OG&E Energy Center

[Just the facts]

Was SC going to create more tax revenue or just needing to take money without creating any?

Is Clayco going to create more tax revenue or just needing to take money without creating any?

[Rover]

Yes. The $530 development creates significant tax dollars. Keeping the SC might have been a neat thing to do, but never would create the same....not even close.

[Spartan]

Was SC going to create more tax revenue or just needing to take money without creating any?

Well once you get into TIF Land, tax revenue is moot. How is that even a relevant argument?

OG+E Center is not about what's good for OKC's tax rolls, but rather a historic chance to elevate the development possibilities in our community. Let's not mistake those two things and think we can accomplish both, that's all I am saying.

[Laramie]

As the city grows; so grows the sales tax revenue. We need to get any help we can from the Federal Government in terms of grants; assistance from ODOT along with whatever is available. The developers are going to milk the TIF cow for their rebate. Our corporate & industrial growth will be the springboard for job development.

Metropolitan population growth is right at 425 per week which is modest growth for a metro of our size. When we exceed 750 residents per week of sustained growth, we need to be prepared for the 'boom.' We should see signs of a 'boom' sometime around 2017.

The real focus will be housing, city services (utilities, fire, safety) & schools.

[bchris02]

This thread is the epitome of OKCTalk group think.

Agreed.

People should research the issue and make sure they are informed of the facts and then decide for themselves.

As Spartan said this is a historic chance for OKC to raise the development bar.

[ljbab728]

This analysis by Steve is probably the best I've seen, for those who are able to see all of it.

http://www.oklahoman.com/article/5370467?embargo=1

[Bellaboo]

Very clear and easy to understand article about TIF districts. Everyone needs to read this.

[Pete]

This analysis by Steve is probably the best I've seen, for those who are able to see all of it.

http://www.oklahoman.com/article/5370467?embargo=1

Article says "the percentage of increment actually falls within the amount typically sought by developers".

We already know this is not true in Oklahoma City so what is the source of this claim?

[Just the facts]

As the city grows; so grows the sales tax revenue.

Not if we give those tax dollar back to the developers up front - for 20 years. Let's say some company does relocate to OKC to fill the second tower - we are going to pay them for the jobs also via OKC incentive program and the State's Quality Jobs. When do we say enough is enough? A lot of people have the mentality of "just one more time". Well every time is just one more time.

[Just the facts]

I didn't see an answer to a previous question and I am really curious about it. Since OKC doesn't collect property taxes (Oklahoma County does) - where is OKC going to get the money to reimburse Clayco their property taxes? For that matter, where is OKC getting the money to pay back the Devon loan?

[catcherinthewry]

Article says "the percentage of increment actually falls within the amount typically sought by developers".

We already know this is not true in Oklahoma City so what is the source of this claim?

I'm guessing that what is "sought" by developers and what is "received" are two different amounts. I also suspect that Clayco won't receive the entire amount that they are seeking. If they do, then that sets a bad precedent. As others have stated, I can't blame them for asking, though.

[Plutonic Panda]

I didn't see an answer to a previous question and I am really curious about it. Since OKC doesn't collect property taxes (Oklahoma County does) - where is OKC going to get the money to reimburse Clayco their property taxes? For that matter, where is OKC getting the money to pay back the Devon loan?

Correct me if I'm wrong, but haven't they already got it back indirectly through Devon paying their employees and their employees spending money buying things?

[bchris02]

Not if we give those tax dollar back to the developers up front - for 20 years. Let's say some company does relocate to OKC to fill the second tower - we are going to pay them for the jobs also via OKC incentive program and the State's Quality Jobs. When do we say enough is enough? A lot of people have the mentality of "just one more time". Well every time is just one more time.

OKC is rapidly improving but hasn't arrived yet. Even compared to its peer cities there is still catching up to do. This is the time, while the national economy and the local economy are doing well, to push for as much development as possible. OKC is in a unique position to really do some great things over the next few years. The city needs to be smart but now is not the time to turn to rigid, development killing ideologies.

Plus, Kerry, I think you have your own objections to this development that aren't related to the TIF. I think because it's a tower and doesn't adhere to the urbanist standards of classic European cities, you don't want to see it built.

[Pete]

I didn't see an answer to a previous question and I am really curious about it. Since OKC doesn't collect property taxes (Oklahoma County does) - where is OKC going to get the money to reimburse Clayco their property taxes? For that matter, where is OKC getting the money to pay back the Devon loan?

All TIF matters are coordinated by the City with the County.

Once the TIF is formed, the City handles all the funds directly.

[Spartan]

Article says "the percentage of increment actually falls within the amount typically sought by developers".

We already know this is not true in Oklahoma City so what is the source of this claim?

