FIRST IMPLEMENTATION AGREEMENT / MATHIS BROTHERS OKLAHOMA CITY, LLC

SUBJECT:

FIRST IMPLEMENTATION AGREEMENT WITH MATHIS BROTHERS OKLAHOMA CITY, LLC.

RECOMMENDATION:   That the Agency Board approve a First Implementation Agreement between the Agency and Mathis Brothers Oklahoma City, LLC

COUNCIL GOALS:   Invest In The Growth And Evolution Of The City’s Economy

• Maximize the economic and community benefits to be received from Ontario International Airport, Ontario Mills Mall, Ontario Convention Center and Ontario Center.

FISCAL IMPACT:   The First Implementation Agreement will reduce the City’s obligation to build infrastructure to preserve the project with a resulting cost savings of $225,000. Under the terms of the First Implementation Agreement, Mathis Brothers, LLC will buy 19.24 acres of land at $11.50 per square foot for the total land sale proceeds of approximately $9,638,085.60.

BACKGROUND:   On November 9, 2004, the Agency entered into a Disposition and Development Agreement (DDA) with Mathis Brothers Oklahoma City, LLC, a large retail furniture business. Under the terms of that agreement, Mathis was to purchase land from the Agency and develop a furniture store of not less than 320,000 square feet. The Agency was obligated to subdivide a larger parcel to create the site to be sold and to install certain infrastructure to serve the site, particularly the perimeter landscaping. Since that time, Mathis and City and Agency staff have been working to devise a design appropriate to the highly visible location and otherwise to implement the DDA.

The proposed First Implementation Agreement provides that Mathis will buy the entire 19+ acre site adjacent to the Founder’s Garden for the agreed-upon $11.50 per square foot. (The exact size of the site to be purchased by Mathis was not defined in the DDA.) The Agency’s obligation to build the perimeter landscaping (and to subdivide the site to create a parcel for Mathis) is being deleted, and the schedule is being amended to accommodate delays resulting from design issues and other delays.

Under the terms of the First Implementation Agreement, sale of the land would close no later than March 31, 2006, and the project would be complete within eighteen (18) months after that date. No other business points are modified, and the First Implementation Agreement will have no effect on the environment.

The principals of Mathis Brothers Oklahoma City, LLC are Bill Mathis and Larry Mathis.

STAFF MEMBER PRESENTING:   Jim Strodtbeck, Redevelopment Director