City Eyes $7 million Taxpayer Dollars to Continental Resources

[MikeOKC]

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/...tal-resources/

[Just the facts]

Why do you think he hates City government?

[Larry OKC]

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.

[SkyWestOKC]

Agree with Larry.

[Just the facts]

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).

[MikeOKC]

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.

[Just the facts]

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]

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.

[king183]

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.

[ZYX2]

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.

[Just the facts]

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.

[ZYX2]

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

[Just the facts]

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/i...ory=Incentives

[RodH]

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.

[Pete]

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

[ZYX2]

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/i...ory=Incentives

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

[okcpulse]

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?

[JohnH_in_OKC]

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

[Steve]

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/...tal-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.

[Just the facts]

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 OKC]

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.

[Larry OKC]

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.

[Larry OKC]

Informative article by Steve:
Read more: http://newsok.com/oklahoma-city-vote...#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.

[metro]

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
You have successfully logged in.
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.

[metro]

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.