, Muskogee, OK

February 18, 2013

City asks Foundation for land loan of $1.1M

Board to consider request today

By D.E. Smoot
Phoenix Staff Writer

— Officials are looking toward the City of Muskogee Foundation for funding of the acquisition of property being eyed for commercial development.

The Foundation’s board will have a special meeting Monday to consider a $1.1 million loan request. If the loan is approved, the Muskogee Redevelopment Authority — a city trust that has been dormant since 2004 — would use the money to buy property for retail development.

“It’s not the city that is trying to do the expansion, but we want to do what we can to facilitate future growth,” Mayor Bob Coburn said. “Our focus on retail growth is driven by our city budget — we have two sources of revenue: sales tax collections, and fines and fees. Let’s not leave any stone unturned when it comes to increasing our sales tax collections.”

Coburn and other city officials declined to identify the parcel — or parcels — being considered for purchase, describing it only as “real property located in the (city’s) northwest corridor.” The amount of funding requested, however, is close to the appraised value of a six-acre county-owned tract at the southwest corner of U.S. 69 and West Shawnee Bypass.

District 1 Commissioner Gene Wallace said city officials have inquired “about the value” of that parcel. Coburn said that although the loan amount requested is curiously close to the $1.03 million appraised value of the county-owned tract, he was not at liberty to comment further.

City Attorney Roy Tucker said the money from the loan, if it is approved, would be funneled through the Muskogee Redevelopment Authority. The authority, which is made up of city councilors, can engage in transactions that city government would be unable to do otherwise — such as incurring debt and buying, leasing or selling property, for example.

Tucker said the authority has not met since 2004, but he anticipates it will begin meeting regularly in light of the proposed real estate acquisition. Coburn said the authority, which according to the trust indenture names him its chairman, would serve as a vehicle to promote economic growth.

“It’s not that we want to be the middle man,” Coburn said about the authority’s participation in the proposed real estate transaction and other potential deals. “This is a way to help put together larger parcels of land to a point where they can be developed and make it less difficult for the developers.”

Coburn said retail development is something never done without “some facilitation or incentive from the city.” Although Muskogee’s sales tax revenue has remained relatively flat, other municipalities have seen annual growth of 5 percent to 7 percent in their collections.

“If Muskogee is going to grow, we have to do the things necessary to facilitate that growth,” Coburn said. “That is not to say we are going to be the developers, but we are going to help in whatever way we can to facilitate it.”

Right now those efforts include the request for the $1.1 million loan from the City of Muskogee Foundation. City councilors formed the nonprofit corporation in 2008 to develop, support and promote programs designed to improve the quality of life in Muskogee.

The Foundation is funded by the proceeds from the 40-year lease of EASTAR Health System, formerly Muskogee Regional Medical Center, to Capella Healthcare. A portion of the Foundation’s returns on the investment of that money is used to fund grants designed to promote its mission.

Coburn said the request for Foundation funds is a legitimate use that promotes the nonprofit’s goal to move the city forward. Expenditures must be done responsibly and with caution, he said.

City Manager Greg Buckley said the terms of the loan, if approved, and its repayment were unknown Friday. But he said the board members, including himself, appear to be willing to work with the city while addressing those issues.

“We are grateful for the Foundation’s willingness to be flexible and open to some alternative funding options,” Buckley said. “This gives us the opportunity to move forward the potential development of this project.”

The Foundation board will meet at 4 p.m. Monday at the Nonprofit Resource Center, 207 N. Second St.

Reach D.E. Smoot at (918) 684-2901 or