Broken Arrow City Council
Meeting of: 07-07-2015
To: Mayor and City Council
From: Office of the City Manager
Title:
title
Consideration, possible approval of and authorization to execute an Economic Development Agreement with RDS Properties II, LLC, for the purposes of providing economic development incentives for installation of a sprinkler system on property located at 207 South Main Street, Broken Arrow, Oklahoma
End
Background:
On June 14, 2015, Mr. Roy D. Sturgeon purchased the property located at 207 South Main Street in Broken Arrow Oklahoma. The property is currently owned by RDS Properties LLC, a company that Mr. Sturgeon owns. Mr. Sturgeon estimates he has invested $400,000.00 to purchase and restore the building. Mr. Sturgeon currently owns six buildings in the Rose District and all of the buildings are leased.
In November of 2013, the building at 207 South Main Street was leased to South Hampton LLC. It is currently operating as Stogies, a cocktail and cigar bar. Representatives of South Hampton LLC signed the lease under the assumption the domestic water line in the alley located east of Main Street was of sufficient size to use for a fire suppression system. Mr. Sturgeon invested an additional $45,000.00 to build a staircase and bathroom on the second floor of the building, and to separate the electric and natural gas serviced from the first and second floor to allow for an event space on the second floor. After moving into the first floor of the building, it was determined the City-owned 4-inch water line could not produce sufficient pressure to properly feed a fire suppression system. South Hampton LLC has been paying rent on the 2nd floor of the building for over a year and is unable to use the upstairs as an event space.
In 2015, the City of Broken Arrow replaced the 4-inch water line with an 8-inch water line which will provide sufficient water pressure and gallons per minute to meet the pressure and fire flow requirements for this occupancy. Mr. Sturgeon has agreed to pay the cost of connecting to the city’s new 8-inch water line and will install 75 lineal feet of new water line to the building, and construction of a shed on the back of the building to house the pump and other items necessary to complete the project.
On April 23, 2015, Mr. Larry R. Pennington, Broker for Allison and Associates Realtors made a presentation to the Broken Arrow Economic Development Board of Directors on behalf of Mr. Sturgeon. During the presentation, Mr. Pennington requested economic development assistance for the purposes of installing an above ground wet pipe fire sprinkler system for 207 South Main Street. At the conclusion of the presentation, BAEDC Board Members voted unanimously to recommend to the Downtown Advisory Board and the Broken Arrow City Council to provide up to $25,000.00 in economic development incentives for the purpose of installing a fire sprinkler system in 207 South Main Street. On June 9, 2015, Staff presented the request for economic incentives to the Downtown Advisory Board. DAB members voted 6-1 in favor of requesting City Council approve an economic development incentive for the installation of a sprinkler system on property located at 207 South Main Street, Broken Arrow, Oklahoma.
Cost: $25,000.00 to be paid from the City of Broken Arrow General Fund
Prepared By: Norman Stephens, Assistant to the City Manager / Economic Development Coordinator
Reviewed By: Finance Department
Legal Department
Assistant City Manager
Approved By: Russell M. Gale, Acting City Manager
Attachments: Information on Installation of Sprinkler System for South Main
Superior Fire Protection Bid Proposal
Tulsa County Tax Roll
Economic Development Agreement
Recommendation:
Approve the economic development agreement with RDS Properties II, LLC, and authorize its execution.