Hamm feels it important to have "incentives" to move his employees from Enid to Downtown Oklahoma City.

Harold Hamm, a man that has done much good for Enid, now looks to do good for Oklahoma City - by holding his hand out for city taxpayer dollars. Another Oklahoma 'conservative' who hates government - except when they can get away with handouts and feed at its trough.

http://journalrecord.com/2011/09/02/city-eyes-7-2-million-incentive-deal-with-continental-resources/

Why do you think he hates City government?

Don't have access to the entire article, if someone does please post.

Since I can't see it all, am flying somewhat blind, but here it goes. In theory I don't have trouble with incentives to lure employers here. Exceptions:

1. Depends on what the incentives are.

2. NO incentives should be "negotiated" AFTER the announcement has been made. This is bass ackwards. We did it with the Sonics/Thunder. We are doing it with Boeing. We are considering doing it with Continental. In all 3 instances the relocation was announced BEFORE. No need to "lure" someone who has already announced they are in fact coming. If the incentives are truly needed beforehand to make the short list, that is a different matter entirely.

Agree with Larry.

2. NO incentives should be "negotiated" AFTER the announcement has been made. This is bass ackwards. We did it with the Sonics/Thunder. We are doing it with Boeing. We are considering doing it with Continental. In all 3 instances the relocation was announced BEFORE. No need to "lure" someone who has already announced they are in fact coming. If the incentives are truly needed beforehand to make the short list, that is a different matter entirely.

Larry, I think the City and State pretty much spell out what the incentives are and the companies have to find out what the actual expenses are so they can calculate the incentive amount.

For example, I will pay you 20% of the cost to move to Omaha, but until you move to Omaha I don't know how much to write the check for (not that I want you to move to Omaha - that was just an example).

Handouts are handouts. We were talking about Pat Buchanan in another thread here recently. Pat thinks that you put all welfare types in the same basket - and I agree. The same arguments for incentives to corporations are used by 'welfare rights' groups. Does Hamm really need the $7 million dollars? The answer is, obviously, no. But, just like with minority groups, welfare culture, etc. there comes a sense of entitlement and we perpetuate a culture of dependence by continuing to hand over taxpayer dollars to corporations who have no right to continued welfare. Do we blame Continental? Not nearly as much as you blame cities, states and the federal government for creating this monster.

This kind of crap angers me so much that I'll have to stay away from here for awhile. I can't stomach to read all the excuses so many use to handover money to corporations just because "that's what we do" and "everybody does it"....you'd think we were listening to Al Sharpton defend his homeboys culture of dependence. Where are the patriots? Where are the guts? It all makes me sick.

Everyone thinks their entitled. Like I said, I'll have to stay away. My blood pressure can't take reading the reasons why this will be okay because fill-in-the-blank.

MikeOKC - There is fundamental difference in local, state, and federal governments. There is a huge benefit to OKC for companies locating in the urban core so it would make sense that they would do what they can to get companies to locate there. If Detroit wanted to offer local tax incentives to federal welfare recipients to move to downtown Detroit then more power to them.

MikeOKC - There is fundamental difference in local, state, and federal governments. There is a huge benefit to OKC for companies locating in the urban core so it would make sense that they would do what they can to get companies to locate there. If Detroit wanted to offer local tax incentives to federal welfare recipients to move to downtown Detroit then more power to them.

So, the city provides the city, a quality environment etc. Do you think Continental needs that $7 million dollars to move their employees from Enid to Oklahoma City? They even hold out the promise of more jobs downtown IF the city ponies up. What if they didn't get the money? Would they decide to keep their people in Enid? This kind of thing at ALL levels of government is wrong. Continental has the money. They don't need this giveaway. It's a form of bribery, entitlement, dependence and on and on and on. And it will continue as long as we buy their spin. And they keep pouring money into electing their "homeboys."

Have a nice weekend.

Not only does Continental NOT need this $7 million, but they would be moving to OKC regardless of whether they got that money or not. In this case, it's not an "incentive"-- it's simply giving a corporation taxpayer money for no good reason.

So, the city provides the city, a quality environment etc. Do you think Continental needs that $7 million dollars to move their employees from Enid to Oklahoma City? They even hold out the promise of more jobs downtown IF the city ponies up. What if they didn't get the money? Would they decide to keep their people in Enid? This kind of thing at ALL levels of government is wrong. Continental has the money. They don't need this giveaway. It's a form of bribery, entitlement, dependence and on and on and on. And it will continue as long as we buy their spin. And they keep pouring money into electing their "homeboys."

Have a nice weekend.

I completely agree. They have already announced that they are moving. They do not need to be lured with taxpayer money. If they choose not to come because they don't get the money, then so be it. Let them stay in Enid, and we'll see how many new employees they can attract there. All they're doing is playing the government.

I completely agree. They have already announced that they are moving. They do not need to be lured with taxpayer money. If they choose not to come because they don't get the money, then so be it. Let them stay in Enid, and we'll see how many new employees they can attract there. All they're doing is playing the government.

I think the $7 million is just the price tag for already agreed on incentives. It is not unlike the $1 million used to build Level Urban Apartments. Level doesn't get the money until the construction is done and the dollar amount wasn't agreeded to until well after planning for Level had been announced.