"Typically sought" vs. typically granted being the operative distinction...

[Urbanized]

I haven't visited this thread since my last posts, but I have to say upon returning that it is really frustrating to participate in a conversation where others have such strong views yet limited understanding of the TIF instrument or the historical context in which it was created.

First of all, for those who have trotted out opinions based on the quote "Tax increment financing (TIF) is an economic tool that Oklahoma City utilizes for promoting development in blighted, underserved, or economically distressed urban areas. TIF helps to fund new economic growth that will attract new investors, consumers, and employers into the area" are failing to recall that when the TIF was created this described ALL of downtown.

This description was written as a blanket statement of the economic conditions in downtown, and the TIF was designed to allow an underperforming downtown compete with the suburbs and with other cities' downtowns. You are viewing it through the lens of today's reality, in which downtown OKC is performing relatively well (though still not as well as some other cities, believe it or not).

Would it be fair to say that the maybe the definition should be changed, or priorities should be reexamined? Absolutely. But there never was any requirement that TIF be limited to brownfield or "troubled" deals, and this development was precisely what creators of the original TIF hoped one day to attract.

Secondly, to address this:

I guess this brings up 2 questions.

1) Where is OKC going to get the money to repay the loan from Devon that was borrowed against Devon future property tax?
2) Where did OKC get the authority to exempt developers from Oklahoma County property taxes?

1. The repayment will come from TIF revenues. What is difficult to understand here? The City of OKC general fund does not receive revenue from property taxes, but TIF does. That's the whole point.

2. The authority came from Oklahoma County and from the school district, who BOTH had to formally agree to the creation of TIF, as it diverts potential revenues from their coffers. They chose to support it because of a belief that it would bring the type of "high tide floats all boats" economic development that benefits them through other channels, such as residential ad valorum and sales taxes. With success such as Devon and the Continental relocation, this is hard to argue. This was a BIG PICTURE decision.

Guys, you can argue that downtown is now far enough into its rebirth that it could attract this type of development without TIF. I don't agree, but it is a valid argument. You can argue that this is too much TIF for one project, and I would agree, and probably the City does too. That's why I suspect you will see some firm negotiation here. But you can't argue that TIF doesn't apply to this type of land or these types of projects. Well, you can, but you'd be dead wrong if so.

[Motley]

Man, I just hope the outcome here proves OKC has arrived, and if we are successful with the FNC redo, the new cc and a large cc hotel, it'll guarantee that the Cox remake will truly be amazing and world class.

[bchris02]

I haven't visited this thread since my last posts, but I have to say upon returning that it is really frustrating to participate in a conversation where others have such strong views yet limited understanding of the TIF instrument or the historical context in which it was created.

First of all, for those who have trotted out opinions based on the quote "Tax increment financing (TIF) is an economic tool that Oklahoma City utilizes for promoting development in blighted, underserved, or economically distressed urban areas. TIF helps to fund new economic growth that will attract new investors, consumers, and employers into the area" are failing to recall that when the TIF was created this described ALL of downtown.

This description was written as a blanket statement of the economic conditions in downtown, and the TIF was designed to allow an underperforming downtown compete with the suburbs and with other cities' downtowns. You are viewing it through the lens of today's reality, in which downtown OKC is performing relatively well (though still not as well as some other cities, believe it or not).

Would it be fair to say that the maybe the definition should be changed, or priorities should be reexamined? Absolutely. But there never was any requirement that TIF be limited to brownfield or "troubled" deals, and this development was precisely what creators of the original TIF hoped one day to attract.

Secondly, to address this:



1. The repayment will come from TIF revenues. What is difficult to understand here? The City of OKC general fund does not receive revenue from property taxes, but TIF does. That's the whole point.

2. The authority came from Oklahoma County and from the school district, who BOTH had to formally agree to the creation of TIF, as it diverts potential revenues from their coffers. They chose to support it because of a belief that it would bring the type of "high tide floats all boats" economic development that benefits them through other channels, such as residential ad valorum and sales taxes. With success such as Devon and the Continental relocation, this is hard to argue. This was a BIG PICTURE decision.

Guys, you can argue that downtown is now far enough into its rebirth that it could attract this type of development without TIF. I don't agree, but it is a valid argument. You can argue that this is too much TIF for one project, and I would agree, and probably the City does too. That's why I suspect you will see some firm negotiation here. But you can't argue that TIF doesn't apply to this type of land or these types of projects. Well, you can, but you'd be dead wrong if so.

Like x1000!

[Motley]

Like

[Spartan]

Well said, urbanized.

I suppose it all traces back to the fact that we need to accept that what we have here is glossy renderings, and a development of such magnitude that it won't happen without a public-private partnership. It's not an indictment on OKC, because a development of this magnitude would require a public-private partnership in any city.

