Springdale Sam's Club To Open Summer 2016; Will Boost Sales Tax Revenue

SPRINGDALE -- Officials believe the return of Sam's Club will help rebuild the city's sales tax base.

Walmart's members-only warehouse division left Springdale seven years ago, costing the city about $1 million per year in sales tax revenue, according to city officials.

However, Sam's Club and city leaders announced the store's return during a news conference Friday morning from the Sam's Club Community Room at Arvest Ballpark.

"I keep telling people, 'The sound you hear is the giant monkey getting off our back,'" said Mayor Doug Sprouse.

The new Sam's Club will be built at the southwest corner of the Interstate 49 and Sunset Avenue exchange. The 136,000-square-foot store is slated to open in the spring of 2016 and employ about 175 people. It'll back up to 56th Street, the same area Walmart's members-only warehouse division had in its sights in 2005.

Sam's Club operated a store in on South Thompson Street next to a Walmart Supercenter from 1987 to September 2007. The retailer decided to move that store to Fayetteville after it was denied a liquor permit from state Alcoholic Beverage Control Board, scuttling plans for the replacement store at the Sunset Avenue site.

Jim Holt and Sue Madison, state senators at the time, were among vocal opponents of the planned Springdale store getting a liquor permit.

City officials have said for years Sam's Club's move to Fayetteville cost the city millions in tax revenue.

The city collects a 2 percent sales tax. One half is used to repay bonds and the other half goes into the city's general fund.

Wyman Morgan, Springdale's director of finance and administration, said the $1 million estimate from the loss of Sam's is from the general fund. If you consider the loss to bond repayment, he said the loss was around $2 million annually.

Springdale's sales tax collection for all businesses to its general fund peaked in 2006 at $124.8 million, bottoming out at $96.7 million in 2010. Morgan said not all of that drop can be attributed to Sam's leaving.

The National Bureau of Economic Research reports the U.S. economy was in recession from December 2007 to June 2009. An ensuing housing crisis hit the local economy in late 2008.

Morgan said Springdale was hit particularly hard by the housing market collapse because of the large number of building supply stores in the city.

A 2008 change in tax law also hit the city hard, he said. The change required local sales tax collection be based on "point on delivery" of merchandise, not a brick-and-mortar site of sale. Springdale has several furniture stores that deliver outside the city; Morgan said one company estimated about 60 percent of its sales were delivered outside Springdale.

Sales tax collection in Springdale grew incrementally the past few years, Morgan said, but the growth in the last four months has been significant as economic activity in the city picks up.

"There's a lot of little things going on in Springdale that are having a big impact," he said.

The new Sam's store won't open for about two years, but Morgan said the effect will be felt much sooner.

"They will start buying materials to build this store and we will get sales tax on that as well," he said.

Morgan didn't want to guess what kind of sales tax bump the new store would give Springdale, but said the area's growing population and the store's location off I-49 could mean increased sales.

The Springdale store won't have a liquor permit, but could sell beer and wine.

Colby Tanner, Sam's Club senior director of real estate, said infrastructure improvement to the area around Arvest Ballpark made the new site attractive. The city is in the early stages of improving 56th Street, the road connecting the ballpark to Sunset Avenue.

Sprouse said the area around the ballpark could grow with a mix of residential and commercial projects.

"We need to be something unique to the area," he said.

The mayor said the 56th Street improvements should be finished within in a year.

The project is part of $71 million bond project voters approved in 2012; about $43 million is going to road projects.

The bond program also helped pay for the Don Tyson Parkway and its I-49 interchange. The road provides another access point to the ballpark.

Another road project will extend 56th Street to Elm Springs Road, where Walmart is building a Supercenter.

The Sam's Club will be Walmart's third new store along a 3-mile stretch of Interstate 49. The Elm Springs Road Supercenter opens Aug. 13. A Neighborhood Market is slated to open in the fall of 2015 off the Don Tyson Parkway exit.

Springdale will be the area's third Sam's Club location along the the I-49 corridor. Walmart opened a Sam's Club in Bentonville in 2006. The Bentonville and Fayetteville stores are about 21 miles apart.

The retailer operates 621 clubs in the United States and Puerto Rico. The first club opened in Midwest City, Okla., in 1983.

Tanner said the company plans to open about 20 stores this year.