That is a possibility, and would be much more understandable if that is the case. If not, then.....

That is a possibility, and would be much more understandable if that is the case. If not, then.....

I remember this issue coming up back during all the speculation about who the company was. Several years ago City voters authorized the creation of a $75 million incentive fund to lure companies to OKC. This is that fund and it is doing exactly what it was designed to do - spend money on real relocations and not on chasing ghosts.

http://www.okc.gov/planning/roundtable/


Catherine O’Connor, Alliance for Economic Development of Oklahoma City, Inc.

Catherine O’Connor was recently appointed President of the Alliance for Economic Development of Oklahoma City. The Alliance is a newly created non-profit organization designed to advance private development by establishing a one-stop shop and providing specialized services for developers.

Previous to this position, Cathy served as Assistant City Manager for the City of Oklahoma City since May 2001, overseeing the departments of Finance, Planning, Development Services, the City Clerk’s Office and Public Information and Marketing. Cathy was responsible for the City’s economic development efforts including development of the incentives to bring Bass Pro Shops, QuadGraphics and Dell Computers to the Oklahoma City area. Cathy also developed the City’s Strategic Investment Program, a $75 million local economic development incentive fund approved by the voters in December 2007.


Here is how it works:
http://www.greateroklahomacity.com/index.php?submenu=sip&src=gendocs&ref=strategicinvestmentprogram&category=Incentives

Continental Resources made the decision to relocate to OKC based partly upon the incentives available. I suppose that we could withhold the incentives and they could go somewhere else that is less principled. Cities don't provide incentives because companies need them, they provide incentives because their competition does. I think that the incentives might be more appropriately called an investment in the city's economy. Consequently, the less a company needs the incentives the greater the odds are that the investment will pay off. The hope is that the community will gain more than it cost.

CHK is getting a bunch of money for expanding as well, something they have been doing consistently for years.

I remember this issue coming up back during all the speculation about who the company was. Several years ago City voters authorized the creation of a $75 million incentive fund to lure companies to OKC. This is that fund and it is doing exactly what it was designed to do - spend money on real relocations and not on chasing ghosts.

http://www.okc.gov/planning/roundtable/



Here is how it works:
http://www.greateroklahomacity.com/index.php?submenu=sip&src=gendocs&ref=strategicinvestmentprogram&category=Incentives

And that is perfectly fine with me if that is the case. Thanks for providing that info.

Handouts are handouts. We were talking about Pat Buchanan in another thread here recently. Pat thinks that you put all welfare types in the same basket - and I agree. The same arguments for incentives to corporations are used by 'welfare rights' groups. Does Hamm really need the $7 million dollars? The answer is, obviously, no. But, just like with minority groups, welfare culture, etc. there comes a sense of entitlement and we perpetuate a culture of dependence by continuing to hand over taxpayer dollars to corporations who have no right to continued welfare. Do we blame Continental? Not nearly as much as you blame cities, states and the federal government for creating this monster.

This kind of crap angers me so much that I'll have to stay away from here for awhile. I can't stomach to read all the excuses so many use to handover money to corporations just because "that's what we do" and "everybody does it"....you'd think we were listening to Al Sharpton defend his homeboys culture of dependence. Where are the patriots? Where are the guts? It all makes me sick.

Everyone thinks their entitled. Like I said, I'll have to stay away. My blood pressure can't take reading the reasons why this will be okay because fill-in-the-blank.

If this situation angers you, then you must really hate Texas. They throw money all over the place to lure companies. If Oklahoma City were to bow out providing incentives and not complete with other cities, then we will be back where we were in the late 1980s. Which do you prefer?

If OKC does provide $7 million in incentives to Continental, I hope Continental promises to use the money to invest back in our city. Look at what Devon has brought to OKC with their Project 180 tax give-back incentives.

We have a lot of outstanding OKC events sponsored by Devon, Chesapeake, Sandridge and now Continental will join them.

Giving a profitable company like Continental Resources our tax money may upset many of us, but I just hope the end result will bring positive change for our city.

John Hite, retired, Oklahoma City

Hamm feels it important to have "incentives" to move his employees from Enid to Downtown Oklahoma City.

Harold Hamm, a man that has done much good for Enid, now looks to do good for Oklahoma City - by holding his hand out for city taxpayer dollars. Another Oklahoma 'conservative' who hates government - except when they can get away with handouts and feed at its trough.

http://journalrecord.com/2011/09/02/city-eyes-7-2-million-incentive-deal-with-continental-resources/

This is not true. No offense Mike, but the incentives are not at all connected to the relocation. They are for NEW jobs to be created after their move, not for any of the jobs being moved. It's structured identically to Boeing and Chesapeake. Now, whether you like that politically, well, that's for you to decide. But let's make sure we're comparing apples and apples here.

Consequently, the less a company needs the incentives the greater the odds are that the investment will pay off. The hope is that the community will gain more than it cost.

That is a darn good point. When investing, invest in the sure thing. Continenetal could have moved anywhere; Tulsa, Houston, Denver, Dallas, etc... Who knows, maybe they would have picked OKC anyhow. Thank goodness we will never know, because for a mere $7 million they picked OKC. OKC will make back that $7 million in just a few years (see - sure thing).

Did the new outlet mall also get some money from this fund?

