The City Council will consider a proposal to buy Central Mall when members meet in special session today.
The 2 p.m. meeting is one of two today associated with a defense contractor technology park initially planned for placement in the old Sears department store on the west end of Central Mall. Both the council meeting at 2 p.m. and a meeting of the FISTA Development Trust Authority at 8 a.m. will contain items pertaining to that FIRES Innovation Science and Technology Accelerator (FISTA) that council members decided in September would be placed in the mall.
Council members created the FISTA Development Trust Authority in August to guide and manage the technology park that will house defense contractors associated with Fort Sill and the two U.S. Army Cross-Functional Teams housed there. Council members indicated in September wanted to lease the Sears store for that initial use, but also had an eye on a purchase agreement.
That $14.6 million purchase from Central Mall Lawton Realty Holding LLC is one of three agenda items the council will consider today. Members also will look at a resolution approving indebtedness by the trust authority of up to $18.895 million, selling sales tax bonds to cover that debt, and signing an agreement that will allow sales tax revenue generated by the 2019 Capital Improvements Program (CIP) to repay the bond debt.
While the lease agreement already had been agreed to — subject to due diligence to ensure the property meets FISTA needs — today will be the first public discussion of the plan to buy the entire mall. Funding would come from the $19 million category in the 2019 CIP designated for industrial economic development.
According to an agenda commentary for an item initiated by Ward 4 Councilman Jay Burk (the council’s representative on the nine-member trust authority), interest in the FISTA has been strong. In fact, it has been so strong city officials want an option for future expansion by purchasing the entire mall. While the mall still has tenants, Burk said at a council meeting earlier this week there is other vacant space that could be used.
Burk and Deputy City Manager Richard Rogalski said the idea is to blend FISTA tenants with existing businesses that could be used by FISTA employees.
“We want the mall to stay,” Rogalski said.
Rogalski said the FISTA idea started with using the old Sears area, but interest from would-be tenants has been so strong, officials began looking at other space, including the vacant Dillard’s department store. He said once those spaces are leased, there still is enough interest to warrant other sites, which is why city leaders are looking at the idea of buying the entire mall. While vacant space can be used by new defense contractors, existing tenants could stay and continue to pay rent to the new mall owners, while gaining customers from FISTA employees, said Burk.
“The mall is obviously struggling,” Rogalski said, of a situation common to malls across the nation. “This is a way we can reinvest in the mall, and the community reaps the benefit.
“Having retail and innovation (park) is huge. Otherwise, we’d have a 600,000 square foot empty building. What do we do then? We can invigorate it, bringing more people in there.”
Burk said existing tenants, particularly the food places, were a pleasant surprise to defense contractors who already have an interest in the FISTA.
And, there is a lot of interest. Burk said the trust authority already has letters of interest from 13 firms, while three or four tenants “are ready to sign leases today.”
Rogalski said there is another benefit: the mall parking lots become available for other uses. While the City of Lawton owns that parking space, it is leased to the owners of Central Mall. With the city as owner, it could look at renovations envisioned for years, such as an update along Southwest C Avenue.
Burk said council action today merely signals the city is interested in buying the property and starts the clock ticking on the 60-day due diligence process. The agreement specifies the city will provide an initial $250,000 escrow as an earnest money deposit. If it finds no problems during its due diligence, closing on the sale would occur between Nov. 16 and Dec. 31, when the balance of the $14.6 million purchase price is due.
Burk acknowledged the purchase is costly, but he noted the potential of paying back those costs from tenants who will have access to federal funds for renovating their space, from existing tenants who will continue to pay rent, and from the salaries high-tech employees will bring into the community. Burk said other communities are interested in the defense contractors that Lawton-Fort Sill is trying to lure, and in the two Cross-Functional Teams housed at Fort Sill.
“We’ve got to compete for these jobs,” he said, adding the initial arrival is expected to bring 100-150 high tech jobs with salaries of at least $100,000, jobs that will bring people to Lawton and keep its young people here. “This could change Lawton’s future and our entire community. This is a Goodyear event, as big as we had in the late ‘70s and early ‘80s.”
The sale price would be funded from the $18.895 million Sales Tax Revenue Note the council will consider in an earlier agenda item.
The entire proposal would allow the FISTA Development Trust Authority to incur indebtedness associated with its ordinance-defined role in development of the technology park. Trust authority members said earlier this month they were ready to hire an architect to handle the due diligence work, then design necessary renovations, but couldn’t take action until funding is available to them.
A third item to be considered by the council is an agreement for funding and limited support between the trust authority and the City of Lawton, for operation, management, administration, maintenance and equipping of the FISTA in the 2020-2021 year. The agreement would provide $4.175 million for those activities, with $3.9 million of that total allocated to a full build-out of the mall space and architectural fees.