Cleveland is doing a development with several towers (incl a 500 footer) called "NuCLEus" and that project is requesting TIF, bridge loan from casino revenues, and tax abatement. They had might as well ask the City to build it for them. Granted the TIF ask isn't 93%, but that's a LOT of subsidy logrolled into one development, which is moving forward rapidly. I see this as no different, but actually not too bad of a deal at all if OKC can negotiate the TIF ask down into the 80s.

As I remarked when this whole TIF debate began, this is a site where honestly we probably want a max TIF to pay for "public realm improvements" which is the exclusive purview of TIF.. it's worth noting that this isn't just a predevelopment loan or developer fee or something they can line their pockets with. TIF can only be spent in certain ways, and IMO it shows that Clayco is taking a hard look at the surrounding built environment which is great.

[Just the facts]

As I remarked when this whole TIF debate began, this is a site where honestly we probably want a max TIF to pay for "public realm improvements" which is the exclusive purview of TIF.. it's worth noting that this isn't just a predevelopment loan or developer fee or something they can line their pockets with. TIF can only be spent in certain ways, and IMO it shows that Clayco is taking a hard look at the surrounding built environment which is great.

What are the $142 million in "Public Realm Improvements" Clayco is planning?

[Spartan]

We have not even arrived at that point yet.

I imagine streetscape, possibly plaza, maybe a streetcar stop, and almost certainly a parking facility. I think OKC can also make loans out of it? But again, we haven't gotten there.

[Pete]

I haven't visited this thread since my last posts, but I have to say upon returning that it is really frustrating to participate in a conversation where others have such strong views yet limited understanding of the TIF instrument or the historical context in which it was created.

First of all, for those who have trotted out opinions based on the quote "Tax increment financing (TIF) is an economic tool that Oklahoma City utilizes for promoting development in blighted, underserved, or economically distressed urban areas. TIF helps to fund new economic growth that will attract new investors, consumers, and employers into the area" are failing to recall that when the TIF was created this described ALL of downtown.

This description was written as a blanket statement of the economic conditions in downtown, and the TIF was designed to allow an underperforming downtown compete with the suburbs and with other cities' downtowns. You are viewing it through the lens of today's reality, in which downtown OKC is performing relatively well (though still not as well as some other cities, believe it or not).

Would it be fair to say that the maybe the definition should be changed, or priorities should be reexamined? Absolutely. But there never was any requirement that TIF be limited to brownfield or "troubled" deals, and this development was precisely what creators of the original TIF hoped one day to attract.

Secondly, to address this:



1. The repayment will come from TIF revenues. What is difficult to understand here? The City of OKC general fund does not receive revenue from property taxes, but TIF does. That's the whole point.

2. The authority came from Oklahoma County and from the school district, who BOTH had to formally agree to the creation of TIF, as it diverts potential revenues from their coffers. They chose to support it because of a belief that it would bring the type of "high tide floats all boats" economic development that benefits them through other channels, such as residential ad valorum and sales taxes. With success such as Devon and the Continental relocation, this is hard to argue. This was a BIG PICTURE decision.

Guys, you can argue that downtown is now far enough into its rebirth that it could attract this type of development without TIF. I don't agree, but it is a valid argument. You can argue that this is too much TIF for one project, and I would agree, and probably the City does too. That's why I suspect you will see some firm negotiation here. But you can't argue that TIF doesn't apply to this type of land or these types of projects. Well, you can, but you'd be dead wrong if so.

I think everyone understands that TIF *could* be used on this project. If that wasn't true, Clayco's proposal would have been rejected and there wouldn't be the comments by the City about entering into negotiation.

The discussion has been about "should* they be used and how much.

And it is fair to point out that to date in OKC (and in most cases elsewhere) TIF's are used primarily to help fund public infrastructure, problem properties (clean-up, special circumstances), those located in areas needing a jumpstart (like 21c) or where broader economic development is needed due to a lagging downtown area.

Which one of these scenarios apply here?

Yes, you can give tax dollars to private developers who claim they can't make a very straight-forward project work, but these situations seems to be pretty rare and I think it's a bit disingenuous to not draw clear distinctions between this project and the scale of what they are asking and what has come before it both in OKC and in other cities in similar circumstances.

And in that context, you could make a very strong arguments that TIF shouldn't be used here at all, and although I don't necessarily agree with that, it's a completely valid point of view that isn't difficult to support.

[Spartan]

Just to throw this out there because we all know it's coming -- I am going to react very strongly when Preftakes wants a TIF to demo his block.

[Just the facts]

Just to throw this out there because we all know it's coming -- I am going to react very strongly when Preftakes wants a TIF to demo his block.

Well then you might want to start warming up.