The city Redevelopment Agency approved a deal Tuesday that could bring the city 100 new jobs and a quarter-million dollars in sales tax revenue annually within the next few years.
The City Council unanimously agreed to purchase 11.5 acres at the southeast corner of the 13th South and Main Street intersection.Orem officials expect to purchase the land for $1.7 million, then sell it for slightly less to R.C. Willey, a home furnishings business. R.C. Willey plans to build a 65,000-square-foot store on part of the land and rent or sell the remainder to one or more other retailers.
"I doubt they will have a hard time attracting tenants," City Manager Daryl Berlin said. "It's a great location and a good piece of land."
Berlin said that although the city will sell the land at a slight loss, it will make up the difference, and more, in sales tax.
"It might take a few years, but I think we will see about a quarter-million in sales tax annually from R.C. Willey and the other business," he said.
Bill Child, R.C. Willey chief executive officer, said his company has hoped for a long time to open a Utah County outlet. He has been negotiating with Orem officials for about 18 months. The company has stores in Syracuse, West Valley City and Murray.
"We think our business will fit in here very well. We love the area and the people. And with 160,000 people in the county, we think the business will do well.
"Utah County has a lot of young families. The price of our furniture will match up well. The family situation makes it a good market, and we hope some of the school kids who don't settle here will be exposed to our business before they move to other communities."
Child said it might take up to a year to break ground in Orem and another year before opening. The company wants to build another distribution center first, "so we can do this right," Child said.
He expects about $10 million in sales revenue from the Orem site within the first year.
"Eventually, we are looking for about $30 million in sales, like we get at the other stores. It will probably take five or six years to get to that point."
Child said the 57-year-old company expects to spend about $5 million to develop the Orem site. He said his company is negotiating with "a very large retail business" for the acreage R.C. Willey will not use. If that deal falls through, the space will be used for several smaller businesses judged to be compatible with the furniture business, he said.