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Thread: TIF Districts

  1. #226

    Default Re: TIF Districts

    Quote Originally Posted by David View Post
    Conflicts of interest aside, Cathy O'Connor working for the Strawberry Fields people give me the first hope that the Strawberry Fields people might actually build something someday.
    Hahaha... you're not wrong per se. Ir does sound like she's just consulting. Wouldn't be surprised if she has earned over $500k already for those 2 services alone.

  2. #227

    Default Re: TIF Districts

    Oklahoma legislation would require public vote on TIF districts
    By: Janice Francis-Smith The Journal Record February 3, 2023

    OKLAHOMA CITY – State Rep. Tom Gann, R-Inola, was not happy with the mysterious process state officials used last year in their attempt to lure a Panasonic battery factory to the state.

    Gann responded by filing bills to be considered during the 2023 legislative session that would prohibit state officials from creating tax increment financing districts without the knowledge and approval of the citizens affected by the proposed development.

    House Bill 1379 would require a vote by citizens to redirect property tax through tax increment financing districts. HB 1378 would prevent government officials from entering into non-disclosure agreements with companies seeking state or local incentives.

    “The process I personally observed was not one where balanced information was provided on whether a TIF district was a viable proposition for economic growth,” Gann said. “I saw a process of one-sided information, using sales techniques to promote the proposal.”

    Gann referenced last year’s legal battle between a group of Mayes County residents, county commissioners and administrators of Mid-America Industrial Park in northeast Oklahoma.

    MAIP is Oklahoma’s largest industrial park, covering 9,000 acres with more than 80 tenant firms, including Google, DuPont and Nordam. MAIP is owned and operated by a self-sustaining public trust and generates operating revenues through a park-owned water and wastewater system and park land sales and leases.

    In 2021, Gov. Kevin Stitt and other state officials embarked on a project dubbed Project Ocean – an effort to lure a Panasonic plant to Oklahoma. Panasonic, working in partnership with electric vehicle company Canoo – another MAIP resident – sought a site to build batteries for electric vehicles.

    Stitt successfully got the Oklahoma Legislature to approve roughly $700 million for the project while refusing to name the company the incentives were designed for, claiming negotiators had signed nondisclosure agreements.

    The incentives for the mystery company included move-in ready space at MAIP. MAIP officials got Mayes County commissioners to approve a plan that would direct property tax revenues toward a newly created 588-acre TIF district to fund infrastructure improvements at the MAIP site offered up under Project Ocean.

    Local residents questioning the development failed to get clear answers regarding how their tax dollars would be spent and for whom, according to Gann.

    “The answers they were given were vague and they were told the information couldn’t be revealed because it was part of a non-disclosure agreement,” Gann said. “This caused further frustration and more questions about the creation of a TIF district.”

    Residents sued to obtain the information and won the opportunity to vote on the proposal at the Nov. 8 election. Citizens in every precinct of Mayes County voted down the TIF district, with 63.9% of the vote opposing the project.

    Gann said he wants to prevent the situation from arising again. Gann said it is the taxpayer who bears the risk when big incentive packages affect their property tax base.

    “House Bill 1379 will put the power back into the hands of citizens by requiring a TIF district proposal to go to a vote of the people for approval,” Gann said. “It will eliminate the costly legal battle against government imposing a TIF district without the consent of the governed.”

    Gann noted more than one occasion last year when state officials refused to identify a company in line to receive state dollars. In addition to the mystery surrounding Project Ocean, the State Board of Education refused to reveal what vendor was awarded a $33.6 million contract, claiming the information was protected under a nondisclosure agreement.

    “When politicians are willing to invest and speculate with taxpayer dollars, the Oklahoma taxpayer has a right to know exactly how taxpayer dollars are being distributed for business activity and exactly who will be receiving the taxpayer dollars from vendors seeking to do business with the state of Oklahoma,” Gann said.

  3. #228

    Default Re: TIF Districts

    I definitely support that. TIF has shifted from something used to finance the occaional project like the Skirvin where traditional finance would fail into a means by which developers pad the bottom line as a general rule. When it's used to develop cool, historical properties fine. When it's used to develop Wal Marts and $500/sq. ft. cottage developments next to railroad tracks, it's not fine. I'm doubting it passes both houses or will be signed by the Governor though. Our current leadership doesn't seem likely to get between subpar developers and their bottom lines.

  4. #229

    Default Re: TIF Districts

    More TIF districts are being planned.

    District A/#14 (they give them numbers after the payments start) is the OKANA area. They have already been granted $102 million but the revised TIF plan shows $85MM + 43MM for $128MM. The $128 is the budgeted amount to be paid out in TIF although it almost always goes way higher due to collections exceeding the budget. For example, the downtown TIF (#2) was budgeted at $195MM and they have already generated $360MM, all of which will be paid out in TIF.