Larry, I think the City and State pretty much spell out what the incentives are and the companies have to find out what the actual expenses are so they can calculate the incentive amount.

For example, I will pay you 20% of the cost to move to Omaha, but until you move to Omaha I don't know how much to write the check for (not that I want you to move to Omaha - that was just an example).

Thank you for not asking me to move to Omaha...LOL

While this may be the case with Continental (don't know all the details), it was NOT the case with the Thunder and at least partially for Boeing. Both of those were negotiated after the fact. We know that happened with the Thunder and the City Manger stated after Boeing announced the move, he was going to start negotiations. This appears to be a separate deal than the formula type that Boeing applied for and received in March for $1.49 million & 232 new jobs @ $90k/yr. As Steve pointed out Chesapeake also is on the receiving end, getting $3.5 million/350 jobs @ 105K/yr, at the same trust meeting thru the "Strategic Investment Program". This is just the City's end of the deal. Doesn't include any State incentives.

The same article stated that in the case of Continental, since they were already in the sate, the relocating jobs wouldn't be eligible for the program. Only new jobs that are added (think Steve also mentioned it). We know that Continental has rather extensive expansion plans. Hopefully those incentives are tied into actually delivering those jobs for a specified number of years and not just plans to do so (see Dell below).

The point of all of that is, if conditions are imposed, that is a good thing. Like in the case of Dell they were supposed to add 3K jobs w/avg salary of $40K within 3 years). That part of the deal was a per person hired thing. It was $1K /employee times number of employees. Stick to it then, Dell didn't make the number. Somehow the 3,000 figure suddenly dropped to 250 jobs at the $40k/yr. From a Journal Record article early this year:

Dell also agreed to keep up an annual average of at least 250 full-time employees with an average annual salary of at least $40,000 per employee.

"Dell has met all of its requirements and the land does not have any restrictive covenants on it now," said JoeVan Bullard, executive director of the Oklahoma City Urban Renewal Authority. Dell's Oklahoma City campus employs about 1,500 workers, Frink said.
Again, according to info on the City's site right now and the reporting when it happened, it was supposed to have been 3,000 jobs. NOT 250 or 1,500 (do the current 1,500 make the $40K/yr avg requirement?) It is this type of thing, requirement/conditions are supposedly built in and then forgiven. Similar story with the Bass Pro deal, millions if not multi-millions off the projections. That is plain flat out wrong.

JTF: re the Outlet mall, not sure of the funding source but here is the initial incentive deal offered (IIRC, another $1MM was added for infrastructure):

$2.3 million on infrastructure for the site at Interstate 40 and Council Road and sales tax rebates of up to $550,000 a year over a decade as reimbursements for actual marketing expenses.

Informative article by Steve:
Read more: http://newsok.com/oklahoma-city-voter-approved-bond-funds-new-jobs/article/3600743#ixzz1WruDDOIH

The fund is set up on a “pay-as-you-go” basis, with payments not made until promised new jobs are created. To date, the Oklahoma City Economic Development Trust, whose members are appointed by the mayor, has allocated $13.9 million but paid out only $2.5 million.

Here is the whole article:


Continental Resources, OKC officials to work on job incentive deal
By Brianna Bailey
Oklahoma City reporter - Contact 405-278-2847
Posted: 01:11 PM Friday, September 2, 2011
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OKLAHOMA CITY – City officials are getting ready to begin negotiations on a $7.2 million incentive deal with Continental Resources Inc. for 461 new jobs the Enid-based company wants to create after it moves its headquarters downtown.
The possibility of reaping economic development incentives was a factor in Continental’s decision to relocate to Oklahoma City, said John Hart, the company’s chief financial officer, senior vice president and treasurer.
“It was a factor not in deciding to move, but in deciding where to move,” Hart said. “Moving is a terribly expensive proposition for most companies.”
The company also considered moving out of state to aid in its aggressive plans to triple its size over the next five years, he said. Continental has already expanded its workforce by 29 percent companywide since the beginning of the year and has about 50 jobs posted on its website, Hart said.
Continental estimates its move from Enid to Oklahoma City over the next year will cost the company anywhere from $15 million to $25 million.
The $7.2 million incentive deal would help the company offset some of its moving costs, Hart said.
If approved, the deal would be the largest job creation incentive package Oklahoma City has offered a company since voters approved the city’s $75 million Strategic Investment Plan in 2007.
At a time when it’s rare for a company of Continental’s size to relocate, economic incentives can make or break a deal, said Roy Williams, president and CEO of the Greater Oklahoma City Chamber.
“Incentives always play that kind of role,” Williams said. “I think the difficulty they were having where they were located was attracting the kind of talent they need to grow that kind of company when you need to try and attract these kinds of highly paid, specialty industry people.”
The city’s Strategic Investment Plan is a discretionary pool of money financed by municipal bonds that offers incentives for companies that want to relocate or expand their operations in the city and meet certain annual wage and job creation requirements.
Continental plans to create the new 461 jobs over the next seven years, on top of 255 positions the company is in the process of moving from Enid, according a report to the Oklahoma City Economic Development Trust posted on the city website Friday.
Oklahoma City Economic Development Program Manager Brent Bryant is careful to stress that the incentive money would be targeted at new jobs the company will create as part of its plans to triple in size. The city will pay no incentive money for the existing jobs Continental is in the process of moving from Enid, he said.
“When you look at the economic impact, these 461 jobs are the kind of jobs that will help expand our economy,” Bryant said. “The more disposable income here, the better off we are as a city.”
The new jobs are skilled, high-paying positions with an estimated average compensation of $130,538 for new hires, according to the Economic Development Trust report.
The trust is scheduled to vote on whether to begin negotiations with the company on the incentive deal on Tuesday. Any deal the city makes with the company would then have to be approved by the trust and the City Council.
The trust report estimates the company’s relocation to Oklahoma City will inject $427 million into the local economy over the first three years, based on the company’s capital investment in the city, wages and state and local taxes.
Continental announced in March that it planned to move from its birthplace in Enid into Devon Energy Corp.’s current building at 20 N. Broadway Ave. in downtown Oklahoma City. The company expects to complete the move by the end of 2012.
Devon Energy sold the 19-story, 307,288-square-foot building to a mystery buyer in October for $22.5 million.
Continental plans to spend anywhere from $2 million to $5 million on new equipment and refurbishment at the downtown Oklahoma City building, according to the Economic Development Trust report.
The company has hired San Francisco-based architecture and design firm Gensler to evaluate what it needs to do to the building on N. Broadway to suit the company’s needs, Hart said.

