Stalemate on NE Oklahoma City development coming to a head this week
Susan and Hank Binkowski, the couple behind Buy For Less, Uptown Markets and other groceries throughout the metro, admit this week is not starting off too well.
Saturday, the couple sent out a notice confirming the chain's original two northwest Oklahoma City stores are closing. They announced they were discontinuing print advertising. And two other stores are being flipped to a new concept with the Buy For Less name being replaced by Smart Saver.
One of those rebranded stores at NE 23 and Martin Luther King Avenue is part of a public-private development first announced three years ago, and on Saturday, Oklahoma City Councilman John Pettis, who represents the predominantly black ward, released his own thoughts on his public Facebook page.
“The Smart Saver Grocery is not what was promised to the community by the developer,” Pettis said. “The Smart Saver's name and size of store is not acceptable in my view. It's time for the developer to be honest about their true plans. I don't support their latest plans. We deserve better than what is now being planned by the developer.”
Susan Binkowski, Pettis concluded, “is in over her head.”
Susan Binkowski was stunned. But she knew the once-excited, cordial relationship with Pettis soured back in March. Contamination from a laundry and service stations at NE 23 and Martin Luther King had delayed work for two years. Costs were going up.
The tension coincides with the Binkowskis asking the city to increase its contribution, which is a mix of tax increment financing, tax credits and loans totaling at least $8.5 million. With phasing of the project and design in flux, even the numbers at this point are not set. The unfunded gap could hit $10 million.
And now the Binkowskis are facing an ultimatum from The Alliance for Economic Development of Oklahoma City at the behest of Pettis: Sell control of the property to the alliance to bring in another developer, or lose the city's assistance.
A meeting with Cathy O'Connor, president of the Alliance, and city finance officials is set for Wednesday. The deadline on the ultimatum is Thursday.
“His (Pettis) response, I believe, has to do with the frustration over things he wants to get done — things we want to get done,” Susan Binkowski said Monday. “It can be difficult to be sympathetic to someone else when we don't understand the circumstances they face. And I don't understand the concerns that can arise in the political conversation. I'm not sure there has been good dialogue about the progress that has been made and the good things that have happened the past couple years.”
So the two sides will meet. And what happens if the two sides can't come to a resolution? Susan Binkowski has no answer.
Pettis and Binkowski were both ready to do everything possible when they first announced the city would create a tax increment district and provide other assistance to the Binkowskis. Hank Binkowski runs the grocery operation. Susan Binkowski runs development and real estate for the chain.
The couple bought the 18,000-square-foot grocery five years ago, not long after leasing the store and turning into a Buy For Less. Comparable modern grocery stores top 50,000 square feet. Yet the NE 23 store, built in 1962, is the largest grocery in northeast Oklahoma City, which is classified as a food desert by the U.S. Department of Agriculture.
The Binkowskis visited with Pettis and city economic development officials. The plan to replace the store with a new grocery grew to a $30 million shopping center, King's Crossing, that would include a pharmacy, medical clinic, technical school, shops, restaurants and housing.
Pettis was still in his first term as the Ward 7 councilman and he was set to see a dream become a reality that started 20 years earlier with then Councilwoman Willa Johnson.
“This is history,” Pettis said as the deal was announced. “This is absolutely history. This shows development can happen within the inner-city of Oklahoma City.”
For Pettis, King's Crossing represented a big step forward for his community. The timeline, meanwhile, suggested the new store would be open by the end of his first term. Susan Binkowski, meanwhile, approached the project like an excited minister eager to heal the wounds of decades of discrimination brought about by retailers who located anywhere but in the black part of town.
“Food is our ministry,” Binkowski said. “Food is the place where community starts. People bond when they break bread together. We have the supreme blessing of being ‘community makers' because community happens when food shows up. And that is our dream for this location.”
The site was far more contaminated than expected. Such surprises were not unprecedented in a public-private venture.
Susan Binkowski promised to start construction just a few months after King's Crossing was announced. Three years later, a construction start seems as elusive as ever.
