Oklahoma Factory Shoppes - I40 & Council

[ultimatesooner]

awesome

[sroberts24]

thats fan-freakin-tastic

[traxx]

I hope this turns out well. They're going to have to go above and beyond on this as outlet malls have lost some of their cache. Outlet malls aren't the place where you get the good deals that you used to get. In some instances they cost more.

[Richard at Remax]

Im kinda new here so what kind of outlet mall are we talking about?

[sgt. pepper]

worthy cook, check out the fist of this thread, page one. i would think it will be the same.

[adaniel]

I'm sorry I really hate to be a "Debbie Downer," but does anybody else feel that this area (OKC area) is really starting to become overbuilt? Between this, University North Park, Quail Springs Village, MWC Town Center etc. etc. is OKC really reaching a saturation point as far as retail centers go?

[soonerfan21]

all the points you mention are at opposite ends of the city, so to me I-40 & Council being on the west side of OKC makes perfect sense.

[metro]

I'm sorry I really hate to be a "Debbie Downer," but does anybody else feel that this area (OKC area) is really starting to become overbuilt? Between this, University North Park, Quail Springs Village, MWC Town Center etc. etc. is OKC really reaching a saturation point as far as retail centers go?

I don't think so, we've been underserved for decades on the retail and sports front, 2-3 years of building isn't going to catch us up for the decades we lost.

[CCOKC]

That is exactly how I feel. I was shopping at Talbots a few months ago and talking to the sales associate about their new store going in across the street. She told me that this store will be comparable to a Dallas Talbots and that so many of the current clients drive to Dallas to shop for the "good stuff".
I imagine there are a lot of people who drive to Dallas to go shopping for their "good stuff". The more we can keep here (or even lure from other cities) the better.

[autoMATTic]

I dont think we are anywhere near we we need to be as far as retail is concerned. I agree, we are playing catch-up in OKC.

[metro]

City Council OKs $8M in incentives for outlet mall
Journal Record
May 7, 2008

OKLAHOMA CITY – The City Council approved nearly $8 million in economic incentives to help establish a massive outlet mall in western Oklahoma City on Tuesday.

The vote was 5-2 with Larry McAtee and Ronald Kelly dissenting. They asked for time to clarify the city’s policy toward retail business incentives and more information about the developer, Horizon Group Properties, before committing to the plan.

“The Economic Development Trust, which I’m a member of, has been tasked with the responsibility of developing a policy or guideline for incentivizing retail,” McAtee said. “Approving this retail incentivization before we have a policy in place, to me, is putting the cart before the horse.”McAtee, who represents the ward in which the mall is planned, said, “If it were to fit within the guidelines, then I would be supportive. If it’s outside the guidelines, then I would be opposed to it.”

Rosemont, Ill.-based Horizon plans to build a minimum of 340,000 square feet of space near Interstate 40 and Council Road at an initial investment of about $50 million, city officials said. Depending on the success of the center, another 75,000 square feet could be added later.

The mall, dubbed The Outlet Shoppes at Oklahoma City, is expected to have about $102 million in annual sales, which would provide the city with about $4 million in retail taxes. City staff reported that about half of those funds will be new to the local economy.

The development is expected to create about 1,000 new jobs with an annual payroll of $18.72 million. Those jobs will increase local sales tax by an additional $1.5 million, city staff reported. The project is also expected to create about $1.25 million in annual property taxes.

In return, the city will agree to pay for infrastructure improvements – largely traffic and drainage systems – at a cost of about $2.4 million. The city also agreed to reimburse Horizon for regional marketing expenses worth up to $5.5 million over 10 years.

The mall’s construction is scheduled to begin Nov. 30 and be completed within a year.

City Manager Jim Couch reported to the council that the development will “promote sales tax base growth and offer citizens and visitors new shopping opportunities in Oklahoma City.” He confirmed none of the costs will be associated with the recently approved general obligation limited tax bond authorization. The incentives will be paid for out of the city’s Street & Alley and General Obligation Bond Funds and the Oklahoma City Economic Development Trust.

Horizon owns, develops, renovates and operates retail shopping centers, including a dozen factory outlet malls totaling about 2 million square feet. Most of the company’s properties are in the north central part of the country near the Great Lakes, with the rest scattered from California to Pennsylvania.

Horizon’s typical tenants include Tommy Hilfiger, Lane Bryant, Nice West, Gymboree, and The Gap.

