Any new economic developments?

[thunderbird]

Reading the Journal Record version makes it sound like JoBeth was against the one for Booz Allen because the Industrial Military Complex leads to homelessness. No issue with almost the same amount of incentive for Heartland Payments. I know more money could be used for the homeless but let's not throw a $116M economic impact under the bus for posturing. Very disappointed with the new members vote on this.

I'm not a homeless or economic impact specialist, a Republican, a Democrat or a harmonica player - Just a normal person who hates to see our city miss out on what it deserves for the sake of making a point. I know a lot of people are homeless for no fault of their own, some because they made really poor decisions a few times in a row. - They all need help and deserve compassion and you know what won't fix any of that? Less high, tax paying jobs. If the council wants to vote for more homeless resources take it out of lifestyle budgets, not livelihoods.


OKLAHOMA CITY – The city’s business incentives policy needs to be reexamined, JoBeth Hamon told her City Council colleagues Tuesday.

Hamon ultimately voted against paying $250,000 to Booz Allen Hamilton Inc. for the creation of 130 new jobs downtown, as did council members James Cooper and Nikki Nice. The vote passed 6-3.

BAH is an international management and technology consulting company with diverse services in business, government and military sectors. The Virginia-based company has about 25,300 employees worldwide, of whom 90 work in Oklahoma City.

The Greater Oklahoma City Chamber has been working with City Hall officials for more than a year to finalize the incentive package in exchange for local office expansion. According to City Manager Craig FreemanÂ’s staff, the total estimated economic impact of the project is $116.7 million over the first seven years of operation, a figure that includes BAH capital investment, wages, state and local taxes. The estimated local sales tax and property tax revenue is expected to be $509,414 over the first five years of operation.

BAH told officials the company is expecting the average annual wages of the new jobs to be $85,000 in the first year. The overall payroll boost of $1.5 million in Oklahoma City will ramp up to $11 million after six years.

However, supporting the billion-dollar corporate giant sends the wrong message, Hamon said.

“Coming from a social services background, whenever I think about economic impact, I tend to think beyond a basic spreadsheet,” she said, referring to her experience as an education coordinator at Mental Health Association Oklahoma. “Booz Allen Hamilton is a military contractor and is one of five military intelligence contractors that hold 80 percent of our private contract work with the federal government.”

Although efficiencies of scale in company expansion could be beneficial to government expenditures, she said, the military complex leaves a lot of veterans with life-changing injuries and facing homelessness. When the city financially supports such a company, she said, “I think we’re losing in the long term.”

None of the other council members spoke to the issue before the vote.

In a related City Council agenda item, Heartland Payments Systems LLC was approved for $1 million in incentives for the creation of 345 jobs over five years. The issue passed unanimously 9-0.

[jerrywall]

Geeze... seriously? I mean, be opposed to incentives in general. Sure. I might agree or disagree with that stance, but at least it makes sense. This trying to build a moral high ground out of opposing the military industrial complex, in Oklahoma? That's a major part of our economy. And it's a lot of nose cutting.

[TheTravellers]

Geeze... seriously? I mean, be opposed to incentives in general. Sure. I might agree or disagree with that stance, but at least it makes sense. This trying to build a moral high ground out of opposing the military industrial complex, in Oklahoma? That's a major part of our economy. And it's a lot of nose cutting.

I'm guessing part of her reasoning is also that BAH is a *huge* company, already has 90 jobs here, and doesn't need the incentives and those jobs might have been created anyway (but then voting for the exact same thing for Heartland that's 4 times as much of an incentive is hypocritical). Having said that, $250K is pretty small change compared to some of the other incentives we've given out (and lost the gamble on). So yeah, she needs to get things straight and figure out a consistent philosophy for how she thinks about incentives.

[Pete]

Lost in all of this is the $1M to Heartland that was also approved.

They are already well under construction on their building so this is a prime example of city council's approval being a foregone conclusion even though it didn't even appear on their docket until last Friday. So, how are they providing any meaningful oversight over billions of tax dollars being spent in the name of economic development?

[jonny d]

Lost in all of this is the $1M to Heartland that was also approved.