Handouts are handouts. We were talking about Pat Buchanan in another thread here recently. Pat thinks that you put all welfare types in the same basket - and I agree. The same arguments for incentives to corporations are used by 'welfare rights' groups. Does Hamm really need the $7 million dollars? The answer is, obviously, no. But, just like with minority groups, welfare culture, etc. there comes a sense of entitlement and we perpetuate a culture of dependence by continuing to hand over taxpayer dollars to corporations who have no right to continued welfare. Do we blame Continental? Not nearly as much as you blame cities, states and the federal government for creating this monster.

This kind of crap angers me so much that I'll have to stay away from here for awhile. I can't stomach to read all the excuses so many use to handover money to corporations just because "that's what we do" and "everybody does it"....you'd think we were listening to Al Sharpton defend his homeboys culture of dependence. Where are the patriots? Where are the guts? It all makes me sick.

Everyone thinks their entitled. Like I said, I'll have to stay away. My blood pressure can't take reading the reasons why this will be okay because fill-in-the-blank.
While I agree, at least the rich are creating jobs unlike the welfare class.

I think we should not compete with incentives and those 450 jobs averaging $130,000 should go elsewhere. We don't want fast growing companies to locate here because we are a Tea Party state and we believe in total complete pure ideals, regardless of realities. We would rather be puritans, right? We don't need that nose, let's just cut it off.

Folks, the PEOPLE voted this in. If it helped us keep CR in Oklahoma and move to OKC vs. losing another company to Dallas or Houston, it is a good investment.

I think the $7 million is just the price tag for already agreed on incentives. It is not unlike the $1 million used to build Level Urban Apartments. Level doesn't get the money until the construction is done and the dollar amount wasn't agreeded to until well after planning for Level had been announced.

This seems reasonable and I don't have a problem with incentivizing QUALITY employers...Huge inconvenience to uproot your HQ

At least "some" of the rich. The pooling of monies after the bailouts whilst small business has few opportunities to obtain loans is sickening.

I can understand why there are people generally angry at all levels.

If this situation angers you, then you must really hate Texas. They throw money all over the place to lure companies. If Oklahoma City were to bow out providing incentives and not complete with other cities, then we will be back where we were in the late 1980s. Which do you prefer?

While I agree with this, Pulse, it bothers me to hear so much talk of "Socialism" when it comes to Social Security, retirement pensions, and Medicare, but citizens are supposed to simply accept that corporations deserve free money and tax breaks.

I do agree OKC / Oklahoma should compete and offer incentives, but I'm officially annoyed by the "it's socialism if average people receive benefits but it's simple 'good-old-fashioned-free enterprise' when corporations are on the receiving end" BS.

This bond issue was approved by voters. It was fully reported on prior to the vote.
Sometimes it's useful to look back at what was said prior to the vote:
Story No. 1:
Fund sought to lure new employers

By Steve Lackmeyer
Business Writer
Wednesday, July 25, 2007
Edition: CITY, Section: BUSINESS, Page 1B
Oklahoma City voters may be asked this winter to support creation of a $75 million economic development fund as a replacement for depleted federal grants used to lure new employers.

The General Obligation Limited Tax bonds — called GOLT bonds — if approved by the Oklahoma City Council, would increase a bond issue vote proposed for Dec. 11 to a total of $830 million.

Assistant City Manager Cathy O'Connor told the council Tuesday the city has "exhausted" traditional sources of economic development incentives just as the city has become a top contender for new employers considering expansion or relocation in Oklahoma City.

"We have many more leads and prospects that we're visiting with than I've seen in the past eight years I've been doing economic development with the city," O'Connor said. "We're working with several prospects out there on the possibility of coming to Oklahoma City. It's a very competitive environment, a very competitive marketplace to get the investment in your community."

Roy Williams, president of the Greater Oklahoma City Chamber, urged the city council to add the GOLT bonds to stay competitive with other cities across the country.

