MuskogeePhoenix.com, Muskogee, OK

Local News

June 24, 2014

Deal promises $815K to QuikTrip

Council OKs incentives for costs of drainage, road work

QuikTrip will be eligible for cash incentives worth up to $815,000 pursuant to an agreement approved Monday by city councilors.

The incentive package will be used to reimburse the Tulsa company for costs associated with drainage issues and road improvements. QuikTrip plans to develop the southwest corner of the U.S. 69 and Shawnee Bypass intersection.

The incentive will drain $315,000 from the city’s economic development opportunity fund and $500,000 from the Muskogee Industrial Trust. The incentive, according to the agreement, is being considered as an inducement of QuikTrip’s development plans.

City Attorney Roy Tucker said QuikTrip officials determined development of the site would be cost-prohibitive after learning that drainage from the area was subject to the Clean Water Act. The privately held company, which offered to buy the land at a price below the appraised value, subsequently sought the cash incentive.

“When we learned that it contained waters of the United States, it was quite a surprise to all of us,” Tucker said, noting that the discovery came after the purchase price was set by contract. “We learned that ... would make it one of the most expensive sites they had ever built, so they reached out to the city to see if there were any incentives available.”

Pursuant to the agreement, city officials promise to reimburse QuikTrip for “costs it incurs in connection with the design and construction of roadway and drainage improvements.” QuikTrip, in turn, promises to build its store at the designated site along with roadway and drainage infrastructure to accommodate pedestrian and auto traffic.

Funding from the city’s economic development opportunity fund is derived from revenue generated by purchases of out-of-state goods for in-state consumption or use. Funding from the Muskogee Industrial Authority is derived from annual administrative fees assessed on projects and bonds administered by the authority.

A 2011 ordinance that created the city’s economic development fund and opportunity account requires at least one of three factors be present before the account can be tapped. Tucker said the QuikTrip project meets all three criteria: Funding will be used to assist a “the development of a high-impact business project” in an area “targeted for development ... that will make a unique or unequaled contribution” to the city’s development efforts.

“This is money we would have had to expend whether it was QuikTrip or Company XYZ, is that correct?” Ward II Councilor James Gulley said. “I just want to make clear this is something we were going to have to do to develop that corner.”

The land QuikTrip plans to develop was taken by eminent domain by the county for the state as part of a planned expansion of the intersection. District 1 Commissioner Gene Wallace said the land has sat idle for more than 55 years.

After QuikTrip expressed an interest in the location, county commissioners struck a deal in March 2013 with the Muskogee Redevelopment Authority to sell a 6-acre tract on the southeast corner of the intersection at 80 percent of its appraised value. City councilors, who make up the authority board, agreed to sell the land to QuikTrip at the discounted price.

Court-appointed appraisers set the value of that property at $4 a square foot, or just more than $1.03 million, and the Muskogee Redevelopment Authority bought it for $826,596. City councilors later approved a deal to convey title to QuikTrip for the same price.

QuikTrip officials said the company plans to build a 5,700-square-foot travel center that incorporates the company’s third-generation design. When the deal was announced more than a year ago, QuikTrip officials said the Muskogee store would be the second of a prototype built in South Carolina.

Mike Thornbrugh, a QuikTrip spokesman, said the store would require 16 to 18 employees upon opening, and other workers could be added later. QuikTrip managers typically are paid about $70,000 per year, with salaries for assistant managers in the low $40,000 range.

Reach D.E. Smoot at (918) 684-2901 or dsmoot@muskogeephoenix.com.

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