DUNCAN – The Duncan Area Economic Development Foundation (DAEDF) has received a favorable judgment in Stephens County District Court in a case concerning ownership of certain properties in Duncan. The court’s ruling has implications for the Chickasha Economic Development Council.
The summary judgment affirms DAEDF’s ownership of properties purchased using funds provided through contracts for services with the City of Duncan and the Duncan Economic Development Trust Authority (Trust).
The case centered around a series of contracts for services between DAEDF and the City and the Trust, dating back to 2003. These agreements outlined the provision of economic development services by DAEDF, with funding provided by the City and Trust from dedicated sales tax proceeds. The court’s judgment clarified the legal status of funds disbursed to DAEDF under these contracts and, consequently, the ownership of properties acquired by DAEDF.
Key aspects of the court’s Jan. 6 ruling include:
• Validation of contracts: The court upheld the validity and enforceability of the contracts for services between DAEDF and the Trust.
• Ownership of properties: The court explicitly declared that real estate purchased by DAEDF using funds paid by the City or Trust under the contracts for services, and held in DAEDF’s name, is owned by DAEDF. This includes the “Two Properties” (the Haulmark Property and the 48 acres) specifically addressed in the litigation.
The Haulmark Property is 13.49 acres the DAEDF purchased with $2,005,918 the Foundation received from the Trust in September 2008, the court ruling shows. The City and the Trust “were aware that DAEDF would own the Haulmark Property,” Stephens County Associate District Judge Dennis L.
Gay wrote.
The 48 acres were purchased by the DAEDF with $245,140 the Trust released to the DAEDF in March 2013, the court ruling relates. The City and the Trust “were aware that DAEDF would own the 48 Acres,” the judge wrote.
• DAEDF ownership of other properties: The court also confirmed DAEDF’s ownership of the “Four Properties” (the 3.59 acres, 4.88 acres, 1.91 acres, and the 6.7 acres). DAEDF “did not request nor use sales tax proceeds from the Trust to purchase the Four Properties,” the judge pointed out.
• Rejection of counterclaims: The court denied the cross motion of the defendants [Duncan Economic Development Trust Authority and the City of Duncan] for partial summary judgment, effectively rejecting their claims to ownership of the properties.
• Nonpublic funds: The court determined that funds appropriated and disbursed by the City or Trust to DAEDF for services rendered under the contracts for services ceased to be public funds upon disbursement. This clarifies the status of the funds used to purchase the properties in question.
“Once public funds are appropriated and disbursed to an entity other than a political subdivision of the State of Oklahoma, they cease to be public funds,” Judge Gay wrote. The DAEDF is an Oklahoma not-for-profit corporation and “is not a political subdivision of the State of Oklahoma,” the judge ruled.
Duncan Area EDF is ‘still in business’ The Duncan Area Economic Development Foundation previously received a percentage of Duncan’s sales tax. However, the Foundation’s contract with the City of Duncan ended July 31, 2024, according to President Lyle Roggow.
Furthermore, the ballot title on an election held last year to earmark a portion of the city sales tax to economic development listed the recipient as the “Duncan Area Economic Development Trust Authority.”
Consequently, the DAEDF no longer receives a portion of the city sales tax. Nevertheless, “We’re still in business,” Roggow told Southwest Ledger last Friday. “We’re self-sustaining,” surviving on rentals collected on “14 or 15 properties we own, manage and lease.” Buildings the DAEDF has constructed for tenants “are all full,” he said.
Board Chairman Bill Gossett said the DAEDF was “very pleased” with the decision issued by Judge Gay.
“This ruling confirms what we have maintained all along: that the properties in question were legally and properly acquired by DAEDF in accordance with our agreements with the City and the Trust. This decision allows us to move forward with our mission of promoting economic development in the Duncan area without any ambiguity regarding the ownership of our assets. We are committed to working with the City of Duncan to foster continued economic growth in our community.” The judge’s ruling “allows the organization to continue its work with clarity and confidence.”
The Duncan Area Economic Development Foundation is a nonprofit corporation dedicated to promoting economic growth and development in the Duncan area. DAEDF works to attract new businesses, support existing industries, and enhance the overall economic vitality of the region.
Chickasha EDC’s arrangement similar The Stephens County judicial decision appears to apply to circumstances that exist in Chickasha.
The Chickasha Economic Development Council (CEDC) has an annual contract with the Chickasha Industrial Authority (CIA) to perform economic development for the City of Chickasha.
“Once the CIA sends us a check, which they do monthly, that is for services rendered and is no longer public dollars,” EDC Director Jim Cowan told the Ledger on Feb. 6.
The one-year contract for Fiscal Year 2025, which ends June 30, calls for the CIA to pay the CEDC approximately $410,000 from Chickasha’s hotel/motel tax receipts. That money is required to be spent exclusively on tourism or economic development, Cowan related.
The latest contract increased the CIA’s annual payment to the CEDC by $50,000, all of which is dedicated to an increased advertising budget, he said.
The CEDC’s check register is published in the Chickasha City Council’s agenda. In addition, Cowan provides periodic reports to the CIA and to the City Council to “let them know this is what we’re doing and how we’re spending the money.”