"No one philosophically likes incentives," Williams said. "But unfortunately, we can't ignore the reality that economic incentives are important to getting a development. ... In reality, Oklahoma has slid on the scale of being competitive in luring these projects."

Williams said special tax elections, such as those attempted in the early 1990s to lure airline maintenance plants, are no longer sufficient in an age of fast-moving deals.

"We would be the first major city in the United States to do this," Williams said. "Cities elsewhere have done this in bits and pieces, but none have done this to this extent. We would be the first, best and the only city in the U.S. to have a strategic fund to address jobs and economic development."

City council members questioned whether a countywide vote should be considered or whether neighboring suburbs should be included in the initiative. Williams said a change in state statutes would be needed to allow Oklahoma City to partner with suburbs in "economic districts."

Ward 4 Councilman Pete White recalled Oklahoma City once believed it only could attract new employers by throwing cash at them. He reminded Williams that the failure of approved sales taxes to lure airline maintenance centers led to the city's decision to invest in itself with the 1993 Metropolitan Area Projects and the follow-up MAPS for Kids overhaul of schools.

"I don't want us to ever go back to that pre-MAPS idea that the only way to get business to come to Oklahoma City is to buy it. Only by reinvesting in ourselves did we get to where we are today. I don't want us to lose that perspective."

Williams agreed with White — but added that incentives have remained a key component in luring employers such as Dell and Quad Graphics.

Williams said hundreds of Texas cities have established their own incentive funds that, combined with state matches, top what can be offered by Oklahoma City. He said Oklahoma City's transformation is attracting interest from companies elsewhere, but the city still must compete with what is being offered by other markets.

"Companies are always looking at how to close a sale, whether it's rebates, pricing or anything else," Williams said. "And that's what this is — it's about making the sale. ... This just makes us competitive."

Including the economic development fund on the ballot could translate into an increase in either the length of the bond issue or in the property tax level to 18 mills, from what now stands at 16 mills. In the past three bond issue elections, the city has been able to promise a "yes" vote would result in no increase to property taxes.

An increase from 16 to 18 mills would result in an increase of $248 to $279 a year for a $150,000 home. An increase in the length of the bond issue would delay when the city could introduce a new bond proposal.

The city council will decide in October whether to include the $75 million in the bond issue election.

"I'm not hearing anyone here saying they are not in favor of job development," Mayor Mick Cornett said. "I think we're in a consensus on that."

HOW THE BONDS WOULD WORK

For the past decade, Oklahoma City has relied mostly on state and federal funding to lure employers. Options included federal Community Development Block Grants, state incentives including the Quality Jobs Act, tax abatement and tax exemptions, and local incentives in the form of job creation grants, land assembly and infrastructure improvement.

Federal grant funding has been reduced the past few years, and city officials say they've "exhausted" what funds remained with projects ranging from the Dell Business Service Center and American Indian Cultural Center along the Oklahoma River, and renovation of downtown's Skirvin Hilton Hotel. If the "GOLT bonds" are approved by voters, Oklahoma City City Manager Jim Couch said $10 million in bonds could be sold at first, and additional bonds would only be sold as needed. Couch said a trust authority, similar to one that oversees expenditures of MAPS for Kids sales taxes, would control the GOLT bonds. He expects the proposed authority and its members would be announced prior to the Dec. 11 election. Couch said guidelines would govern how the bond money could be used, and that it would not be used for employee or corporate retention.

The incentives would be capped at $75 million.
Trust proposed to oversee funds

By Steve Lackmeyer
Business Writer
Tuesday, October 9, 2007
Edition: CITY, Section: BUSINESS, Page 4B
Oklahoma City Mayor Mick Cornett is asking fellow council members to approve creation of a trust today that would oversee a $75 million economic development fund that is included in an upcoming bond issue.

The fund is proposed to provide incentives like those used to lure Quad Graphics and Dell Computers. The fund can only be created if approval of an $835 million bond issue in an election tentatively set for Dec. 11. The General Obligation Limited Tax Funds – called GOLT bonds – are advocated by the Greater Oklahoma City Chamber as a way to replace depleted federal grants that were previously used to lure new employers.

Cornett is asking council members to also approve five nominees for the trust: former Mayor Kirk Humphreys; Dave Lopez, an executive at American Fidelity Assurance Co. and former Oklahoma SBC president; veteran Automobile Alley developer Meg Salyer; and council members Larry McAtee and Patrick Ryan.

"We thought having two council members would be appropriate," Cornett said. "We also wanted people in the private sector who have experience with the city, who have created jobs, and know how jobs are created."

Cornett said the trust will operate in a manner similar to the one that oversees the city's MAPS for Kids overhaul of area schools. He said the trust will have the authority to question city staff and chamber officials. Ultimate authority, however, would be retained by the city council.

"It should put a layer of confidence in the system that should stand the test of time," Cornett said.

Roy Williams, president of the Greater Oklahoma City Chamber, said the five proposed trustees should help voters feel comfortable with the unprecedented use of bond funds for economic development.

"I think when you look back at the MAPS trusts that the public needs to have confidence in the individuals and that they have credibility," Williams said. "These are people who will be perceived as people who can be relied on to lay out this program as it is intended."

How bonds would work

Staff Reports
Tuesday, October 9, 2007
Edition: CITY, Section: BUSINESS, Page 4B
For the past decade, Oklahoma City has relied mostly on state and federal funding to lure employers.