The Binkowskis have a diary of the work done to date since the project was announced in March 2013. The notes show a slow but steady effort to consolidate ownership of not just the shopping center but adjoining blighted and undeveloped areas. They spent $3.8 million on acquisition. They spent $1.5 million on architects and engineers, asbestos removal and demolition of blighted buildings to the east and north of the shopping center.
Notes show the Binkowskis' communications bouncing between the city's permit office, occasionally the Alliance, and until last March, Pettis.
It was last March that Pettis announced victory on another big goal — convincing Charlie Shadid, longtime owner of the Northeast Shopping Center — to redevelop the blighted property and bring in retail, including another grocery.
The Binkowskis didn't know about the deal, also involving public money, or plans for a grocery until reading about the project in The Oklahoman.
Words were exchanged. The Binkowskis saw a second grocery as threatening the performance of their plans for an Uptown Market. Pettis wanted economic revitalization throughout the northeast community.
As contamination and site-clearance costs escalated and plans were revised, Walgreens withdrew its interest from co-anchoring the project. The technical school withdrew as well.
Site plans and figures were revised. Meanwhile, Hank Binkowski was seeing a drop in sales at his stores in Norman and Yukon that he believed was linked to oil-field workers losing their jobs. He changed the stores to a new concept — Smart Saver — that lists products at wholesale price and then adds 10 percent at check out.
It's a simpler process, with less labor and more product on display. The change, he said, was a hit with shoppers and a new study showed two more stores, one in southeast Oklahoma City and the other at NE 23, should be changed next.
“The study that was provided to us this year says that an Uptown Market would be a loss for us,” Susan Binkowski said. “What changed was the original tenants and partnerships that helped relieve the financial burden of an expensive building — a high labor building — evaporated.”
The rebranding was done last week and King's Crossing, when built, was to be anchored by a new Smart Saver, not an Uptown Market. Pettis was not happy.
“The city has done everything we can to get it going,” Pettis said. “We have a developer who is over her head. We're tired of this being on again, off again, and on again, and off again. They keep telling the community it will be an Uptown, and now they're changing it to a Smart Saver. So it's OK for Edmond to get an Uptown, for The Village to get an Uptown, but no, for northeast Oklahoma City, it's now a Smart Saver.”
The Binkowskis respond that Smart Saver is not an insult, but rather an effort to best respond to the needs of their customers.
“We've highlighted produce, we've changed cases,” Hank Binkowski said. “We've changed almost the entire meat lineup. And all this was done just to buy us some more time before we build the new store. It is better lighted; it has new paint and a new brand.”
O'Connor is no stranger to tough redevelopment projects and has worked on deals ranging from redevelopment of the Skirvin Hilton Hotel, incentives that lured Bass Pro Shops to Lower Bricktown, and is currently overseeing efforts in Core to Shore and development of a convention hotel.
“I think we have to be open to considering the options,” O'Connor said. “Under one option, the city would buy all of the land the Binkowskis have. We would build the grocery store, similar with what we did with Bass Pro Shops. One very extreme option is we buy the property and the Binkowskis don't develop any of it and we issue a request for proposals.”
She admits, however, that option would be difficult because the Binkowskis already own and operate a grocery at the corner and the city would want it to stay open until a new one is built.
Susan Binkowski said she welcomes the deadline and believes all sides will be relieved to come up with a resolution. O'Connor believes a deal still can be struck that will allow both sides to move forward and complete King's Crossing.
“Doing these kinds of development deals is complicated and it does take a long time even in the best of circumstances,” O'Connor said. “I know the city is still committed to making something happen, and personally, I think the Buy For Less team is committed. I think it's just been a difficult project.”
Steve Lackmeyer is a reporter, columnist and author who started his career at The Oklahoman in 1990. Since then, he has won numerous awards for his coverage, which included the 1995 bombing of the Alfred P. Murrah Federal Building, the city's... Read more ›
Brianna Bailey joined The Oklahoman in January 2013 as a business writer. During her time at The Oklahoman, she has walked across Oklahoma City twice, once north-to-south down Western Avenue, and once east-to-west, tracing the old U.S. Route 66.... Read more ›