In an effort to drive sales tax revenue, the Edmond City Council approved a $17 million incentive project to attract retailers to Legacy at Covell, a development located on the northwest corner of Interstate 35 and Covell Road. Meanwhile, Mayor Mark Nash cut the length of a proposed two-year contract renewal in half for the controversial Edmond Transfer Station, asking for future “options” via a cost and benefit analysis.
City manager A.J. Krieger offered an explanation for the extension in line with his statement Friday, which kicked off brief discussion of an item originally listed under Monday’s general consent agenda, which meant the city council was not obligated to hold separate discussion of the item.
“For me, in my tenure, we’ve had the budget, we are beginning negotiations with police and firefighters, and then we had the previously voted on (incentive) item that were all in process, and I just wanted a little more time to fully research and fully consider the (trash transfer station) item,” Krieger said. “I asked for an extension, the ETS leadership proposed two years, and I agreed to it.”
Nash, who highlighted the consent agenda item for brief discussion at the meeting, concurred that he had no problem extending it temporarily.
“I know we are on a very short deadline to do anything about this. I believe that we need you and your team to dig very deeply and give us not only an analysis of cost and benefits. But I want options,” Nash said. “I want to know what all the options are.”
Nash recommended extending the Edmond Transfer Station agreement by one year instead of two, which council members approved 5-0.
Incentive looks to lure retailers, generate sales tax revenue
Within 12 to 14 months, one of the “primary anchor tenants” the city anticipates to open in the Legacy at Covell development is Whole Foods. Council members approved a site plan application for the upscale grocer in September.
An anchor tenant is one projected to draw customers from outside the community who may have not entered it otherwise. Anchor tenants are also intended to attract other retailers to occupy the surrounding storefronts. City leaders said Dick’s Sporting Goods will serve as the second anchor tenant for the Legacy at Covell development. Per the incentive agreement, surrounding tenants can leave if Whole Foods or Dick’s depart.
The “anchor” restaurants and retailers for the development include:
- Hobby Lobby;
- Whole Foods;
- Dick’s Sporting Goods;
- Texas Roadhouse;
- Cooper’s Hawk or Ruth’s Chris restaurants;
- PetSmart;
- Barnes and Noble (or substitute retailer);
- Shake Shack; and
- Chipotle.
Businesses that have already executed leases include:
- Whole Foods;
- Dick’s Sporting Goods;
- PetSmart;
- Hobby Lobby;
- La La Land Coffee;
- AT&T;
- Pei Wei;
- Chase Bank;
- Chipotle;
- Shake Shack;
- Texas Road House and;
- Mauve Nail Salon.
The $17 million incentive funding is to be pulled from the Edmond Electric reserve fund, which would leave a little more than $81 million in the account. Between nine targeted retailers, the developers can receive up to nearly $1.9 million from the city per tenant. Payments are to be made in two installments, with 50 percent to be allocated within the first 30 days a following a certificate of occupancy and the other installment available after a business has operated for 180 days.
Heather McDowell, the executive director of the Edmond Economic Development Authority, discussed how retail incentives are becoming common practice at a March 9 budget workshop.
“There was a time you probably didn’t have to incentivize retail. We’re not in that game anymore,” McDowell said. “Large anchor retailers require significant upfront capital investment costs, and it is now becoming common practice nationally for them to have some public support for them.”
Ward 4 Councilman Phil Fraim expressed his support for the incentive agreement during Monday night’s meeting.
“The incentive is to fill the gap, it’s not to enrich the tenant,” Fraim said. “We can slice and dice our budget umpteen times, our problem is on the revenue side. This is from nine priority tenants, $100 million in sales estimated, that’s 24 percent more than two of our larger activity retail centers in the city combined. That’s what this means in potential.”
Fraim said the development’s location will benefit the city as well, since it is expected to draw sales tax from highway travelers. He also highlighted the sales tax gained from construction materials, utility fees and property tax for Edmond Public Schools. The project is expected to generate enough revenue for the city to recoup its investment within four to five years.
“This is truly investing in ourselves,” Fraim said.
While the development is exciting for some who spoke to council, others in the community raised concerns.
Lori Dickinson-Black, an owner of Blue Bird Books, Cafe Evoke, Twisted Tree Bakery and La Loba, said that while she is not opposed to the Legacy at Covell development, she is concerned about Barnes and Noble being recruited as a retailer.