Options included federal Community Development Block Grants, state incentives including the Quality Jobs Act, tax abatement and tax exemptions, and local incentives in the form of job creation grants, land assembly and infrastructure improvement.

Federal grant funding has been reduced the past few years. And city officials say they've "exhausted" funds with projects ranging from the Dell Business Service Center and American Indian Cultural Center along the Oklahoma River, and renovation of downtown's Skirvin Hilton Hotel.

If the "GOLT bonds" are approved by voters, Oklahoma City City Manager Jim Couch said $10 million in bonds could be sold at first, and additional bonds would only be sold as needed. Couch said a trust authority, similar to one that oversees expenditures of MAPS for Kids sales taxes, would control the GOLT bonds.

Couch said guidelines would govern how the bond money could be used, and that it would not be used for employee or corporate retention.

The incentives would be capped at $75 million.

Forgive me, but I think it's important to understand how these deals work. Some companies have been duds. Let's take a look at Spheris:
Incentives to lure med transcription

By Steve Lackmeyer
Business Writer
Tuesday, July 15, 2008
Edition: CITY, Section: BUSINESS, Page 6B
The Oklahoma City Economic Development Trust has asked to consider a $3 million incentives deal to establish a medical transcription operation expected to create up to 1,000 work-at-home jobs.

A report provided by Robin Roberts Krieger, executive vice president of economic development at the Greater Oklahoma City Chamber, forecasts the deal with Tenn.-based Spheris will result in a $36 million payroll within three years.

"We're optimistic based on how this is being presented," said Roy Williams, chamber president. "We think this is an offer they will consider very seriously."

Cathy O'Connor, general manager of the development trust, acknowledged the deal is unique for the city. Spheris has reported to the city it is hoping to employ military spouses.

"With gas prices up as they are, this may be the sort of jobs more people are looking for," O'Connor said.

Earlier this year, Oklahoma City was a top finalist for the regional operation when it was tentatively awarded to New Mexico. Krieger said negotiations were revived when that deal fell apart.

Williams said the jobs are being created in response to tightening privacy rules.

"It's a trend that we understand is taking place in this industry," Williams said. "A lot of this kind of business has historically been off shored. And it's coming back ... this is potentially a growth industry and reversing what we've seen in off-shoring jobs."

ECONOMIC INCENTIVE BONDS

For the past decade, Oklahoma City has relied mostly on state and federal funding to lure employers.

Options included federal Community Development Block Grants, state incentives including the Quality Jobs Act, tax abatement and tax exemptions, and local incentives in the form of job creation grants, land assembly and infrastructure improvement.

Voters in December added $75 million to the mix by approving General Obligation Limited Tax bonds. Before any incentives can be offered, they must be approved by the Oklahoma City Economic Development Trust, whose members are appointed by the mayor.

THE DEAL

Spheris will lease an existing 5,000-square-foot building in Oklahoma City for a training facility and regional headquarters. The company anticipates creating up to 1,000 jobs over the next three years. Most of the jobs would be work-at-home medical transcriptionists with an average third-year wage of $36,000. The estimated payroll by the third year would be $36 million. The city is being asked to offer up to $3 million over three years, with up front capital not to exceed $1 million. The deal would require 80 percent of the employees to reside in Oklahoma City. Spheris will guarantee the year one incentives with a promissory note should the operation not meet the required salary threshold.

Incentive package narrowly approved

By Steve Lackmeyer
Business Writer
Wednesday, July 16, 2008
Edition: CITY, Section: BUSINESS, Page 6B
A $3 million incentives package aimed at luring a medical transcriptions company to set up operations in Oklahoma City won tentative approval Tuesday from the Economic Development Trust — but not without some concerns expressed about the company's financial stability.

The proposed deal with Tennessee-based Spheris calls for the city to provide $1 million up front for setting up operations in Oklahoma City, with the majority of the 1,000-employee operation consisting of work-at-home jobs with an average salary of $36,000.

Trustee and Ward 1 Councilman Pat Ryan questioned the company's financial viability, noting he was able to find reports of losses totaling $2.8 million in 2006 during a search on Google.

"If this were 2006, we'd really be on thin ice," Ryan said. "I have real serious questions about their financial viability."

Finances studied

Assistant City Manager Cathy O'Connor, manager of the trust, promised more research will be done into the company's finances before the deal is finalized. She said the city's outside audit firm, Grant Thornton, may be asked to review the company and the deal before it's submitted to the city council for final approval.

Spheris executives could not be reached for comment Tuesday. But in a May 13 earnings conference call, President and Chief Executive Officer Steven Simpson reported first quarter revenues totaled $49.3 million, down from $52.3 million for the same period in 2007. The quarter ended with an operating loss totaling $700,000.

As with the 2006 news reports of declining revenues quoted by Ryan, Simpson cited a loss of customers and changing technology as leading factors in the latest losses. Chief Financial Officer Brian Callahan, meanwhile, forecasted that revenues would be flat or down for the remainder of the year.

A report on the proposed incentives deal submitted by Robin Roberts Krieger, executive vice president of economic development with the Greater Oklahoma City Chamber, indicated Oklahoma City was one of two finalists for the Spheris expansion when the company initially chose New Mexico.

