A local realty company will join forces with two Oklahoma City-area entities to operate the retail areas of Central Mall.
Members of the FISTA Development Trust Authority made the decision last week, creating a system that will keep operations of the FISTA (FIRES Innovation Science and Technology Accelerator) under FISTA Director James Taylor and designate a retail management company to handle the rest of the businesses within the mall. The decision is part of the process that would make the City of Lawton the owner of Central Mall at the end of a “due diligence” process still under way but slated to end by Dec. 31. The $14.6 million purchase price would give the city control of the entire 600,000-square-foot mall, the empty storefronts that will house defense contractors working with Fort Sill and the two Cross-Functional Teams housed there, as well as retail stores, restaurants, beauty care facilities and other current mall occupants.
The FISTA Trust Authority designated Insight Commercial Real Estate Brokerage, Lawton, to assume property management and maintenance duties for the retail portion and common areas of the mall. That Lawton-based company will work with Fleske Commercial Group, Norman, and Touchstone Management, Oklahoma City, under the agreement.
Ward 4 Councilman Jay Burk, the City Council’s representative to the trust authority, said Insight “brokered up” with Fleske and Touchstone to form a partnership that brings the expertise necessary to handle day-to-day operations at Central Mall. He said Fleske and Touchstone already manage about 1 million square feet of commercial space, with Insight providing management of about 500,000 square feet of space.
Burk said the four-member contract review team made clear to the new managers they wanted the mall’s current 16-member staff to remain in place, as much as possible.
“We thought that was important to us,” he said, of efforts that are to be made to retain current employees who already handle mall operations for its current owner.
Deputy City Manager Richard Rogalski said those employees will have first option for the jobs needed to handle retail operations, and those employees will work for the retail managing company, not the FISTA. FISTA officials and City Council members have said retention of employees is as important as retention of current retailers because of the knowledge they have.
The management contract specifies the partnership will be paid $12,500 a month for its work, Burk said, of details that also include minimum brokerage fees of 6 percent for new tenants and 3 percent for tenants who renew their leases. Management would include control of all maintenance and remodeling and construction work associated with retail facilities (spaces that are part of the FISTA, such as old Sears and Dillard’s stores, will be under Taylor’s control).
The initial contract will be for six months, or through the end of the current fiscal year (June 30, 2021), with two, one-year renewal options. The trust authority would monitor retail activities through monthly reports.
Part of the management process will include an evaluation of rental agreements and other expenditures. Burk said the Oklahoma City-area partners performed a review of property in Norman and were able to drop annual utilities 30 percent, and “saved them a ton of money.”
The contract approved last week specifies the company has been engaged to perform management services, including all leases, and to oversee the occupied retail areas of the mall; manage and maintain its common areas and sidewalks/parking lots; and manage, maintain and lease vacant areas, specifically excluding the former Sears and Dillard’s stores (Sears already is under lease to the FISTA).
The management company is responsible for providing and employing all personnel necessary to fulfill the requirements of its agreement. The company is to provide a “qualified, diligent and efficient professional” to serve as general manager to supervise all employees and be responsible for day-to-day fulfillment of services. The trust may request that the general manager be replaced without cause.
The firm is to have an emphasis on marketing utilization of the mall and attracting new tenants; retaining existing tenants; collecting and accounting for rents; providing security inside and outside the mall; abating hazardous conditions inside and outside; cleaning and maintaining all common areas, vacant areas and sidewalks/parking lots; and minimizing maintenance and operational costs. The trust authority will create an account for the purchase and procurement of supplies, materials and repairs from vendors needed to maintain areas.
The firm is responsible for budget management and if a source of revenue falls short, would be required to propose adjustments to bring the budget in line. They also must provide commercial general liability, commercial auto liability, and workers compensation and employers liability insurance.