They are already well under construction on their building so this is a prime example of city council's approval being a foregone conclusion even though it didn't even appear on their docket until last Friday. So, how are they providing any meaningful oversight over billions of tax dollars being spent in the name of economic development?

Billions is a VERY strong number. OKC barely has a billion dollar budget, and maybe $10-$20 million tops in incentives for job creation is spent per year. Billions isn't spent on anything in this city. In total, yes. In part, no.

[BoulderSooner]

Lost in all of this is the $1M to Heartland that was also approved.

They are already well under construction on their building so this is a prime example of city council's approval being a foregone conclusion even though it didn't even appear on their docket until last Friday. So, how are they providing any meaningful oversight over billions of tax dollars being spent in the name of economic development?

because the council has known about and been informed about that incentive for a long long time .. and in fact already approved this amount at council in sept 2018 before construction started ..

[Pete]

because the council has known about and been informed about that incentive for a long long time .. and in fact already approved this amount at council in sept 2018 before construction started ..

Half the city council has changed since then and it couldn't have been completely done in September otherwise they wouldn't have voted on it yesterday.

[BoulderSooner]

Half the city council has changed since then and it couldn't have been completely done in September otherwise they wouldn't have voted on it yesterday.

there are always multi votes before actual payment is given ..

but the 1,00,000 dollars allocation was approved on sept 11, 2018 before they started construction ..

not approving it yesterday would absolutly be in bad faith and basicly destroy any ability for the city to make any deals in the future ..

[Dob Hooligan]

I don't see any harm in a protest vote when they know it is going to pass anyway. Politicians have been doing it forever. I'm thinking JoBeth and the others are pretty savvy.

[Pete]

There will be a billion dispensed in just TIF.

I'm not talking per year; in total.

[DKG]

There will be a billion dispensed in just TIF.

I'm not talking per year; in total.

Don't have a dog in this fight, but would like to understand this last point. My understanding of TIFs are pretty limited, but I didn't think TIF funds were a city budget line item where the city writes actual checks for the funds. I thought the idea was diverting future increased tax revenue as a result of development (ideally development that may not occur without the TIF). Do you think TIFs should be accounted for and treated the same way as "dispensing" actual money from the city bank account?

[Pete]

Don't have a dog in this fight, but would like to understand this last point. My understanding of TIFs are pretty limited, but I didn't think TIF funds were a city budget line item where the city writes actual checks for the funds. I thought the idea was diverting future increased tax revenue as a result of development (ideally development that may not occur without the TIF). Do you think TIFs should be accounted for and treated the same way as "dispensing" actual money from the city bank account?

it works like MAPS. They collect the tax money in a separate fund then there has to be approved projects, budgets, and ultimately city council has final say to approval of allocating the funds.

It's "actual" money in the same way as any other tax revenue.

[DKG]

it works like MAPS. They collect the tax money in a separate fund then there has to be approved projects, budgets, and ultimately city council has final say to approval of allocating the funds.

It's "actual" money in the same way as any other tax revenue.

I see. Very helpful information. Thank you.

[Pete]

^

Then that would also explain why JoBeth the others didn't vote against that allocation while making an issue of the $250K to Booz Allen.

And it also seems to signal that they will provide much more scrutiny -- necessary, IMO -- on the new economic development incentives put in front of them.

[BoulderSooner]

^

Then that would also explain why JoBeth the others didn't vote against that allocation while making an issue of the $250K to Booz Allen.

And it also seems to signal that the will provide much more scrutiny -- necessary, IMO -- on the new economic development incentives put in front of them.

that seems fair .. and will be an insteresting thing to follow going forward ..

[Jersey Boss]

^

Then that would also explain why JoBeth the others didn't vote against that allocation while making an issue of the $250K to Booz Allen.

And it also seems to signal that they will provide much more scrutiny -- necessary, IMO -- on the new economic development incentives put in front of them.

