Saks Global May Be on the Hook to Repay Dallas for $5.25 Million Grant After Closing Downtown Neiman Marcus and Cityplace Offices
Economic Development
The City of Dallas could be in line to receive a significant sum of money back from Saks Global, the owner of Neiman Marcus, after the company announced it would be closing its downtown and Cityplace offices. The potential repayment is a result of a 2022 economic development grant deal that required Neiman Marcus to keep its flagship store downtown and headquarters in the Uptown area.
The Deal
In May 2022, the Dallas City Council approved a grant for Neiman Marcus in exchange for the luxury retailer’s commitment to maintaining its presence in the city. The deal required Neiman Marcus to remain in compliance with the terms of the agreement through December 2031. As part of the agreement, the company was required to provide annual reports to the city’s economic development office showing it was meeting the deal’s requirements.
Job Creation and Retention
The deal also had specific requirements related to job creation, retention, and wages. Neiman Marcus was required to create a minimum of 300 new jobs in Dallas by the end of December 2026 and retain a minimum of 1,100 jobs in the city through December 2023. The company was also required to pay a minimum wage of $17.82 to every employee and an average wage for headquarters workers of more than $49 an hour.
Saks Global’s Commitment
Dallas City Manager Kimberly Bizor Tolbert expressed disappointment in a statement on Tuesday that the deal could not be reached to keep the locations open. "This iconic brand has been part of the downtown landscape for over 100 years, and we will miss its presence," she said. "However, Saks Global’s commitment to upgrading Neiman Marcus’ NorthPark Center location allows for the Dallas-born brand to maintain its significant local presence and ongoing contribution to our City’s economic growth."
Potential Repayment
Rick Ericson, a city spokesperson, explained that the city is monitoring discussions between Neiman Marcus Group and its landlord, and if a default occurs, the city has the right to seek to recapture the permitting fee reimbursements paid to date and Neiman Marcus would forfeit all remaining incentives. The city paid $97,975.51 to NMG in 2023 to reimburse for permitting fees.
Neiman Marcus’ History in Dallas
Neiman Marcus was founded in Dallas in 1907 and opened its new headquarters in Cityplace Tower in 2023. Saks Global, the parent company of Saks Fifth Avenue, announced its purchase of Neiman Marcus last year, and the company now says it is closing both Dallas offices.
Conclusion
The potential repayment by Saks Global to the City of Dallas is a result of the company’s failure to meet the terms of the 2022 economic development grant deal. The city’s economic development office is monitoring the situation and may seek to recapture the permitting fee reimbursements paid to date if a default occurs. The City of Dallas has a strong interest in maintaining a vibrant and thriving business environment, and this situation highlights the importance of ensuring that companies meet their commitments to the community.
FAQs
Q: What is the potential amount Saks Global may be required to repay?
A: The amount is unclear, but it is possible that Saks Global may be required to repay some or all of the $5.25 million grant.
Q: Why did Saks Global close its downtown and Cityplace offices?
A: The company has not publicly stated the reason for closing its offices, but it is possible that it is part of a larger corporate restructuring effort.
Q: What is the history of Neiman Marcus in Dallas?
A: Neiman Marcus was founded in Dallas in 1907 and has a long history in the city. It has been a major part of the downtown landscape for over 100 years.
Q: What is the current status of the deal?
A: The deal is still in effect, and the city is monitoring the situation to ensure that Saks Global meets its obligations. If a default occurs, the city may seek to recapture the permitting fee reimbursements paid to date.
