Blaine backs tax break for new Scheels store as city leans into sports destination identity

The new Scheels mega sporting goods store in Blaine will come with a Ferris wheel and an aquarium — and an $84 million tax incentive package.

The Blaine City Council on Monday took a first step toward eventually issuing bonds for the roughly 250,000-square-foot store, as well as a 750-stall parking ramp for public use within the city’s massive development of a new downtown at 105th Avenue. The council also approved up to $63 million in bonds for a nearly $71 million, 5,000-seat baseball stadium and event center. The measures passed without opposition.

Mayor Tim Sanders said Tuesday that Scheels will be another “destination” for residents and sports tourists, adding an estimated 500 jobs, bolstering revenue and helping to reinforce Blaine’s identity as a Twin Cities sports mecca. He said the city’s public-private partnership will also ensure the downtown district has needed parking and road improvements.

“We’ve got to get the parking and the infrastructure right,” Sanders said. “And to help unlock, just on the Scheels side of things, $150 million worth of investment and construction in our city, is absolutely worth it. Overall, it’s a sound financial decision and a win for the city’s taxpayers once the district is complete.”

For Scheels, city officials expect the 20-year bonds to be paid back with sales tax revenue generated from a yet-to-be-approved special taxing district. The city plans to ask state lawmakers in an upcoming session to establish a sales tax district in the 105th Avenue area, with a proposed extra 3% tax on food, lodging and event tickets, as well as a 1.5% tax on retail goods.

A spokesperson for the company did not immediately respond to a request for comment.

For the baseball stadium, the facility owners would make lease payments to cover the debt service of the bonds, said Erik Thorvig, Blaine’s interim city manager, adding the city would not pay them off.

City officials announced the Scheels development during the PGA Tour’s 3M Open in Blaine.

Construction on the $150 million Scheels project could begin in spring 2026, with a store opening slated for May 2028.

City documents show Scheels requested the city issue bonds worth $50 million for road work and utilities, construction and real estate, and $23 million to build the parking ramp. The approved tax incentive package would total up to $84 million, including principal and interest.

Thorvig said during Monday’s meeting that the city would have several years to win legislative approval of the sales tax district before the bonds would require permanent financing in 2032. Blaine spokesman Ben Hayle said by using a district-only sales tax to repay the bonds, “this will not impact the general tax levy or property taxes.”

The city, Thorvig said, has an “extensive list” of options if the sales tax district is not approved, such as expanding the area’s tax increment financing district to offset the bond payments.

Thorvig said the project will likely be under construction before the city issues the bonds, which would be another safeguard to ensure the work gets done.

The store would be the Fargo-based Scheels’ second location in the Twin Cities metro area, along with its Eden Prairie site. In addition to sporting goods and outdoor gear, the Blaine store will have attractions including a restaurant, arcade games, candy shop and 16,000-gallon saltwater aquarium.

“This new location will be built specifically with the Blaine and surrounding communities in mind, from local experiences to expert service,” Scheels CEO Matt Hanson said in a July press release.

For the baseball stadium, the council on Monday increased its financing package for the project, which officials hope will host an independent, non-affiliated minor league team.

The agreement approved Monday would boost the bonds to be issued from $38 million to $63 million. The city did not issue the bonds initially approved last fall as construction did not begin over the winter as anticipated. Construction is now planned to start this coming winter.

Council Member Jess Robertson said the pedestrian overpass has been an “important sticking point” requested by residents that she feels will greatly improve connectivity. She added that city staff went “above and beyond in due diligence” to ensure the city is not left holding the bag for the stadium.

In addition to lease payments covering the debt service, extra revenue would go in a capital reserve fund for future improvements to the stadium, or to cover expenses if funds ever fall short.

While baseball would be a main draw to the stadium, city officials have said the year-round facility would also host soccer, hockey and football events, as well as concerts and festivals.

The city has been acquiring aging warehouses and other buildings in the massive redevelopment of the 105th Avenue district since 2016, Thorvig previously said.

Last year, the council approved the issuance of $28 million in bonds backed by tax increment financing for demolition and property acquisitions. The city also issued $9 million in tax abatement bonds for infrastructure improvements.