Tif

This has become an issue that has become important is so many different developments that I think it is deserving a thread of it's own. Here are Steve's latest thoughts.

So How is TIF Money Being Spent? | News OK

I have a full spreadsheet of how all the TIF #2 money has been spent. I'll post it later.

So how do the payouts work? Is Clayco going to get a check for $142 million or will they get 25 checks (1 year apart) for $5.7 million? If they get it in one check where is OKC going to get the $142 million to write that check. If it is 25 checks then those payments should stop the second the property is sold and returned to the tax rolls.

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Originally Posted by Just the facts

So how do the payouts work? Is Clayco going to get a check for $142 million or will they get 25 checks (1 year apart) for $5.7 million? If they get it in one check where is OKC going to get the $142 million to write that check. If it is 25 checks then those payments should stop the second the property is sold and returned to the tax rolls.

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There have been cases where the City advances the money to the developer (they always need it up front) and then charge a low interest rate. However, I was told by Brent Bryant (Economic Development Program Manager for the City) they will no longer be doing this.

So, in the case of Clayco, they would use the future tax rebates to get a commercial loan, which allows them to get the lump sum up front but also requires significant interest be paid to a bank, which in turn gets factored into their project costs.

TIF Districts - OKCTalk

Basically, these are interest-free loans paid for by our school systems... and in the case of this TIF project, the building owner won't contribute one dime to our schools for twenty years. We shouldn't need to pay these sorts of incentives to get good development.

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Originally Posted by Midtowner

Basically, these are interest-free loans paid for by our school systems... and in the case of this TIF project, the building owner won't contribute one dime to our schools for twenty years. We shouldn't need to pay these sorts of incentives to get good development.

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I'm going to break this down in great detail and will include future value calculations to account for the time value of money.

I also want to show how property taxes are spent in general. Schools are a part of it but all the talk has been in generalities and I want to break this down in real dollar amounts.

Between TIF #2 and the propsed Clayco TIF, we are talking about the same public investment as the first MAPS and everyone needs to better understand how all this works.

I don't think all TIF projects are bad. Just this one. This building is going to be built with or without funding from the taxpayers. It would be great if this development would mean some extra revenue for many of our vastly underfunded public needs.

There has to be analysis and understanding of several scenarios, not just the binary all or nothing numbers being thrown around.

Before Clayco got involved there was a plan to develop the north parcel and there was never any mention of a TIF.

Also, if the City rejects the Clayco proposal for the south parcel they could easily find someone else to develop that property; especially if they allowed more than 60 days for developers to respond.

The idea that we either get a $553 million development on these properties or there is no incremental tax benefit at all is absurd and simplistic.

I still really like the Clayco proposal but there is no way to evaluate *how much* in the way of incentives they should receive. Since the majority of commercial projects downtown have received TIF funds and the percentage of investment has been around 5-6%, that seems like a reasonable request. Anything above that (and they are asking for over 25%) should be scrutinized in great detail and also justified.