That seems to be a smart thing to do if it happens. A study should be done spanning say the last 5-8 years on how much was awarded to each company/entity, what the conditions of the incentive were, what companies achieved those qualifying bench marks and what was done to recoup the funds from companies that failed to achieve those marks. Additionally a breakdown on what the cost per job was and how much was lost by existing competing businesses in profits and lost tax revenues by the existing business. I am generally against these incentives as they warp the free market. If a company can not make a profit w/o the incentives, what is the justification in thinking the company will be viable when the incentives disappear. The government should not be picking winners and losers with tax monies to for profit companies. If BASS PRO would not locate here with out the kick backs, maybe they are not viable with ACADEMY essentially providing the same thing without the tax payer juice.

[jerrywall]

That seems to be a smart thing to do if it happens. A study should be done spanning say the last 5-8 years on how much was awarded to each company/entity, what the conditions of the incentive were, what companies achieved those qualifying bench marks and what was done to recoup the funds from companies that failed to achieve those marks. Additionally a breakdown on what the cost per job was and how much was lost by existing competing businesses in profits and lost tax revenues by the existing business. I am generally against these incentives as they warp the free market. If a company can not make a profit w/o the incentives, what is the justification in thinking the company will be viable when the incentives disappear. The government should not be picking winners and losers with tax monies to for profit companies. If BASS PRO would not locate here with out the kick backs, maybe they are not viable with ACADEMY essentially providing the same thing without the tax payer juice.

I see no problem with this line of thinking (although I think I would disagree with your conclusions). What is worrisome is the idea that it might be approved for company a and denied for company b based on political points scored. That knife cuts both ways.

[BoulderSooner]

That seems to be a smart thing to do if it happens. A study should be done spanning say the last 5-8 years on how much was awarded to each company/entity, what the conditions of the incentive were, what companies achieved those qualifying bench marks and what was done to recoup the funds from companies that failed to achieve those marks. Additionally a breakdown on what the cost per job was and how much was lost by existing competing businesses in profits and lost tax revenues by the existing business. I am generally against these incentives as they warp the free market. If a company can not make a profit w/o the incentives, what is the justification in thinking the company will be viable when the incentives disappear. The government should not be picking winners and losers with tax monies to for profit companies. If BASS PRO would not locate here with out the kick backs, maybe they are not viable with ACADEMY essentially providing the same thing without the tax payer juice.

in most cases in the last 5-10 years OKC only pays the incentive after the bench mark is met ...

[Jersey Boss]

in most cases in the last 5-10 years OKC only pays the incentive after the bench mark is met ...

That's good to know. Where did you find this infoemation?

[GaryOKC6]

That's good to know. Where did you find this infoemation?

You are absolutely correct. Once the incentives are approved the money is not paid until the requirements are met. As for Costco it was never about getting them here but rather getting them in Oklahoma City. The incentives to Costco will be recouped by the city 10 times over in sales tax revenue.

[BoulderSooner]

That's good to know. Where did you find this infoemation?

mostly just from watching Economic development trust meetings

[jonny d]

^

Then that would also explain why JoBeth the others didn't vote against that allocation while making an issue of the $250K to Booz Allen.

And it also seems to signal that they will provide much more scrutiny -- necessary, IMO -- on the new economic development incentives put in front of them.

That is my thing. I have no problem with the incentive bids being vetted more thoroughly. But using them as a political power play, when turning around and voting in support of another bid, seems very sketchy to me. I am all for making sure the money is well spent. I would just hate to see the economic future of OKC, in terms of job creation, put in jeopardy because of some misguided agendas.

[GoGators]

I recently came across an interesting article that describes the importance of the beauty of a city with its ability to attract business development.

A study finds that the more beautiful a city is, the more successful it is at attracting jobs and new residents, including highly educated and affluent ones.

https://www.citylab.com/life/2019/05...remium/589480/

[jn1780]

We gave a tax incentive for a big box sporting store(Cabela's) in the suburbs and at the end of the day we ended up with two Bass Pro shops. We don't need deals like this.

[jonny d]

We gave a tax incentive for a big box sporting store(Cabela's) in the suburbs and at the end of the day we ended up with two Bass Pro shops. We don't need deals like this.

Retail incentives are quite different than job creation incentives. In a state that refuses to dedicate appropriate funding to schools at all levels, we need every edge we can get.