    District B is the area east of Eastern and is budgeted for $22MM. I bet the Chickasaws have their sites on that property as well.

    District C is no doubt for the Dream Hotel project and is budgeted for $215(!) million.

    District D will be carved out of the downtown TIF (which expires in 2026) and targets the two buildings along Broadway that Tanenbaum plans to convert to apartments; budgeted at $12MM.

    With the amounts paid out to date for TIF ($1.2 billion) plus current obligations and these new additions, that would be almost $1.8 billion in TIF money and we are just starting to scratch the surface of Strawberry Fields and OKANA.

























  5. #230

    Default Re: TIF Districts

    District A being drawn to include the industrial land south of the railroad seems odd. Planning for the future, maybe? Or are we just grabbing a bit of unrelated tax money to hand over to the OKANA project?

    District B is very interesting, has there been any indication of development activity in that area before now?

    District C gives me fresh reassurance that the Dream Hotel project is still trucking along.

    District D I like the look of since that project will further activate the downtown core following on the heels of the First National redevelopment. The more residents living downtown the better.

  6. #231

    Default Re: TIF Districts

    Are these 25 year proposals? That's the issue I take most exception with. Lowering the length would prevent the numbers far surpassing what we budget for.

  7. #232

    Default Re: TIF Districts

    Quote Originally Posted by Teo9969 View Post
    Are these 25 year proposals? That's the issue I take most exception with. Lowering the length would prevent the numbers far surpassing what we budget for.
    Yes, 25 years which is the max allowed by state law.

  8. #233

    Default Re: TIF Districts

    On a related note, we have been looking at condos in Cincinnati's OTR area and many of them were built with tax abatement funds (similar to a TIF). Most of the early ones are about to lose their tax abatement status and it is going to add close to $1000/mo in property taxes that the current owners haven't been paying. I think a lot of people are in for a rude awakening when that property tax bill hits.

  9. #234

    Default Re: TIF Districts

    In OKC, the TIF incentives are given to the developers, not the condo owner.

  10. #235

    Default Re: TIF Districts

    At last week's Planning Commission, they presented this graphic to illustrate they will be taking property from TIF #2 -- which is set to expire after 25 years -- and moving it to the Innovation District TIF which is just starting its 25-year run.

    So, millions more in TIF is being planned although they did not submit the projected amount.

    Also, these things run for a full 25 years at which time all the property involved is supposed to revert to the usual flow of property tax to education and the city. However, they keep creating new TIFs within the TIF #2 boundary, or moving chunks of it to new or existing TIFs.

    In TIF #2 alone (which has now generated $360 million in 23 years vs. the $47.5 million originally budgeted) they have carved out the entire Devon complex, First National, parts of Core to Shore, the Dream Hotel/parking lots, the Tanenbaum projects on Broadway and now a big chunk on the eastern edge. You can expect more of the same as TIF #2 winds down.


  11. #236

    Default Re: TIF Districts

    Quote Originally Posted by Pete View Post
    In OKC, the TIF incentives are given to the developers, not the condo owner.
    How does that work? Is someone fronting the money to give to the developer? If so, where is that money coming from?

    Here in Jax the property tax is collected and then give back to the property owner as a rebate. In Cincy it just isn't collected at all until time is up.

  12. #237

    Default Re: TIF Districts

    Quote Originally Posted by Just the facts View Post
    How does that work? Is someone fronting the money to give to the developer? If so, where is that money coming from?

    Here in Jax the property tax is collected and then give back to the property owner as a rebate. In Cincy it just isn't collected at all until time is up.
    Here, it is a mix.

    Sometimes the city gives the money upfront and more recently (after a light started to be shined on their process) they began to shift towards providing property and sales tax abatement.

    But they still give some developers money upfront before they've built anything. That's exactly what is being proposed at Strawberry Fields and the Omni demanded the city give them the full amount before they spent a dime of their own money. In that case, the city was hit with tens of millions of interest charges on top of the tens of millions given the Omni.


    That thing with the Omni still burns my arse. I knew the Alliance was on a deadline to submit the full financial package to City Council and the day it was due (there is a deadline for compliance with open meetings law) I saw it hit the public agenda, quickly downloaded it, saw there was a huge finance charge involved that was not disclosed in dollar amounts, and immediately picked up the phone to call Cathy O'Connor. Within minutes I saw a full story in the Oklahoman about this very subject and with quotes from O'Connor and others. The Alliance obviously leaked it to Lackmeyer who of course just published what they fed him and never bothered to ask about the significant finance charges.

