The retail development that brought Academy Sports, Burke’s Outlet and other shopping destinations will begin phase two with a new road and an incoming grocery store.

ARDMORE – Motorists on Merrick Drive have navigated a traffic circle for several years despite the lack of a major intersection in the area. The Ardmore City Commission on Monday took a major step toward further development of Market Street at Ardmore that will see the Merrick Drive traffic circle connected to retail expansion from the south.

Monday’s commission vote will allocate $1.5 million for a road connecting Merrick Drive to the Market Street at Ardmore retail complex–and eventually connected with 12th Avenue Northwest–with the expectation that a grocery store be built in the expanding development.

City Manager Kevin Boatright told commissioners that the amendment to a larger agreement between the city and developer is the result of a traffic study done in the spring. That study found traffic concerns on 12th Avenue Northwest “that would be compounded with further development of the Market Street of Ardmore,” Boatright said on Monday.

The funds approved by the commission on Monday are not traditional sales tax funds but rather Tax Increment Finance funds. Development of the property dates back at least six years when agreements were made to create a small district for retail development and earmark taxes from that district into its own fund.

The World Bank describes tax increment financing like this as “pay as you go,” where private developers front capital for construction instead of local governments securing municipal bonds. Boatright said on Tuesday that the TIF revenue from ad valorem taxes at the Market Street development has exceeded expectations. Documents provided to the commission show county agencies are expected to receive more than $6.7 million in 2022 on property that was empty pasture at least six years ago.

Market Street Phase II, LLC will be responsible with other aspects of the development’s next phase as part of an agreement between the city and Texas-based development firm Burk Collins & Company, Ltd. About 50,000 square feet of retail space will also be constructed as part of the project.

Boatright said he and counterparts across Oklahoma have to use somewhat complex financing plans like TIF funds to help fund large retail developments.

“In Oklahoma, we’re the only state where municipalities only collect sales tax. So doing this TIF increment district, where you can actually use some property tax, that is a plus when you’re looking at trying to encourage commercial, retail growth in your community,” he said on Tuesday.

The $1.5 million is expected to pay for the road but Boatright’s letter to the commission suggested that other aspects of the connecting road from Merrick Drive to the northern terminus of Kiowa Street may not be initially covered under Monday’s agreement. Additional signals will likely be installed on 12th Avenue Northwest, and the portion of Kiowa Street will likely be widened, Boatright said.

The additional retail space addresses a shortfall of necessary grocery stores for the area, according to a 2017 comprehensive plan by the city’s planning commission. That plan showed Ardmore was experiencing at least a 48,000-square-foot deficiency in retail grocery space in 2015.