermillion's downtown shops. It may also place similar kiosks at the DakotaDome, the Coyote Student Center, downtown Vermillion and the east and west ends of Cherry Street.
"I think this is a win-win for the city of Vermillion as well as the company," Ketcham said. "As co-signees of this agreement, my board has conceptually approved the agreement contingent on the council's approval."