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Dick's plans Muskogee closure

Dick’s Sporting Goods reportedly plans to close its Muskogee store upon the conclusion of its third holiday shopping season at Three Rivers Plaza.

Mayor Bob Coburn said he received information on Wednesday indicating local employees of the sporting goods store have been told about the closure. Dick’s employees, he said, “were notified that the store would be closing on Jan. 6.”

“The store, located in the Three Rivers Plaza, was part of the first phase of the urban renewal project,” Coburn said. “While this is certainly disappointing, the city will be actively engaged with the developer of Three Rivers Plaza to ensure the ongoing growth and development of the urban renewal area.”

Inquiries about the closure initiated Monday by the Phoenix have yielded no response from officials at the Pittsburgh-based company’s corporate headquarters. Reasons for its departure from the Muskogee market remain unclear, but a federal judge’s ruling issued late September in a contractual dispute between the tenant and property management company may provide some clues.

Three RP Limited Partnership filed a lawsuit in January seeking a declaratory judgment regarding its interpretation of the “initial co-tenancy requirement” included in the parties’ lease agreement. Three RP was assigned the lease by the Tulsa-based Vector Securities Corp., which developed Three Rivers Plaza.

Lawyers representing the sporting goods store state in court documents that co-tenancy provisions provide assurance there will be “a critical mass of key tenants” and “sufficient population of other retailers” open — or ready to open — for business when the tenant opened its doors to customers. Such clauses often provide for reduced rental rates if occupancy rates fall short of the requirement.

The co-tenancy clause in this lease required that TJ Maxx and ULTA Salon and Cosmetics “be open ..., fully staffed, stocked and” operating when Dick’s opened its doors in October 2015. It also required that 70 percent of the “leasable floor area” — with some allowable exclusions — be occupied and open for business at a specified time.

At the center of the dispute was how the parties calculated the “leasable floor area” and how much of that area could be excluded when determining whether the 70 percent requirement had been met. Court documents indicate Dick’s was able to occupy its Muskogee storefront at a discounted rate until the dispute was settled and the occupancy rate attained, which the Three RP expected to be met by this past April.

Three RP’s interpretation of the clause, according to documents filed in the lawsuit, resulted with a “leasable floor area” significantly smaller than what Dick’s had calculated. U.S. District Judge James H. Payne ruled in favor of the tenant’s calculation, which appears to have had the effect of extending the period for which the tenant was able to avoid rent that otherwise would be due pursuant to terms of the lease.

Rickey Hayes of Retail Attraction, the city’s retail development consultant, expressed some doubt about whether the closure would occur in January. Hayes predicted the closure, if it occurs, would have no impact on the city’s urban renewal and retail development efforts.

“Actually we may be able to get a tenant in there that fits the market better,” Hayes said. “The last time I talked to the developer, he was just to figure out what they were going to do so he could go out and get somebody to backfill it.”

Three RP representatives were unavailable for comment.
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