Assistant City Manager Cathy O’Connor presented a historic overview and timeline to council members of the proposed project, stating an agreement was first signed in May 2008 between city entities and the developer. The project was set to open November 2009. However, dramatic changes in the retail market due to the economic downturn and the developer’s difficulty to obtain financing took a toll on the developer’s ability to move forward on the project.
The original agreement stated that HGP would build a 320,000-340,000-square-foot factory outlet center, bringing 90 retailers into the market. A possible 75,000-square-foot expansion on several out-parcels based on the success of the mall was also included.
The agreement also required a minimum investment of $50 million by HGP. The project was expected to generate approximately $106 million in annual retail sales at the center and an estimated $4.1 million in sales tax revenues each year for the city.
Further, HGP requested incentives with the agreement to include a regional marketing reimbursement of $5.5 million over a ten-year period (approximately 12.5 percent of sales taxes received). Also, the city was to provide $2,395,000 in public improvements at the site.
Details within the amended agreement include a change in size of the center from 340,000 square feet to 320,000 square feet, and increase from $2,395,000 to $3,937,690 in public improvements to the site from the city, which includes $1 million for Drive 2, a private road.
O’Connor stated another important change is a key date element requested by the city. By August 31, 2010, the developer must meet certain requirements before the city proceeds with public improvements. By end of August, the developer needs to close on land acquisition, execute its construction contract and provide evidence of financing for the project.
Several city council members voiced concerns over the developers’ ability to secure financing for the project and whether Atlanta-based Cousins Properties was still part of the joint venture in developing the outlet mall. Other concerns included the project’s design concept and whether the developer owned the property while already preparing the site.
“We’re still working with them (Cousins) as well as with a couple of other equity providers. Right now we’re just finalizing that as we start the project,” Thomas Rumptz, senior vice president of HGP, said.
Regarding site preparation, Rumptz said, his group has an agreement with the property’s current owners that the developer can commence the activity prior to the closing of the land.
SOURCE: OKC BIZ
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