Hopefully the "muddy hole" is due to the nice rain we got today and not a water main break.

Exactly, Larry. Construction workers in OKC haven't had to worry much about muddy holes for some time.

It looks like the city made a wise decision this time.

http://newsok.com/city-officials-pull-out-of-plans-to-award-parking-meter-contract-to-florida-firm/article/3613124?custom_click=headlines_widget

So the city is going with Parkeon now?

http://www.okgazette.com/oklahoma/article-13480-trimmed-tif.html

Planners are looking for savings on Project 180.

Clifton Adcock
November 4th, 2011

A major downtown streetscape project is being reduced in scope because of revenue shortfalls in the funding plan and cost overruns, city officials said, dropping E.K. Gaylord Boulevard off the project list.

One of the major funding sources for Project 180, the Devon tower tax increment finance district, is not bringing in as much money as hoped, officials said. Coupled with cost overruns on current and already completed Project 180 work, the shortfall has city planners looking for ways to save money.

A plan is currently on the table and actively being formulated by city staff. The city borrowed millions from Devon Energy for Project 180 and is looking at an early repayment option with a lower interest rate.

However, although E.K. Gaylord may not be part of Project 180 as initially planned, it could be part of a future project, said Public Works Director Eric Wenger.

How much is the TIF district’s shortfall? Read Wednesday’s Oklahoma Gazette for the full story.

Wow...

Whattttt? Where did the money go? How the hell is the Devon tower not bringing in as much money?

Just more confirmation on what we already know.

Quick, someone go tell Chesapeake to hurry up and buyout Midfirst so they can build a new midrise tower downtown. Lol

Just more confirmation at what we already know.

Quick, someone go tell Chesapeake to hurry up and buyout Midfirst so they can build a new midrise tower downtown. Lol

Amen. And someone get American Fidelity on the phone as well and tell them to hurry up with their "speculated" skyscraper.

Man, the haters sure come out quick!

Strange that the Devon TIF would be generating less than anticipated, as it was based completely on property tax... How could that change?

Strange that the Devon TIF would be generating less than anticipated, as it was based completely on property tax... How could that change?

My thoughts exactly. This must be PR speak obscuring the cost overruns.

Man, the haters sure come out quick!

Who's hating? No one can ask the question where the anticipated revenue went? If it was just cost overruns they should just say that. These smaller projects are good practice for when we get into later phases of maps3.

No joke, just say it was cost overruns. We sure do have some amateur PR folks in this town.

Color me confused along with the rest of you....

1) The Devon TIF district is solely comprised of the Devon property, so how could it not be bringing in as much as projected?

2) Must be talking about Project 180 cost overruns because a relatively recent article in the Oklahoman (think it was by Steve) stated that construction of the Devon property was on time & on budget???

ON EDIT: The cost overruns putting E.K. Gaylord in doubt were 1st posted by Urban here: http://www.okctalk.com/showthread.php?t=20184&p=467510#post467510

Sounds like the Gazette will provide more details on Wednesday.

Only thing I can think of, and I doubt it is, is that the estimated cost of tower was less since they reduced height, but I believe P180 started final plans after this fact. I think it's just a bad PR person.

Maybe the bids came in lower as they built the tower, thus possibly coming in under budget.

1) The Devon TIF district is solely comprised of the Devon property, so how could it not be bringing in as much as projected?

Maybe the bids came in lower as they built the tower, thus possibly coming in under budget.

I think for this project the TIF money is tied to difference between what the properties value was prior to investment vs what it is after investment, not the actual construction dollars, the economy (/ commercial real estate market ) could have had a negative impact on the value the property was assessed at thus lowering the revenue taxes collected on it.

Hi all. Just to clear something up, the Devon TIF actually has a sales tax component as well. The TIF's main draw will be ad valorem tax, but the sales tax spent on construction materials for use within that TIF district, which is redirected from the city's general fund into the TIF fund, is part of it as well. Obviously this sales tax part, unlike the ad valorem tax, is coming in now and is added in with GO bonds/Devon loan money to pay for current/past construction. That sales tax where the shortfall is. There will be more information in Wednesday's Gazette. Thanks.

You sure this wasn't just USE taxes collected ? Thought I read that somewhere....

Come to think of it the TIF part hasn't even kicked in yet. Devon didn't want to wait until after the tower is complete and the property value increased to begin the project (they want it done before the tower is finished). And that is why they are loaning the City the money upfront to get it done (to be paid back with interest). http://newsok.com/devon-tenders-95m-to-city/article/3403554
I don't have it handy right now, but it seems I also read that the normal TIF wont start to be collected on for a few YEARS after the time it would normally kick in so this is all confusing to say the least.

