CHICKASHA – Payment of a revised Central Business District (CBD) building grant to Chet Hitt for partial reimbursement of expenses he incurred renovating the Savoy 1902 hotel depleted the last of the funds.
The City Council voted – overwhelmingly but not unanimously – to pay the higher bill. A couple of the councilors were unhappy upon learning that the grant would have to be closed out with supplemental tax revenue from a different economic development fund.
CBD grant applicants have been reimbursed $1 for every $3 of private money invested in rehabilitation of property located between First and Seventh streets and Kansas and Choctaw avenues if the property is used for retail trade that produces sales taxes or use taxes for the City of Chickasha. Reimbursement initially was calculated at $20 per square foot but later was raised to $25 per square foot, said Jim Cowan, director of the Chickasha Economic Development Council.
The EDC endorsed a $266,666 CBD grant to Hitt on Nov. 14, 2023, for restoration work that had been performed in the abandoned hotel at 102 W. Chickasha Avenue. The City Council gave its preliminary approval to that application on Dec.18, 2023.
Ten months later, on Oct. 8, 2024, the EDC gave its blessing to an amended application for a $388,600 CBD grant after Hitt showed that he had renovated even more floor space in the 123-year-old hotel than he first anticipated.
The revised Savoy CBD grant came before the City Council for final approval on May 5 – and generated some fiery rhetoric. CBD grants paid from 7/32% tax Downtown economic development grants were derived from the proceeds remaining from a special seven thirty-seconds of one percent (7/32%) excise tax that Chickasha voters approved in 2011 for “economic development purposes” over a period of five years: July 1, 2011, through June 30, 2016.
The CBD grant program was launched on Dec. 3, 2018, with $1.2 million from that levy, records indicate. The program was administered by the EDC but the City Council had final approval over the grants.
By July 2023, the City of Chickasha had distributed $791,957 in grant funds and the private sector had spent $3,343,279 on downtown buildings. That means $4.22 in private funds were spent on downtown building rehab projects for every $1 in reimbursement from the public grants.
Recipients of CBD redevelopment grants included Brandi’s Bar & Grill, Canadian River Brewing Co., The Flower Shop Winery and Pizzeria, Crazy 8 Café, Alora Real Estate, Great Plains Land & Cattle, Legends Bicycles, The Gathering, Rock Island Candy Co., Perrefitte Home & Gifts, the Petroleum Building, and Brink’s Downtown Boutique.
The Chickasha Hotel underwent a $5.2 million overhaul financed by First National Bank and Trust Co. before the downtown business grant program started, Cowan related. That project was financed in part from federal tax credits awarded because the building, located at 102 N. Second Street, provides affordable housing and is deemed to be a historic structure. Today its 32 rooms house low-income individuals, and the ground floor of the building is occupied by local law firms.
1/4% sales tax paid Savoy grant overrun Hitt’s revised grant for the Savoy 1902 drained the last of the CBD grant funds but fell about $122,000 short, ledgers reflect. The overrun was paid with proceeds from a quarter- cent economic development sales tax that was in effect for five years: April 1, 2006, through March 31, 2011.
The purpose of the quarter- cent levy was “to create jobs, to attract business and industry, to construct or improve industrial parks, to promote Chickasha as a site for new industries and businesses and to provide incentives for existing businesses and industries to add jobs…” “Shame on the EDC and on the CIA [Chickasha Industrial Authority] for not putting a stop to it,” Councilman John Smith said. “But the buck stops with the Chickasha City Council. We never should have gone past the $1.2 million.” ( Note: The CIA has had no role in the downtown business redevelopment grant program.)
City officials said that until Jim Crosby became city manager last November, they had no solid knowledge of how much money remained in the Central Business District Building Grant fund. After former city manager Keith Johnson resigned, Crosby ordered a report about CEDC redevelopment incentives.
“That was the first report ever presented to the council showing what had been spent over the years,” Mayor Zach Grayson said. “Until now, the amount of money spent on those grants was not tracked closely.”
Furthermore, “With the momentum we had, it was money well spent,” Grayson asserted. Chickasha was “vibrant because of it. We’re reaping rewards” from those grants.
Economic development “is not a stagnant creature,” said newly elected Councilman Clark Southard, a self-employed economic development consultant for two decades. “Our community is on a roll. We can’t strangle something that’s working. We need to look forward.”
Councilman Charlie Burruss asked why the list of expenses Hitt submitted in his grant application included some tools, such as a welder.
“I hired kids from the Canadian Valley Technology Center campus in Chickasha to help build the window frames in the Savoy versus hiring professionals,” Hitt replied.
Further, he used primarily local labor during the hotel renovation. As proof, he, submitted to the CEDC and the City Council photocopies of the Form 1099s he filed with the federal government, which are used to report payments to independent contractors. Hitt to council: ‘I’ve paid my way’ Hitt told Southwest Ledger that he invested approximately $1.4 million to renovate the Savoy. And he informed the City Council that he had to pay $64,000 to construct a water line and $76,000 to install a f ire sprinkler system in a restaurant he renovated at 121 W. Chickasha Ave. that has since been renamed The Outpost.
“I’ve paid my way,” he said. In addition, Hitt initially planned to submit a grant application for $52,500 for partial reimbursement on improvements he made to the Mill Building across the street from the Savoy, but ultimately he opted not to.
Hitt’s application for the revised $388,600 CBD building redevelopment grant for the Savoy 1902 was approved by the City Council on a vote of 7-1-1. Smith abstained and Burruss voted no.