The Enid News and Eagle, Enid, OK

Local and State News

September 18, 2012

Tentative TIF: Committee agrees on parameters for the de-malling of Oakwood Mall

ENID, Okla. — Members of the city of Enid’s Tax Increment District Review Committee reached tentative agreement Tuesday on parameters for the Oakwood Mall de-malling project.

The project, which is expected to cost about $35 million, would turn the mall into an outdoor regional shopping center and boost its taxable valuation.

A Tax Increment Financing District establishes an area in which increased ad valorem taxes will be delayed for a specific period of time. The funds would be used to help defray construction costs of the improvement. In the meantime, tax-receiving agencies will continue to receive taxes at the current ad valorem rate. At the end of the TIF district time, the higher ad valorem taxes would be collected.

Repurposing the mall will increase its overall taxable valuation and eventually increase the taxable income entities receiving ad valorem taxes will receive, supporters of the project have said. Garfield County Wade Patterson previously said he has been assessing Oakwood Mall for 15 years and said it had a valuation of $22 million in the past, but that has dropped to about $12 million.

“The potential for the stakeholders is to double their ad valorem income,” City Manager Eric Benson said Tuesday.

That is important to the city because all of city operating revenue comes from sales tax, and Benson said sales tax would be significantly increased by the projected additional business at the mall.

Jim Dill, of Vector Securities, which is in charge of the project, shared a revenue analysis of the project.

Vector revealed a plan in June to purchase and renovate, or “de-mall,” Oakwood Mall. The plan calls for construction of new buildings on the front side of the mall property and moving current tenants into them. The mall itself will be destroyed, except for anchor stores Dillard’s, JCPenney and Sears, which will be maintained and new facades built. Dill said those stores also may remodel the inside portion of their businesses.

Dill said existing anchor stores JCPenney, Sears and Dillard’s total 229,183 square feet, which will generate an estimated $3,437,745 in new sales. The city will receive tax sharing of $38,675 from those stores yearly.

For junior anchor stores — those with about 121,682 square feet of space — figuring $200 of new sales per square foot and estimating 95 percent occupancy, Dill said the analysis showed  $17,339,685 in new sales. The city would receive about $260,095 as its tax sharing portion.

Showplex Cinema, which will move to a separate location on the southwest corner of the mall property, will have an estimated 1,254 additional seats and enlarge to a 12-screen theater. It will generate about $1,600,000 in new net gross sales, Dill said. About 20,000 square feet of new footage will be added to mall shops, which will generate an estimated $8.7 million in new sales.

About 13,000 square feet of new space will be occupied by restaurants, and will generate an estimated $5,200,000 in new sales per year, Dill said. Chen Garden, currently in the front of the mall, will move to a separate building on the mall property, and Dill indicated there are other restaurants, including a Charleston’s and possibly Cabo Mexican Restaurant, that also will open at the mall.

Chick-fil-A, currently in the mall food court, also will move to its own store on the northwest corner of the mall.

Several businesses have signed non-binding letters of intent, Dill said. The figures in his analysis assume a 95 percent occupancy rate. Oakwood Mall currently is about 30-35 percent vacant, he said.

“The mall renovation would increase the property value of the entire area. It creates jobs and brings investment into the area,” Dill said.

The mall will continue to operate during construction. Herzog and Son will relinquish ownership of the mall to Vector Securities, Benson said. Work is expected to begin after the first of the year, and September 2013 is the target date for completion of the project. The mall will be the largest retail project in northwest Oklahoma.

Public Finance Attorney Nate Ellis discussed possibilities for the project and suggested a 15-year time period for the TIF, with the caveat that if the costs are recovered before that time, the TIF can be terminated. He also urged the group to keep the TIF package as uncomplicated as possible.

Health Department representative John Cromwell said 30 years ago, when the mall was developed, the city needed 200,000 square feet of retail space, and subsequent development created nearly a million square feet. He compared the mall project to the downtown Enid Renaissance Project, saying it will save a dying part of the city economy.

“I like this project because it is not dimensioned so it will create trouble elsewhere,” Cromwell said.

He said he will recommend the Health Department board approve it.

Retail Consultant Rickey Hayes addressed discussion about “cannibalization” of other business when the new mall is open. Cannibalization is taking business from other existing businesses in the community to make up part of the increase in the renovated mall. Hayes said most of that type of revenue will come from cities like Ponca City or Stillwater.

A draft of the project with the parameters discussed Tuesday and a 15-year time period will be available for review at the next Tax Increment District Review Committee meeting, set for 8 a.m. Oct. 4.

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