The Enid News and Eagle, Enid, OK

Local and State News

May 21, 2013

Tax rebate protest: Company redeveloping Oakwood Mall speaks out

ENID, Okla. — City commission approval Tuesday of a plan to give nearly $1 million in tax rebates to Hunt Properties for redevelopment of the old Homeland store came over the protests of the vice president of the company redeveloping Oakwood Mall.

Brenda Dill, of Vector Companies, said the city is spending $950,000 it doesn’t have to spend. The city agreement with Hunt Properties calls for a tax rebate of $950,000 when new stores in the Homeland building begin generating sales tax. The tax can be paid over a 15-year period. Hunt has until June 11 to close the deal. The sale would earn the city $1.75 million, plus a 5 percent interest fee.

The city bought the Homeland property in 2011 after it had been vacant for six years. Hunt Properties agreed in February 2012 to buy the land and structure, and then convert it to house retail stores.

City Manager Eric Benson said the tax rebate will not be paid until the property begins generating sales tax.

“The same tenants they will be recruiting are the same tenants that would come to the mall,” Dill said. “And, we’re not asking for money.”

Tulsa-based Vector Companies plans to purchase Oakwood Mall and “de-mall” the property, converting it to an outdoor shopping center. Enid city commissioners in November  approved a Tax Increment Finance district to help with construction costs.

The project, which is expected to cost about $35 million, would include constructing new buildings on the front side of the mall property and moving current tenants into them. The mall itself would be demolished, except for anchor stores Dillard’s, JCPenney and Sears, which would be maintained and new facades built.

Dill said Oakwood Mall has 550,000 square feet of space, and based on square footage, the city theoretically would have to pay Dill $11.5 million in tax rebates. “But we’re not asking for any money.”

Dill said Vector offered to purchase the Homeland property, along with three other companies. She asked commissioners to table the vote until they had thoroughly considered it. She said Vector is close to having a commitment for the mall.

Benson said a major retailer involved in the project signed a contract with Hunt Properties, but only had a letter of intent with Vector.

Dill told the commission Vector came to the city as a partner. The mall is the biggest revenue producer in the city, she said, and it will continue to lose tenants and may go down. For example, Dill said Vector is trying to recruit Petco, and Hunt Properties is trying to recruit Pet Smart.

“If they get Pet Smart, then Petco will not come,” she said. “That is the way projects lose tenants.”

“You are giving them an unfair advantage over us,” Dill said. “You need to understand that before you make that decision.”

Ward 6 Commissioners David Van Hooser said the difference between the two projects is 1 percent. If Vector can’t make up a 1 percent loss, it should not have the project, he said.

In presenting the proposal for Hunt, City Attorney Andrea Chism introduced a new clause in the agreement. The new clause states Hunt will begin construction within 30 days, and at least one store will be ready for occupancy by Dec. 25.

Ward 1 Commissioner Ron Janzen said he did not like a 15-year rebate. He said he is not in favor of anything longer than five years.

Ward 3 Commissioner Ben Ezzell believes it is a bad precedent for the city to set.

In other business, commissioners:

• Discussed parts of the 2013-14 budget. Airport director Dan Ohnesorge discussed the costs and income of Enid Woodring Regional Airport, and the activity planned for the airport, including a major runway extension.

Police Chief Brian O’Rourke and Fire Chief Joe Jackson also discussed their budget requests.

• Approved a resolution of support for Koch Nitrogen’s expansion project. The company recently announced the $1 billion local infrastructure investment. It would create 800 construction jobs and 30 new permanent positions.

The plan also will cut the company’s use of potable water from the city, reducing its daily consumption to about 500,000 gallons.

• Approved an amendment to increase the 2012-13 health fund budget by $742,000. Chief Financial Officer Jerald Gilbert said health insurance claims for fiscal 2012-13 are projected to be about $3,579,000. The city is insured through Blue Cross-Blue Shield and has a stop-loss insurance for claims exceeding $3,579,000. The projected budget deficit is $742,000.

• Appointed Ezzell as a commission representative to Enid Park Board.

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