Von Maur misses sales goal for Oklahoma City incentive money
The owner of Quail Springs Mall had the help of a sales incentive deal with Oklahoma City worth up to $2 million to lure Iowa retailer Von Maur in 2014 but has yet to reap any of the promised money because the store has missed its sales goal.
In its first year of operation at Quail Springs Mall, Von Maur did not meet the required minimum sales thresholds for the mall owner, Chicago-based General Growth Properties Inc., to receive an incentive payment from Oklahoma City.
Melody Wright, chief operating officer for Von Maur, said that while sales at the Oklahoma City store have been affected by lower crude oil prices, the company has been pleased with the store's performance. Von Maur has even considering opening a second location in Oklahoma at some point in the future, she said.
"We hadn't been open that long when we kind of started to see some of the pressure of the oil industry," Wright said. "We still feel really good about Oklahoma City and we still think the future is just as bright as it was a year and a half ago."
Von Maur's stores in the Upper Midwest experienced something similar during the last downturn of the automotive industry about five years ago, Wright said. Those stores remain open, she said.
“We are very committed for the long term,” Wright said. “We are a family-owned, privately held company and we don't have to answer to Wall Street or analysts to try and squeeze out every last ounce of profitability.”
As part of the incentive deal with Oklahoma City, Von Maur was required to reach gross taxable sales of $27.5 million in its first year of operation at Quail Springs Mall for its landlord, General Growth Properties, to receive an incentive payment from the city of 0.5 percent of gross taxable sales, up to $225,000.
Although privately held Von Maur, based in Davenport, Iowa, does not disclose its sales figures, General Growth has yet to receive any money from the city, according to an open records request. The Quail Springs Von Maur store was initially projected to generate as much as $40 million in annual sales, according to city documents.
As part of its deal with Oklahoma City, General Growth agreed to spend at least $15 million buying and remodeling a former Sears store at Quail Springs to lure Von Maur to the city. County records show $8 million was spent purchasing the property from Sears before extensive renovations.
While the Von Maur store has not reached sales numbers for its landlord to receive the incentives, the city still is reaping benefits, including the investment General Growth made at the mall and the new sales tax revenue and jobs the store has created, said Brent Bryant, economic development program manager for Oklahoma City.
Retail sales are down across Oklahoma City, in part due to a downtown in the local economy tied to low crude oil prices, Bryant said.
“We are seeing a decline in sales tax revenue throughout the city and that's part of it,” Bryant said.
General Growth declined to comment on the specifics of its sales tax rebate agreement with Oklahoma City, but the company said it was pleased with its partnership with Von Maur.
“Von Maur is a terrific addition to Quail Springs and we consider our partnership with them strong and for the long term,” Kevin Berry, a spokesman for General Growth Properties, said in an email.
General Growth ac- quired the former Sears store at Quail Springs Mall in 2012 after Sears closed the store.
Berry said the mall company bought 11 former Sears stores and has redeveloped all of them.
For the remainder of its 10-year incentive agreement with Oklahoma City, General Growth Properties can receive incentive payments from the city only if gross taxable sales at Von Maur reach at least $30 million in a year. The deal has an annual cap on incentive payments to the mall that climbs to $275,000 by year eight of the agreement.