Site search reopened

The report states "issues regarding Spheris' incentive package with the State of New Mexico" prompted the company to reopen their site selection process in February and Oklahoma City was chosen as the top pick one month later.

Neither O'Connor or Roy Williams, president of the Greater Oklahoma City Chamber, could elaborate on why the deal with New Mexico collapsed.

INCENTIVE PACKAGE

Tennessee-based Spheris Inc. is one of the leading providers of clinical documentation technology and serves more than 500 health systems, hospitals and practices in the United States. The company employs more than 5,500 transcriptionists worldwide, many of them in at-home jobs, with operations centers in Franklin, Tenn., Minot, N.D., Sterling, Va., and in three cities in India.

The proposed $3 million incentive package would be paid from a $75 million General Obligation Limited Tax bond passed by voters in December. The Oklahoma City Economic Development Trust, appointed by the mayor to oversee expenditures from the fund, also on Tuesday approved a $2.9 million deal with AAA to open an office in northwest Oklahoma City that is expected to employ 825 people.

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SO WHAT HAPPENED?
On February 3, 2010, Spheris filed for bankruptcy and announced plans to sell its U.S. business to MedQuist Inc, its largest competitor, for $75.25 million. To my knowledge the company did not set up operations in Oklahoma City and it did not receive any money.

I think we should not compete with incentives and those 450 jobs averaging $130,000 should go elsewhere. We don't want fast growing companies to locate here because we are a Tea Party state and we believe in total complete pure ideals, regardless of realities. We would rather be puritans, right? We don't need that nose, let's just cut it off.

Folks, the PEOPLE voted this in. If it helped us keep CR in Oklahoma and move to OKC vs. losing another company to Dallas or Houston, it is a good investment.

Why do you always have to so sanctimonious? Most people agree Continental is deserving.

While I agree, at least the rich are creating jobs unlike the welfare class.
True. I have never been employed by a poor person (at least not for very long).

The info by Steve about Spheris leaves me split on the issue

1) Am against giving millions away to someone who obviously doesn't need it...has said they are coming anyway

2) But on the other hand, they are the types to deliver on what they promised

Sort of like trying to get a loan at the bank, they require assurances that you don't really need the money. That it is really just a cash flow function.

Well reiterate what I mentioned before. It is a great thing when these types of deals are conditional, that when the conditions aren't met, the flow of money stops. That said, they have to stick to those conditions and not "forgive" loans etc. There should also be a requirement that any monies given prior to the failing of meeting conditions be returned. that way not only is there a reward incentive but a penalty phase. Not unlike road construction projects. There are financial incentives for every day they complete the job early and penalties for every day it goes the other way..

Why do you always have to so sanctimonious? Most people agree Continental is deserving.

Not meant for them.

Thanks for the sanctimonious scolding about being sanctimonious.

Btw, I was being sarcastic, not sanctimonious.

I think something that needs to be mentioned, and forgive me for not doing so, is that the city began negotiating this deal with Continental in 2010 before the company decided to move its headquarters to OKC. So while the incentive is not for relocation per se, it's probably safe to say the potential of getting this money for the expansion planned after the move probably played into the choice of OKC instead of Houston, Dallas, etc. And as mentioned earlier in this thread, yes, Texas most likely would have thrown this much money if not more to get Continental.
I'm not defending the money game. Just saying it is what it is.
The city has a bit of a challenge in communicating this one - they have said they don't want to use this money to steal jobs from other Oklahoma communities. And indeed, there isn't a dime, from what I can see, going toward the relocation or the existing jobs. But I'd be hard pressed to believe the potential of this deal didn't play into the relocation decision.

...they have said they don't want to use this money to steal jobs from other Oklahoma communities.

This has always bothered me. OKC should be going after the top 50 companies in Oklahoma that are not already in OKC. If OKC had been doing this all along Conoco, Phillips, and lots of other companies might be in OKC today, instead of Texas. I know this, cities here in Florida don't care anything about not trying to lure employers from other cities in the state. Downtown Jax has even declared war on suburban Jax. A fund was created just to lure employers to downtown and the first recipient is a company located about 8 miles south of downtown.

http://www.bizjournals.com/jacksonville/news/2011/05/24/city-proposes-helping-everbank.html


EverBank wants to expand into Downtown Jacksonville, adding 200 new jobs and relocating 1,000 employees from its Southside office with the help of city funding, according to a news release from the City of Jacksonville. The exact Downtown location of the EverBank move was not contained in the release.

The Mayor's Office is proposing to offer the Qualified Target Industry Tax Refund program with a High-Impact Sector Bonus to provide the bank with $420,000 as well as a $2.75 million city grant funded primarily by the downtown economic development fund to offset EverBank's relocation expenses that are estimated at $26 million.

The proposed agreement with the city calls for the bank to maintain a minimum of 1,000 jobs in Downtown and an average of 1,350 employees between its downtown and Riverside Avenue headquarters during an initial five-year contract period. Mayor's Office spokesperson Misty Skipper said the bank has not finalized a Downtown lease yet.

