This series is an in-depth look at how the CDA helped grow the O, and how its board has multiple connections to Oxford Mayor Leon Smith.
OXFORD — Five years ago, there was little but an overgrown wooded area south of Interstate 20's exit 188.
Today the once-empty space is dominated by the city's new economic engine, the Oxford Exchange, with its rows of name-brand, big-box retailers and parking lots full of cars driven by shoppers whose money fills the city's swelling coffers.
The transformation was accomplished in part using a little-known board called the Commercial Development Authority. Millions of dollars changed hands between the city government, developers, contractors and the secretive, city-appointed board that has awarded no-bid contracts since 1994. Some of that money came from the city's taxpayers. City officials say taxpayers received a large return on their investment from sales taxes.
The operation of Oxford's CDA, which is responsible for tremendous retail development in the city, is also a web of interconnections with, and campaign contributions to, Mayor Leon Smith, the powerful seven-term mayor who has guided the city's development.
Understanding that web requires understanding how this public board operates.
In the past, local governments could not give something of value to private businesses. The state constitution wouldn't allow it. But cities could legally create a CDA board for this purpose.
A CDA has the ability to do what no city government could do on its own: lure businesses using taxpayer money and assets.
Residents can see its handiwork; the Wal-Mart Supercenter, which opened in 1996, and Oxford Exchange, opened in 2006, are both CDA projects. The CDA developed the properties for these businesses using a combination of borrowed money, money made from the sale of city-owned property, and city money.
In a months-long investigation, The Star has examined numerous public documents revealing how the CDA spends the public's money. The board has never invited companies to bid on a contract, according to the City Clerk's office. But it has awarded nearly $9 million worth of them since 1994.
Smith said the CDA gives the city an advantage.
"When you get one of those, you can move as fast as (commercial prospects) want you to," he said. "It helps get them moving quicker."
Smith added that the CDA is a legal board.
Under the radar
The CDA of Oxford has been the silent partner in the city's rapid growth into Calhoun County's retail hub. It has flown largely under the radar, partly due to a lack of coverage by local media, and partly due to the way the five-member board meets — called together only to deal with matters as they arise.
In these meetings, Oxford's CDA has awarded millions in non-competitive contracts. The same state law that enabled its creation also makes it exempt from state bid laws.
In a normal bid process, bidders compete to give the city the best price for completing a large project, like Oxford's proposed multi-million-dollar sports complex. By law and with few exceptions, the city must choose the lowest bidder. But the CDA is free to hire whatever company the board sees fit.
CDA members are appointed by the City Council. City Attorney John Phillips, who is closely involved with the CDA, said the members are chosen via an application process. Smith also indicated he has a role in that process, saying, "I want business people on that board — bankers and lawyers."
He said if someone was interested in serving on the board, he might make a recommendation.
Former Council President Mike Henderson said while the City Council does appoint members, when he served the council was largely out of the loop on what the CDA did.
"We just always tried to appoint good local business people," he said. "But the actual operations of the CDA were on a need-to-know-only basis."
At a CDA board meeting Jan. 28 at City Hall, board members dealt with engineering contracts to develop property behind the Oxford Exchange.
Three of the board members are bankers. The board's chairman, Dwight Rice, is an Oxford attorney. Rice said at that meeting all questions about the CDA should be directed to the city attorney, Phillips.
"We're not going to be privy, to be able to fully answer those," Rice said.
CDA member Keith McCullough, who works in senior lending at Noble Bank, used the board's agenda that day as an illustration of what the CDA does.
"I think we work hand-in-hand with the City Council (and mayor)," he said. "We've got some engineering that needs to be done very quickly and time is of the essence here, and what this board does is help facilitate that in a quick manner."
The largest of the CDA's contracts was $6 million awarded around 2005 to Birmingham-based Saiia Construction, for grading and infrastructure work at the Oxford Exchange site.
A director of business development with Saiia declined to comment for this story.
The second-largest contract, a $2.6 million contract awarded in 2008 to Oxford-based Taylor Corp., was for grading work for a Sam's Club at The Exchange.
Attempts to reach Taylor Corp. to comment for this story were unsuccessful.
The CDA paid for the $6 million contract with Saiia by borrowing $4 million through a bond issue and paying an additional $2 million out of the city's general fund, according to City Finance Director Alton Craft.
Craft said the developers, Georgia-based Abernathy and Timberlake, purchased the developed property from the city for $8.8 million, so the city made more than $2 million on the deal.
The CDA chairman and the mayor in 2004 both signed an official statement on a $4 million bond that was originally intended to develop property across from the Wal-Mart. Craft said it was the CDA's bond and the city agreed to pay back the money. That proposed project fell through. The council transferred the bulk of the money over to the Exchange project in 2005, city records show.
The CDA paid $1.7 million of the $2.6 million Taylor Corp. contract using money from the sale of more Oxford Exchange property to Abernathy and Timberlake. The city kicked in an additional $805,788.50, according to Phillips and CDA documents.
Smith recommended the CDA to other cities as a tool that can move their communities forward.
"I think that's a great way to go," he said.
Timeline of CDA development
Nov. 1994: Oxford City Council authorizes the creation of CDA.
April 1995: CDA is authorized to sell bonds to raise $500,000 for Wal-Mart Supercenter development.
August 1995: CDA authorizes $192,000 contract to Brown Brothers Grading to prepare Wal-Mart site.
March 1996: Wal-Mart opens.
Nov. 13, 2003: City of Oxford, Oxford Water Works and Sewer Board and Georgia-based Abernathy and Timberlake enter into option agreement for Oxford Exchange.
May 16, 2005: CDA enters $6 million construction contract with Birmingham-based Saiia Construction to develop Exchange site.
May 18, 2005: City officials announce Abernathy and Timberlake will buy 70 acres of a 272-acre tract to build the Exchange.
July 2006: First stores open at the Exchange.
Sept. 2008: CDA signs agreement to give a $2.6 million contract to prepare site for a Sam's Club at the Exchange.
Dec. 23, 2008: Oxford Mayor Leon Smith tells City Council about Sam's Club development. The store is expected to open by 2010.
Sources: Newspaper archives, CDA contracts and CDA officials.