    I was steaming by the time O'Connor called me back because it was an obvious manipulation of the facts. She refused to give me a number but there is absolutely no way they are proposing a massive financial deal without having all the details. So, I called the Director of Finance for OKC and he quickly gave me the run-down. In the addition to the $85 million in freebies given to the Omni, there would be a whopping $53 million (!!!) in interest costs.

    Of course we were the only outlet to even bother to research this issue while the Oklahoman happily just reported $85 million.


    It's things like this that causes me to keep a very sharp eye on the Alliance in general and TIF in particular because absolutely no one else is.

  13. #238

    Default Re: TIF Districts

    That is unbelievable...but I believe it. That is right out of the Devon playbook, except Devon loaned the City the money to give back to them and then collected the interest from the City. Almost sounds like money laundering.

  14. #239

    Default Re: TIF Districts

    Quote Originally Posted by Just the facts View Post
    That is unbelievable...but I believe it. That is right out of the Devon playbook, except Devon loaned the City the money to give back to them and then collected the interest from the City. Almost sounds like money laundering.
    devon loaned the city money to complete street scape projects and a giant renovation to the myriad gardens .. not to " give back to them"

  15. #240

    Default Re: TIF Districts

    Quote Originally Posted by BoulderSooner View Post
    devon loaned the city money to complete street scape projects and a giant renovation to the myriad gardens .. not to " give back to them"
    As a condition of building in OKC (they threatened to go to Houston) Devon insisted all their property and sales tax be spent on the Myriad Gardens and Project 180, and while 60% of P180 was cut, everything around Devon HQ was completed and completed first.

    They merely loaned all the money to the city upfront (with interest) so all that work would be done around the time they opened their building.

  16. #241

    Default Re: TIF Districts

    Quote Originally Posted by Pete View Post
    As a condition of building in OKC (they threatened to go to Houston) Devon insisted all their property and sales tax be spent on the Myriad Gardens and Project 180, and while 60% of P180 was cut, everything around Devon HQ was completed and completed first.

    They merely loaned all the money to the city upfront (with interest) so all that work would be done around the time they opened their building.
    no doubt

    but they also could have just requested the max tif for just their building infrastructure and parking and not used it for the public good ... and P180 being scaled back doesn't really have anything to do with Devon

  17. #242

    Default Re: TIF Districts

    Quote Originally Posted by BoulderSooner View Post
    no doubt

    but they also could have just requested the max tif for just their building infrastructure and parking and not used it for the public good ... and P180 being scaled back doesn't really have anything to do with Devon
    It has to do with them because Nichols sat on the committee that determined the priorities of P180 and all the stuff that benefitted Devon got done.

    They also got a sweetheart deal on the propety which was owned by the city.


    But, it is absolutely fair to say they didn't take TIF and put it in their own pocket. And I've said many times that Larry Nichols has done more to reshape downtown than anyone. But everything accomplished was with money from Devon or the city, not him personally (although he did make a personal donation to complete Centennial Park).

  18. #243

    Default Re: TIF Districts

    Quote Originally Posted by Pete View Post
    It has to do with them because Nichols sat on the committee that determined the priorities of P180 and all the stuff that benefitted Devon got done.

    They also got a sweetheart deal on the propety which was owned by the city.


    But, it is absolutely fair to say they didn't take TIF and put it in their own pocket. And I've said many times that Larry Nichols has done more to reshape downtown than anyone.
    that is fair ..

    i just meant when it comes to the P180 forecast/project cuts ect ... that they didn't run that project the city public works did ..

  19. #244

    Default Re: TIF Districts

    Quote Originally Posted by Pete View Post
    Here, it is a mix.

    Sometimes the city gives the money upfront and more recently (after a light started to be shined on their process) they began to shift towards providing property and sales tax abatement.

    But they still give some developers money upfront before they've built anything. That's exactly what is being proposed at Strawberry Fields and the Omni demanded the city give them the full amount before they spent a dime of their own money. In that case, the city was hit with tens of millions of interest charges on top of the tens of millions given the Omni.


    That thing with the Omni still burns my arse. I knew the Alliance was on a deadline to submit the full financial package to City Council and the day it was due (there is a deadline for compliance with open meetings law) I saw it hit the public agenda, quickly downloaded it, saw there was a huge finance charge involved that was not disclosed in dollar amounts, and immediately picked up the phone to call Cathy O'Connor. Within minutes I saw a full story in the Oklahoman about this very subject and with quotes from O'Connor and others. The Alliance obviously leaked it to Lackmeyer who of course just published what they fed him and never bothered to ask about the significant finance charges.

    I was steaming by the time O'Connor called me back because it was an obvious manipulation of the facts. She refused to give me a number but there is absolutely no way they are proposing a massive financial deal without having all the details. So, I called the Director of Finance for OKC and he quickly gave me the run-down. In the addition to the $85 million in freebies given to the Omni, there would be a whopping $53 million (!!!) in interest costs.

