McALESTER (AP) — Despite a recent eviction notice, owners of a publicly financed pet food company still plan to open this month.

The McAlester Foundation notified National Pet Products last month that its lease won’t be renewed when it expires Oct. 21, because the company has failed to live up to terms of a 2002 agreement.

National Pet Products’ owners received $250,000 in startup money from the city of McAlester and $439,520 from the Kiamichi Economic Development District of Oklahoma. The development district funds were part of a state appropriation to the Commerce Department.

All of that money was delivered to the company through the private McAlester Foundation, which is composed of local businessmen. The foundation added $100,000 of its own money.

In return, the plant’s owners promised to invest $1,378,500, with an extra $1,618,500 available for expansion and additions.

The plant’s majority owner, Steve Phipps, also agreed to have the plant finished by June 15, 2003, and to have 25 full-time employees by October 2004. Neither requirement was met.

The plant still hasn’t met the employment threshold, although co-owner Roy Hatridge said he expects that to be reached this month.

National Pet Foods’ attorney responded to the eviction notice with a letter containing a proposal.

Foundation Chairman Dick Dudley wouldn’t discuss the offer except to say that “they proposed to do some things that were outside the contract.”

Foundation members discussed the situation Tuesday, “and everybody had their own opinion” on whether to evict the plant or give the owners more time, Dudley said.

The foundation’s attorney responded either Thursday or Friday, Dudley said. He wouldn’t disclose the nature of the response, saying nothing was final.

Dudley also declined to release copies of the correspondence, even though the project benefited from public funding.

The pet food plant was created out of a warehouse in a depressed section of north McAlester.

The foundation bought the property in 2002 from then-state Sen. Gene Stipe for $190,000. A year earlier, the Pittsburg County assessor had set the property’s fair market value at $75,665.

Stipe’s brother, Francis, was and is a member of the foundation.

The foundation’s purchase of the property allowed Gene Stipe to repay a $50,000 loan that had been illegally funneled into the 1998 congressional campaign of Walt Roberts, The Oklahoman reported earlier this year.

McAlester city officials have requested a state audit to help determine how the city developed a $1 million budget shortfall in this fiscal year.

State Auditor and Inspector Jeff McMahan said he urged City Manager Susan Monroe to include the pet food plant deal as an area of focus.

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