Chief Executive Gary Skoien said the company started looking at Oklahoma as a potential market in 2006, and recent news from Forbes business magazine that the state is better positioned to ride out a recession helped drive the final decision to build in the metro area. “There’s no real outlet center in the state of Oklahoma,” Skoien said. “And it has about the right size population for an outlet center; you don’t want to be too much smaller unless there’s something else going on.“And it’s kind of my sense, which has been reported a lot lately, that it’s got a more resilient economy than other places. … It’s kind of diverse in a positive way,” he said. “And as we started looking at it, we started realizing that some of the national retailers were doing tremendous sales in Oklahoma City.”

Answering Councilman Kelly’s concerns that city officials should take a closer look at Horizon’s other properties before moving forward, Skoien said the company’s malls have strong operations.“We just opened a center last October in El Paso, Texas, which is a similar-size city,” he said. “And it’s doing just terrific. Sales are beating expectations.”

Of the less than 300 outlet malls scattered across the country, Skoien said, Horizon has owned, operated or developed more than half of them. It’s highly unlikely Oklahoma City will be left with a low-sales mall, he said.“Most of the major companies have decided that outlets are a strong channel of distribution. So I think the outlet business itself, by every indication, is very strong,” he said. “Unlike what’s happened in the past, outlet centers are being built closer to the population base. As opposed to the one that used to be right between Oklahoma City and Tulsa (in Stroud), this is right where the people are.

”The company is publicly traded in the over-the-counter market under the symbol HGPI.PK. Its stock was trading at about $4.50 Tuesday, at the lower end of its 52-week range of $4.50-7.00. The company has already started promoting the Oklahoma City project on the Internet at Located in the historic tulip capital.

[Jesseda]

i went shopping this weekend and the childrens Place company told me that they will be having a outlet store in the new outlet mall, also casual male big and tall store will be in the new outlet, the disney store told me that they will be setting up a outlet store in the oklahoma shoppes. I having been asking the disneystore about the outlet for the past 6 months, they told me they didnt have any info ion it, but this past weekend they told me they will be there, so i guess the green light is being sent to potential outlet retailers to sign up..So that is only three that I have heard off, I am a big outlet fan, so this is exciting news to me..

[bornhere]

I can understand the infrastructure improvements, but I don't get why the city needs to pay the mall's advertising costs for 10 years. Is this a Big League® Outlet Mall?

[kevinpate]

... The company has already started promoting the Oklahoma City project on the Internet at Located in the historic tulip capital.

odd spelling of the page title, but as many typos as I make, I suppose I ought not quibble.

[DavidGlover]

Incentives for retail are almost always unnecessary. Developers of retail and malls go where it makes sense for them. This 8 million was another subsidy the council gave away. If you want a short education on how these deals work read: I sent the council this link. McAtee is right, having a system of standards for these deals is important. Now money will flow away from the city and local retailers. Ask any local business that sells similar items what they think of these subsidies.

[metro]

odd spelling of the page title, but as many typos as I make, I suppose I ought not quibble.

To clarify, that was not my quote, but the quote from the article I posted.

[flintysooner]

Incentives for retail are almost always unnecessary. Developers of retail and malls go where it makes sense for them.
...
Ask any local business that sells similar items what they think of these subsidies.

I can say with certainty that as of this moment for some retail projects certain incentives are necessary or the projects will simply not happen.

The current economic difficulty has caused all quality anchor retailers to reshuffle their cards of expansion opportunities for the 2010 and later years. Most retail developments require one or more anchor retailers. Other retailers sign up for a development initially by signing letters of intent that often are conditional upon the anchor(s). Anchors sign up conditional upon other factors. Those other factors nearly always include economic incentives of one sort or another.

A project that actually happens has to have successful land acquisition followed by at least minimum design and tenant commitments. Budgets have to be created. The project has to be proven to be viable economically. This means that all parties involved have to be able to project profitability for a period of time - years not months. Legal issues including zoning and permitting have to be addressed beforehand. This all takes a very long while.

Projects in our area compete with other potential projects and other developers from all across the nation and even across the globe. Presentations have to be made before teams of people who may have never visited Oklahoma City and know nothing about the place other than what is on national TV and what they find in their packets. So in 2 or 3 hours at most the developer team has to convince the retailer team that this "Okie" project should be a higher priority than one in San Diego or Kansas City or Denver or Orlando.

More difficult economic conditions cause a reduction in the number of quality projects that are available. Oklahoma City is blessed right now with a certain advantage in economic area. We may know that but some team in Timbuktu wants it proven to them.

At this point our economic advantage isn't even very significant because those we are competing against wouldn't even be there if they were not in the same category of economic opportunity. There are other communities whose leaders and developers are every bit as smart and skillful and persuasive and maybe moreso than we are in competing for these opportunities.

