Edmond council declines to approve amended Festival Marketplace ground lease; continues termination talks

The Edmond City Council voted against approving a second amended and restated ground lease for the Festival Marketplace and agreed to continue related action so the city and the developer can pursue a mutual termination in writing.

The vote came after the city received a letter from the developer earlier in the day asking that the amended lease not move forward. Council members debated whether to approve the lease extension that had been before the council and then considered how to document a mutual termination that the developer’s attorney said would ‘‘allow both parties to move forward without further encumbrances.’’

At the meeting, the council first took up item 10B1, described on the agenda as consideration of the second amended and restated Festival Marketplace ground lease by and between the City of Edmond and Lap 7 Development. A motion on that item failed (no approval recorded; final tally reported as four no votes and one abstention). City staff then explained that a vote not to approve an extension would not itself terminate the existing ground lease; rather, termination would require separate action or a mutual release drafted by the parties.

Developer counsel suggested the cleanest path would be a mutual waiver and release executed by both sides. City staff told the council that such a mutual termination document had not been drafted and therefore was not on the current agenda. Staff advised the council that, if desired, the parties could return a mutual termination to the council for formal action at a later meeting.

A member of the public, Lydia Lee of Ward 3, urged the council to consider whether rent payments were current and whether $60,000 of EEDA funds had been spent. Staff responded that the EEDA reimbursement funds had not been spent and that the first rent payment had been paid; a second payment is due under the contract schedule and staff would research the exact timing and work with the city attorney on details. The developer’s counsel said he would work with the city attorney to prepare a mutual release if the council wanted one.

Following that discussion, the council continued item 10B2, which addresses remedies and possible termination procedures, so the parties could prepare a mutual termination document. The council voted to continue the item and return with the mutual termination (or related items) at the next meeting; that continuance passed on a 5-0 vote.

Council members and staff repeatedly emphasized that continuing the item would preserve options for a mutual release and allow staff and counsel to finalize language for presentation to the council. No mutual termination agreement was executed at the meeting, and the city and the developer agreed to continue working toward a written mutual release to be brought back to the council.

The council also discussed potential financial and administrative follow-ups: confirming rent schedules, documenting whether any EEDA reimbursement had been expended, and preparing any required release language. Staff said the EEDA grant had been structured as a reimbursement and no EEDA funds had been spent to date.

The council took no action to approve an amended ground lease and instead set the termination matter for further action at the next meeting.

Council action tally: the motion to approve the second amended and restated ground lease failed (tally reported as 4 no, 0 yes, 1 abstain). The motion to continue item 10B2 to allow a mutual termination to be prepared passed 5-0.