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Capital-Letter BIG
Turkey Creek’s regional economic impact is huge
When you talk about commercial development in Turkey Creek, little words just won’t do; Turkey Creek is all about BIG.
It’s a BIG development (410 acres), that required BIG investments ($5.5 million in publicly funded infrastructure improvements alone), brought in BIG stores (both a Super Wal-Mart and a Super Target are among its anchor tenants), and has subsequently had a BIG... no, make that a HUGE impact not only in and around Parkside Drive, but on shopping patterns and retail revenues across Knox and its neighboring counties.
Just how big is BIG? “I’ve been told that Turkey Creek is the hottest retail area in the state right now, driven by demographics, disposable income, household income,” says Mike Edwards, president of Knoxville Area Chamber Partnership.
And right now, it’s only getting bigger, with a new suburban megaplex movie theater slated to move in with the still-expanding menu of dozens of stores—specialty shops and general interest mainstays alike, Marble Slab Creamery and Lifeway Christian Stores nestled in the looming shadows of Goody’s and Office Max and Wal-Mart...
Just how sought-after is tenancy in Turkey Creek’s burgeoning retail Mecca? Again, Edwards relates that, “Turkey Creek Land Partners are only giving ground leases (to tenants). Retailers hate that. They want to own the ground under their buildings. But they’re leasing. That tells you something.”
But assessing the larger economic impact of a commercial development like Turkey Creek in hard dollars and cents is not an easy thing to do. For one thing, businessfolk are loathe to discuss sensitive details such as sales totals at specific outlets. For another, sales tax records broadly chronicle the activity on large, impersonal swaths of real estate, not individual shopping outlets or even entire commercial developments.
And for yet another, the bottom line for a development like Turkey Creek—a readily accessible shopping destination for at least four adjoining counties (Anderson, Blount, Loudon and Roane), and located only a few miles west of other established retail hotspots along the Bearden-to-Farragut corridor in Knox—must account for the retail impact it has on neighboring areas, good or ill.
“It [Turkey Creek] has affected all of this region in that’s it has become such a major shopping destination,” says Parker Hardy, president of Oak Ridge Chamber of Commerce. “It’s had an impact on shopping patterns, and there is some retail trade being lost from Oak Ridge. But that doesn’t mean it’s dried up our market.”
“Our experience has been that the more retail you have, the more it generates,” says Fred Forster of the Blount County Chamber, noting that Blount shoppers have quick access to Turkey Creek via the Pellissippi Parkway extension. “I think that will be born out in our sales tax; we’ve seen expansion of retail in Blount County, and an increasing variety of retail. I’m sure there’s an upper limit somewhere, but we haven’t found it yet.”
Knoxville Deputy Finance Director Jim York had occasion to make some rough estimates of Turkey Creek-area revenues in late 2002, just as retail development in the area was about to surge into high gear. His figures are only approximations, gathered from broad statistics collected before much of the development came online.
But the numbers are telling, nonetheless. Based on sales tax figures, York says gross sales for the real estate in and around Turkey Creek were about $170 million for the fiscal year ending in 2002—perhaps double, he guesses, what they had been the previous year.
“There’s been an awful lot of development since 2002,” York adds. “I would expect now that overall sales revenues may be well over a quarter of a billion dollars. The growth curve has been very rapid, especially more recently. I would guess that some of their sales-per-square-foot is pretty good, at least comparable to other developments of that size.”
Meanwhile, city property tax revenues for the area leapt from $180,000 in fiscal 2001 to $716,000 in fiscal ‘02. This year’s take? “Maybe $1 million,” York says. “I wouldn’t be at all surprised.
Also worth noting, says Edwards, is the fact that local governments’ front-end investments in infrastructure saw rapid returns. “The most important question was the extension of Parkside Drive,” Edwards says. “The city and county paid for the extension of the road, and within the second year after Turkey Creek opened, the city and county had gotten their money back in new taxes, property and sales taxes.”
But what of Turkey Creek’s influence on other shopping hubs in the area, particularly those along the sometimes hot-, sometimes cold-running commercial corridor of Kingston Pike? Naysayers predicted that Turkey Creek’s wealth of shopping opportunities would lead to a poverty of sorts for West Knox staples such as West Town Mall, Target, and the Wal-Mart off Walbrook Drive.
It’s too early to tell whether any of those dire predictions will come true. But so far, observers are optimistic that they won’t.
“When they opened, Turkey Creek was one of five locations in the country where a Super Target and a Super Wal-Mart went in right together,” Edwards says. “The opposition in terms of predicted negative economic impact said that Target’s Downtown West store would close. It expanded. They said the Wal-Mart at Walker Springs would close.... Well, go down there and see how it’s doing.”
Area business leaders like Forster and Hardy also say they aren’t worried about Turkey Creek adversely affecting retail business in their home counties. Granted, unflagging optimism is the default setting of most chamber of commerce presidents; but they sound like they mean it. “We don’t have a lot of specific data; most of my feelings about Turkey Creek come from my own observation and comments from the community,” Forster says. “And those feelings are all positive.”
In Oak Ridge, where developers and city officials are struggling to rehabilitate the chronically (and spectacularly) underperforming Oak Ridge Mall, Hardy says some of Turkey Creek’s tenants have expressed interest in opening new Anderson County locations in addition to those existing outlets.
“We’re trying to rework a dysfunctional shopping mall into a town center, a traditional downtown with free-standing anchor stores,” Hardy says. “A lot of people think Turkey Creek will detract from that effort. Our answer is, ‘No, it’s not.’ There are businesses in Turkey Creek who’ve expressed interest in also locating at our town center.
“In some people’s minds, Turkey Creek has affected our downtown area. But our problems (with the mall) existed well before they came along. We admire what they’ve accomplished there; our hats are off to the folks at Turkey Creek.”
But the most perplexing aspect of Turkey Creek is the question of its relationship with, and impact on, the town of Farragut, which both overlaps and borders the development. Though wholly dependent on local sales tax recapture (the town has no municipal property tax), Farragut has chosen to adhere to its founding vision in remaining a carefully planned, chiefly residential community.
“The enigma to me has always been Farragut’s position,” Edwards says. “In and around Turkey Creek, (the town) has office zoning, when it is 100 percent reliant on sales taxes. This is at a time when the retail corridor in Farragut is (struggling). It’s an economic model that has to change in the next 30 years.”
But while Farragut Mayor Eddie Ford acknowledges that the town’s sales tax revenues dropped nine percent from fiscal 2002 to fiscal 2003, he points to a spate of residential and smaller business developments in Farragut as evidence that the community is not only viable, but upwardly mobile.
“Our focus has to remain on protecting the integrity of our residential areas,” Ford says, noting that the town negotiated 100-foot buffer zones with some of the larger stores that now occupy Turkey Creek.
Even so, he says the town may yet benefit from new commercial development within its limits on the north side of Parkside Drive. “Things are moving more quickly than we can keep up with,” Ford assures. Then he hazards a prediction.
“I’ll bet there comes a time, not too long from now, when 10 percent of the sales tax in all Knox County comes out of what’s going on off Parkside Drive.”
Ten percent of the entire county; now that’s BIG.
December 2, 2004 • Vol. 14, No. 49
© 2004 Metro Pulse
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