Does it make a difference? It does to the people who work here. It does to the people who live here and shop here and raise their children here.

Should our governments be tough negotiators? Yes, and every deal is not necessarily worth doing. It is a negotiation. Just because someone asks for something doesn't mean it has to be given or other things can't be proposed.

It is easy to trivialize and idealize.

[kevinpate]

Wasn't picking on your writing metro. The page name of the link ended in oklahhoma.htm

I wrote page title but should have written page name. Alas, alack, I'm headed back to my shack.

[DavidGlover]

Retailers go where they can make money, if they can talk a local government into free money they will, but the give away is not why they make their decision. Please read to understand both sides. The language you use makes me think you might have a financial interest in these kind of projects in some way.

[flintysooner]

The language you use makes me think you might have a financial interest in these kind of projects in some way.

I know something about development having done some if that is what you mean.

[kevinpate]

Yes David, nearly any business will go where the climate is favorable to improving the bottom line. That's a given.

So, sit yourself in the private sector decision chair. You have 3 options, all previously vetted and all making economic sense for your bottom line, assuming no incentives on the table.

Then, Option A advises it is willing to host a welcome to town cocktail party for your ribbon cutters

Option B announces it is willing to provide a million in incentives

Option C is willing to lay out 4 million in incentives.

Care to guess which community is going to be spared a cocktail party?

[andy157]

I can say with certainty that as of this moment for some retail projects certain incentives are necessary or the projects will simply not happen.

The current economic difficulty has caused all quality anchor retailers to reshuffle their cards of expansion opportunities for the 2010 and later years. Most retail developments require one or more anchor retailers. Other retailers sign up for a development initially by signing letters of intent that often are conditional upon the anchor(s). Anchors sign up conditional upon other factors. Those other factors nearly always include economic incentives of one sort or another.

A project that actually happens has to have successful land acquisition followed by at least minimum design and tenant commitments. Budgets have to be created. The project has to be proven to be viable economically. This means that all parties involved have to be able to project profitability for a period of time - years not months. Legal issues including zoning and permitting have to be addressed beforehand. This all takes a very long while.

Projects in our area compete with other potential projects and other developers from all across the nation and even across the globe. Presentations have to be made before teams of people who may have never visited Oklahoma City and know nothing about the place other than what is on national TV and what they find in their packets. So in 2 or 3 hours at most the developer team has to convince the retailer team that this "Okie" project should be a higher priority than one in San Diego or Kansas City or Denver or Orlando.

More difficult economic conditions cause a reduction in the number of quality projects that are available. Oklahoma City is blessed right now with a certain advantage in economic area. We may know that but some team in Timbuktu wants it proven to them.

At this point our economic advantage isn't even very significant because those we are competing against wouldn't even be there if they were not in the same category of economic opportunity. There are other communities whose leaders and developers are every bit as smart and skillful and persuasive and maybe moreso than we are in competing for these opportunities.

Does it make a difference? It does to the people who work here. It does to the people who live here and shop here and raise their children here.

Should our governments be tough negotiators? Yes, and every deal is not necessarily worth doing. It is a negotiation. Just because someone asks for something doesn't mean it has to be given or other things can't be proposed.

It is easy to trivialize and idealize.

After I compared your comments to those of the Companies Chief Executive Gary Skoien, the two don't add up. Unless Mr. Skoien had some way of knowing for certain, and was secure in the fact way back in 2006 that the 8 Mil. would be forthcoming in 2008.

[andy157]

Yes David, nearly any business will go where the climate is favorable to improving the bottom line. That's a given.

So, sit yourself in the private sector decision chair. You have 3 options, all previously vetted and all making economic sense for your bottom line, assuming no incentives on the table.

Then, Option A advises it is willing to host a welcome to town cocktail party for your ribbon cutters

Option B announces it is willing to provide a million in incentives

Option C is willing to lay out 4 million in incentives.

Care to guess which community is going to be spared a cocktail party?

So, what I'm hearing you say is this, and correct me if I'm wrong. If OKC offerd option "A", and Lexington offerd option "C", then Lexington gets the mall, and OKC saves the cost of a cocktail party?

[DavidGlover]

Option D - where ever they decided makes the most market sense location for the shop. Why do you think they are coming to OKC? For the incentives - or - because this is where they want to be? Developers love subsidies but they choose options based on reality first after they decide where they want to go. Don't think so click here and read what David Packard said to the Idaho Governor.

[Jesseda]

anymore news on this, has any dirt been moved around yet at all?