    Of course we were the only outlet to even bother to research this issue while the Oklahoman happily just reported $85 million.


    It's things like this that causes me to keep a very sharp eye on the Alliance in general and TIF in particular because absolutely no one else is.
    When I looked at the TIF budgets last fall it seemed like maybe there was some borrrowing back and forth between the funds, especially the older, bigger funds.

    I know we've paid a hefty interest bill particularly for earlier projects, but if I recall, we do have quite a bit of funds "on hand".

  20. #245

    Default Re: TIF Districts

    ^
    If the Alliance wants a project, they will move heaven and earth: completely new districts, carving out areas for existing ones, borrowing money, selling profitable parking garages... Whatever it takes.

    People have no idea how much power they have. Basically a few people spending billions of taxpayer money with very little understanding and no approval by the public.

  21. Default Re: TIF Districts

    Quote Originally Posted by Midtowner View Post
    I definitely support that. TIF has shifted from something used to finance the occaional project like the Skirvin where traditional finance would fail into a means by which developers pad the bottom line as a general rule. When it's used to develop cool, historical properties fine. When it's used to develop Wal Marts and $500/sq. ft. cottage developments next to railroad tracks, it's not fine. I'm doubting it passes both houses or will be signed by the Governor though. Our current leadership doesn't seem likely to get between subpar developers and their bottom lines.
    I ask this in all seriousness. TIFs are investments in "A" thru tax breaks (revenues you weren't receiving anyway) in order to (hopefully) reap benefits through new tax revenues generated by "A", both directly and through other resulting tax sources. I realize there are TIFs for total long-shot projects and there are TIFs for sure things like Panasonic.

    If 1. money is fungible and 2. there were no significant tax revenues being generated by the unused land - why are you against providing an incentive (investment) in order to reap MORE revenues you weren't going to get without the TIF? A $ in new tax revenue is superior to no $ in tax revenue.

    While l understand the corporate welfare issue and l wish they were outlawed, they aren't going to be.

  22. #247

    Default Re: TIF Districts

    Quote Originally Posted by mugofbeer View Post
    I ask this in all seriousness. TIFs are investments in "A" thru tax breaks (revenues you weren't receiving anyway) in order to (hopefully) reap benefits through new tax revenues generated by "A", both directly and through other resulting tax sources. I realize there are TIFs for total long-shot projects and there are TIFs for sure things like Panasonic.

    If 1. money is fungible and 2. there were no significant tax revenues being generated by the unused land - why are you against providing an incentive (investment) in order to reap MORE revenues you weren't going to get without the TIF? A $ in new tax revenue is superior to no $ in tax revenue.

    While l understand the corporate welfare issue and l wish they were outlawed, they aren't going to be.
    I think you assume that the development couldn't happen without the TIF. I think a lot of these developments could happen without TIF--and when that happens, our schools in particular are being hammered by missing out on millions in ad valorem revenues which are now going to pay for bonds for development which would happen with or without TIF. Municipalities are building Wal Marts with TIF.

  23. #248

    Default Re: TIF Districts

    the Chamber helped defeat a bill that would have required voters to approve all tax increment finance districts within the entire jurisdiction of the TIF. If passed, that law would have had a negative impact on a municipality or county’s ability to generate development funds for public improvements within that TIF area.
    Link

    And as a reminder, this constant reference to TIF being used for "public improvements" is completely wrong and keeps getting repeated.

    The huge percentage of TIF funds are used for private development.

  24. #249

    Default Re: TIF Districts

    Quote Originally Posted by Pete View Post
    Link

    And as a reminder, this constant reference to TIF being used for "public improvements" is completely wrong and keeps getting repeated.

    The huge percentage of TIF funds are used for private development.
    TIF, I think has experienced a bit of mission creep. At first, it was for unique projects which needed a boost in order to be viable. Now nearly every developer, from Wal Mart to random overpriced tiny houses in downtown Edmond demand taxpayers subsidize their development efforts--mostly at the expense of public schools.

    The reason a lot of folks think TIF = public improvements is because that was how it was originally sold.

  25. #250

    Default Re: TIF Districts

    Quote Originally Posted by Midtowner View Post
    The reason a lot of folks think TIF = public improvements is because that was how it was originally sold.
    Not to keep picking on them, but the Oklahoman uses that wording in virtually every single article they write on this subject.

    The specific wording I quoted that you quoted was a very recent document from the Chamber which was specifically addressing their success in defeating legislation that would require a public vote for new TIF. They frequently use this wording in their efforts and it's just flat-out misleading and factually wrong.

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