My knee-jerk reaction is to be appalled by more corporate welfare. But then I saw the average incomes that we would be talking about... that is something very significant. If someone wants to create 400+ jobs with an average income of $130,000, maybe we should whore ourselves out a little. I'm just tired of subsidizing jobs that average slightly above the Oklahoma average. Corporate welfare for $40,000 jobs makes us look pathetic, and it is pathetic.

Oh and this affair shouldn't be in the Urban Core development forum.

This may very well be unconstitutional.


the credit of the State shall not be given, pledged, or loaned to any individual, company, corporation, or association, municipality, or political subdivision of the State, nor shall the State become an owner or stockholder in, nor make donation by gift, subscription to stock, by tax, or otherwise, to any company, association, or corporation.

Art. 10, Sect. 15, Oklahoma Const.

This is the City, not the State.

The city is political subdivision of the state. The Constitution applies just the same.

The profound ignorance of your statement is beyond the pale. I mean under your "analysis," the U.S. Constitution, 1st Amendment of the Bill of Rights, beginning "no state shall" would not apply to municipalities or anything but states. You're smarter than that.

The city is political subdivision of the state. The Constitution applies just the same.

I understand that but the Article you posted said credit of the State cannot be given to a political subdivision. The State is not giving OKC any money. If you are trying to argue that the City is considered part of the State, then that would mean the State couldn't give money to itself or individuals - and it does that every day.

Look at the last clause. What's the difference between a "donation" and a payment for services. These words weren't selected at random and do mean something.

Look at the last clause. What's the difference between a "donation" and a payment for services. These words weren't selected at random and do mean something.

Explain State Unemployment Insurance, Medicare, Welfare, or public education. How can the State fund the University of Oklahoma?

You know, on second thought - never mind. The State's Quality Jobs Program has already been through all of this and it was ruled consitutional.

The profound ignorance of your statement is beyond the pale. I mean under your "analysis," the U.S. Constitution, 1st Amendment of the Bill of Rights, beginning "no state shall" would not apply to municipalities or anything but states. You're smarter than that.




Amendment 1 - Freedom of Religion, Press, Expression. Ratified 12/15/1791. Note

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
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The State is NOT Congress. Congress is defined Article 1, Section 1


All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.



The State IS NOT part of Congress. It consistant entirely of the Senate and House of Representatives, whose individual membership is spelled out in the rest of Article 1.

While I dont know the specifics of this deal in several previous ones the incentives should collected in two years, if the person who's job was 'created' lived and shopped entirely in OKC.

My knee-jerk reaction is to be appalled by more corporate welfare. But then I saw the average incomes that we would be talking about... that is something very significant. If someone wants to create 400+ jobs with an average income of $130,000, maybe we should whore ourselves out a little. I'm just tired of subsidizing jobs that average slightly above the Oklahoma average. Corporate welfare for $40,000 jobs makes us look pathetic, and it is pathetic.

Remember the old joke with the punch line: "now that we know what you are, we are just negotiating over price". In politics, I find it usually has less to do with ideals and more to do with the "who" and "how much". Recent studies show that government contracts are now going to Tea Party freshmen congresspersons' donors at the same preferred rate as the liberal democrats whom they claim sold out. Seems as though it proves my point. Should we incentivize 200 $130k jobs or 2,000 jobs at $40k. Principle is the same.

Oh, $40,000 is not pathetic for people out of work or are stuck in minimum wage jobs as their only possibility of employment. Two people in a household making $40k each is $80k and provides a nice lifestyle for a family.

Should we incentivize 200 $130k jobs or 2,000 jobs at $40k.

At the State and local level - I am in favor of both.

The State IS NOT part of Congress.

Yeah, but a State can't subvert congress:


No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

The State is NOT Congress. Congress is defined Article 1, Section 1



The State IS NOT part of Congress. It consistant entirely of the Senate and House of Representatives, whose individual membership is spelled out in the rest of Article 1.

Seriously.. do not quit your day job. Internet lawyering ain't for you.

The U.S. Constitution is incorporated to the states through the 14th Amendment Equal Protection clause. The state constitution, which I am referring to is applicable to all state political subdivisions. If you don't understand that the University of Oklahoma is a political subdivision of the State of Oklahoma, you just need some very remedial training on state and local government. Money isn't gifted or donated to state political subdivisions, it's part of the appropriations bill.

At any rate, you are right, in In the Matter of Application of Oklahoma Development Finance Authority, 2004 OK 26, 5-3, the Court basically rewrote the law on public money being used for private purposes, very clearly subverting the intent of the Constitution, which Justice Opala's dissent very clearly lays bare. The Petitioner, was of course, Jerry Fent, probably the most stalwart defender of the Oklahoma constitution this state has seen and as far as judicial minds go, Opala is head and shoulders above anyone who has sat on the bench, although, I will say he did some befuddling things in his later years on the bench.

On the law, the dissent was right. The majority wrote new law and basically removed the strong protections our forefathers had written into the Constitution to avoid very corrupt redistribution of wealth from the middle class to wealthy corporations as is being facilitated here.

On the law, the dissent was right.

By law - the dissent is never right. It is a fact many of us conservatives have had to live with.

Trouble is, folks professing to be conservatives are the very folks behind this garbage. It amazes me that the Tea Party/real conservative types have still absolutely refused to eat their own, instead sending these Chamber shills to the state capitol.

It is because we know (and understand) the difference between a federal government and state/local governments.