The Enid News and Eagle, Enid, OK

May 1, 2014

Contract on ‘de-malling’ falls through

Dale Denwalt, Staff Writer
Enid News and Eagle

ENID, Okla. — After spending almost two years trying to secure a deal to renovate Oakwood Mall, Tulsa-based developer Vector Companies and managing company J. Herzog & Sons have parted ways.

“The Oakwood Mall is no longer under contract with Vector Securities. Oakwood Mall is currently exploring options for the future of the property,” JHS announced in a press release.

In June 2012, Vector CEO Jim Dill announced plans to “de-mall” by eliminating the enclosed spaces and creating exterior entrances for the shops. Even after securing an incentive package from local government entities, Vector’s own imposed deadlines for construction passed without visible progress.

“The city did everything imaginable to enhance the opportunity for success,” City Manager Eric Benson said. “It eventually came down to having a willing buyer and seller partnership. They had a deadline and just couldn’t get together on the deal.”

Benson said Thursday’s news doesn’t hamper economic prosperity in Enid. Despite city leaderships’ frustration, he said, there will be other “compelling” strategies and options pursued.

“We will find new partners; we have been approached by willing candidates already, and we are pursuing discussions to that end,” he said. “Interest in retail expansion in Enid has never been stronger, and this private transaction does nothing to diminish our potential.”

Since the project was first announced, shop owners complained the project was plagued with a lack of communication from Vector, their would-be landlord. As late as March, there still were no details about when — or if — the mall would be renovated. Herzog also has avoided questions about the project.

The last public statement made by Dill or anyone else at Vector was in June 2013. Officials at the company have declined to return any calls for comment since then.

At that time, Vector President Brenda Dill said competition among retail landlords hurt her effort to secure enough contracts to proceed, specifically because the city offered incentives to renovate the former Homeland building on West Garriott. In order to finance the renovation, she said, Vector needed commitments to fill 85 percent of the roughly 550,000-square-foot property. With tenants looking elsewhere, Vector had trouble signing them to a contract at the mall.

Vector received its own economic development incentive — a sales tax rebate deal worth $5 million that would only have kicked in upon completion of the de-malling project.

Neither Vector nor Herzog could be reached Thursday for comment.

Ward 3 City Commissioner Ben Ezzell said he was surprised by the announcement.

“It was a surprise and frankly, a disappointment — but not a hugely great shock,” he said.

The deal, he added, had been a difficult one to put together.

“It was clearly not as solid as everyone would have liked to see,” he said.

Benson’s frustration sits in contrast to his previous statements of optimism and confidence about the deal. Earlier this year, he asked residents of Enid to be patient because of the de-malling’s complexity.

As for the future of the mall, Ezzell noted Herzog is free to make its own renovations if it wishes.

“I think that the economics are right for someone to reinvigorate the mall. I just wish this would have been the project,” said Ezzell. “I expect that someone will; I’m just frankly kind of bummed out that the timeline’s reset.”

The retail economy is viable in Enid, he said.

“But because it’s not been a thoroughly tested retail market, I think that folks are a little more cautious,” he said.

Vector still has a foothold in Enid, despite the de-mall deal failing to gain traction. Dill reportedly is in negotiation to build a high-end apartment complex to complement Stonebridge Village, the housing project being constructed at Cleveland and Chestnut.