The FISTA Development Trust Authority wants to amend its funding agreement with the City of Lawton, adding another $2 million to help cover the renovation costs for the former Sears store.
Trustees voted for that change Friday, but it is only a proposal at this point. The action will go to the City Council Tuesday, where members will decide whether they will amend an existing agreement for funding and limited support to provide additional money from the 2019 Capital Improvements Program. The funding will help cover the cost of converting the former retail store into work space for military defense contractors who work with Fort Sill and the two U.S. Army Cross-Functional Teams housed there.
Agreement would increase funding designated in the CIP to the FISTA conversion project and operations to $4,268,818, when it now is $2,268,818. The CIP also designates $1,558,887 to debt service, “collateral” for the annual debt payment the trust authority must make to repay the $14 million the City of Lawton paid when it became the owner of Central Mall (now Central Plaza) in January 2021. That debt payment money is available only if FISTA cannot cover the debt on its own, which hasn’t happened, said Deputy City Manager Richard Rogalski, explaining the authority has paid $1 million toward that debt in the past 12 months from money the mall generates.
Trust authority members said the $4.269 million in CIP funding would be applied to what their budget now reflects is $7.3 million in “leasehold improvements” at Sears. The difference between what would be available from the CIP and the projected cost would come from a $3.6 million construction loan also designated in the budget, said FISTA Strategic Operations Manager Teira Cole. But, trust authority members said they will continue searching for other funding sources to help cover the entire FISTA conversion project, noting they already are expecting $1 million in federal earmark funds.
The most immediate funding source remains the CIP, which contains a $29 million category for industrial development. While Rogalski agreed with the trust authority argument the $2 million will be a “draw down” as needed rather than a lump sum disbursement, he said it also is unlikely the trust authority would actually use all those funds in the fiscal year that ends June 30. But, making the decision now means the entire cost of the project will be in hand so work can begin.
“If you are successful chasing grants, you may never draw down,” he said.
Trust authority members said the need for more funding reflects today’s construction environment, where prices for materials and labor have skyrocketed in the wake of the COVID-19 pandemic. Matt Thomas, owner/president of the trust authority’s construction manager Smith & Pickel Construction, said labor costs associated with some construction have gone up 19 percent in the last year.
Trustee Ron Nance, who cast the only “no” vote Friday, said he remains concerned about overall costs associated with converting retail space to FISTA’s use. Nance said he is concerned because there was a specific amount of funding designated for the FISTA project out of the 2019 CIP.
“There were no extra funds beyond what we needed,” he said, adding there is other economic development work that needs consideration.
FISTA Development Trust Authority Chairman Clarence Fortney said Tucker Link and Knightsbridge Partners continue to search for potential funding for both FISTA and the Lawton Economic Development Corporation (LEDC). LEDC is continuing its work to entice new tenants to the industrial park west of Southwest 82nd Street, and members say that task is contingent upon infrastructure upgrades such as a new industrial bypass, improvements to existing roads, and installation of gas, water and sewer lines.
Nance, who also is an LEDC member, said he remains concerned about total available funding in the CIP’s economic development category and increasing construction costs for the FISTA, which already are more than expected. He said while he supports the FISTA, he also knows other economic entities need funding.