“Edmond already has three independent bookstores: Blue Bird Books, Best of Books and Archive Books. These stores didn’t arrive because of incentives or recruitment efforts,” Dickinson-Black said. “They exist because local entrepreneurs took risks, signed leases, invested their own capital (…) and show up every day to build something meaningful to the community.”
Dickinson-Black emphasized the role local bookstores play in Edmond and how the addition of a retailer “aggressively expanding” could shift the culture.
“More bookstores don’t create more business. More bookstores at this point in Edmond means someone is going out of business,” Dickinson-Black said. “The question becomes not just what we are adding, but what we may be affecting by bringing Barnes and Noble to the market.”
Discussion ensued over the possibility of pivoting to a different retailer, as Barnes and Noble is listed in the agreement with a possible substitute. Other residents also expressed their support for local bookstores, as did other council members, including Ward 2 Councilman Barry Moore.
“We are tap dancing around this Barnes and Noble,” Moore said. “Somebody stand up from the applicant side and just say that you’re going to draw a line through Barnes and Noble.”
After some back and forth between Moore and Todd McKinnis, the attorney for the developers, McKinnis offered two solutions. Neither could outright prevent a Barnes and Noble from opening in Edmond, however.
“Either we eliminate Barnes and Noble and we still have $17 million (to divide among eight tenants) or we say that we’ll come up with a substitute for Barnes and Noble,” McKinnis said. “We’ll try to come up with a number that equals $3.6 million in annual sales so we know we’re getting the same bargain.”
Edmond resident Taylor Wilson questioned overlooking existing empty spaces across the city, like along Broadway and 33rd Street, to invest in a new development.
“Strategy is saying, ‘New and shiny, we like you.'” Wilson said. “The 20 percent of unfilled buildings that exist in the city, we’ll work on you later because you’re not politically connected.”
Wilson also referred to the Edmond Conference Center’s default on its loan agreement with the city that was discussed in Thursday’s Finance Audit Committee meeting. The developers of Legacy at Covell are part owners of the conference center. Asked about the default, McKinnis said they have been trying to work it out with the city for two years.
“It goes back to all the tax that nobody expected us to have to pay,” McKinnis said. “It’s 10 years we’re supposed to be exempt, and it’s not. It’s worth going to the city saying, ‘Hey, we don’t need you to pay it all, but we need some sort of the offset.'”
Throughout discussion, Oklahoma City’s acquisition of the sporting goods store Scheels through an $8 million incentive came up, with some noting that Edmond’s past efforts to recruit that company were unsuccessful. However, unlike Oklahoma City, Edmond is offering payments for Legacy at Covell earlier in the life of the development rather than paying the developer from a sales tax percentage over time.
“You could do it like it was done before, on a percentage of sales tax,” Fraim said. “Because of that, it’s a greater number and a longer period of time. OK, it’s just the way it works.”
The council unanimously approved the incentive agreement, and Moore encouraged the developers to move with speed.
“It’s an eyesore out there, but in 12 to 14 months it won’t be,” Moore said. “In 12 to 14 months, somebody can get out there and buy a head of lettuce.”
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Edmond aims for the Olympics
The 2028 Olympics is set to be hosted in Los Angeles with the exception of two sports — canoe slalom and softball, both of which will be held in Oklahoma City. A new sport, beach-front sprinting, is set to enter the 2028 Olympic games, and Edmond is dashing to welcome the rowers at Arcadia Lake starting with the Route 66 Rowing Festival.
Mike Knopp, the founder of Riversport America and an Edmond Memorial High School graduate, explained beach-front sprinting.
“You start on the beach, you run through the sand, you jump in a boat, you row up 250 meters around buoys, make a hairpin turn, race back, jump out of the boat, run and dive into the finish line,” Knopp said. “It’s very fast paced. It’s two people, two athletes at once. There’s also pairs or doubles. And of course, there has not been a change in the sport of rowing in 100 years or more. So this is a very unique opportunity to have something completely new, and (it) puts us in a position to really help define how this can really be embraced by a community and in a festival format.”
The new festival will be sponsored by Visit Edmond, the city’s tourism arm, and it is expected to be an “economic stimulus” when the beach sprint national team attends in August and clinics are hosted through the summer to educate rowers across the region.
Council members expressed their excitement for the event.
“I’m getting good vibrations about this,” Moore said.
(Editor’s note: This article was updated at 12:30 p.m. Tuesday, March 24, to correct the location of Legacy at Covell to the northwest corner of I-35 and Covell Road.)