Maybe they are having a hard time selling the TIF (if they are similar to bonds)?? TIF is borrowed money that is paid back with the anticipated increase in property taxes. I know I read the City is having problems selling regular general obligation bonds. So maybe that is what the article is talking about???

I don't think use taxes are part of the TIF deal (but certainly don't think there is anything stopping them from using other revenue sources for Project 180). But even so, sales tax revenues are exceeding projections by millions (which includes use taxes). Here are the Project 180 funding sources:
http://findarticles.com/p/articles/mi_qn4182/is_20090514/ai_n31864558/

Catherine O'Connor, assistant city manager, said downtown will see an influx of money with the Devon TIF providing $115 million for public improvements such as streetscapes and parks, coupled with $40 million for the opportunity fund. There is also about $30 million designated for downtown streetscapes and $14 million for Myriad Gardens renovations from the 2007 general obligation bond.

Guys, I started working on this story about two weeks ago. It's complicated. I was going to do it for this next Sunday, but seeing as we've seen an interesting coincidence of Clifton suddenly going after it as well, I've moved my run date to Tuesday.

ON EDIT: The cost overruns putting E.K. Gaylord in doubt were 1st posted by Urban here: http://www.okctalk.com/showthread.php?t=20184&p=467510#post467510

I'm suprised that it has taken this long for people to catch on to this. I was studying my copy of P180 documents and comparing them to the maps presented to council on Tuesday. Let's just say that the change in scope appears to be significant.

Why exactly, I don't know. The question about the TIF I can't say. I will say that I have been all over P180 because of the streetcar and there seem to be major suprises such as an extraordinary number of basements that extend out of buildings past the property lines and under sidewalks that require excavation, "re-capping", and resealing.

First National's foundation extends out across Robinson. It is it's own story.

Old streetcar tracks on Walker and Main.

Major waterline replacement at Main/Robinson.

So there are physical objects that have required extra care and cost.

However, it appears that the area to be reduced is significant. You would think that not doing Dowell's area per his request would provide the funds for financial offset, but it sounds as though it will not. His protest accounts for a great area to have minimal improvements compared to the original plan.

No, I caught on to it the same day you did Urban... it's another story why I held off a bit.... and there's more to this than what's currently public.

Hi all. Just to clear something up, the Devon TIF actually has a sales tax component as well. The TIF's main draw will be ad valorem tax, but the sales tax spent on construction materials for use within that TIF district, which is redirected from the city's general fund into the TIF fund, is part of it as well. Obviously this sales tax part, unlike the ad valorem tax, is coming in now and is added in with GO bonds/Devon loan money to pay for current/past construction. That sales tax where the shortfall is. There will be more information in Wednesday's Gazette. Thanks.

Thanks Clifton! Looking forward to the article on Wednesday.

I know there was to be sales tax based on the furniture and other fixtures purchased by/for Devon but am interested to know how the actual collections could be so far off. Having worked on a number of large scale office projects, when it comes to furniture and the like you usually go over budget, not under.

Glad we have you and Steve on the story.

No, I caught on to it the same day you did Urban...

That I don't doubt. "People" being the blogosphere in general. EK Gaylord and it's "highwayesque" design have been discussed on here ardently by many for a long time. To not see more blogging about the fact it's probably not going to be adressed by P180 suprised me.

But if you interpret the drawings the way I do, EKG is not the only casulty.

From stuff that I heard from well-placed individuals LAST YEAR about the cost overruns (these are hardly a surprise to anyone), we're extremely lucky that EKG is all that they're having to cut. However, I think it's pretty scandalous that we're in this boat to begin with.

Not to mention that there were a few bells and whistles that they opted FOR on the Myriad Gardens (ie., the LED panels to go along with replacing the glass in Crystal Bridge) simply because there was room in the budget. I don't know what metro is smoking to blame it on a bad PR person (although one could imagine his motivation and then not blame him I guess), but what has been the story so far is horrible program management, political manipulation, and unrealistic expectations--all from the get-go.

Hopefully what we have here is proof-positive that not everything this city does regarding downtown is going to be a resounding success. Whenever you have bad management, political manipulation, and unrealistic expectations all affecting one program (ie., not all that different from MAPS3 so far), no matter the track record you WILL have more failures than you want.

I don't think there was ever much doubt that we will need to do a P180 v. 2 later on, if we want to do it right. There were some really great special features in some of the streetscapes, such as along Broadway in the CBD, that would have been really special. My understanding is that a lot of these features didn't make the final budget to begin with. Now the notable omission of EKG becomes glaring. There will also need to be some kind of program for C2S streetscapes, because something of that magnitude can't be done piece-meal.

One positive thing that can certainly be said however is that P180 will provide a fantastic template to copy and paste in other districts, and perhaps even with regards to one over-looked aspect of the new Central Park--park/streetscape interaction. P180 did a brilliant job of tying the Myriad Gardens into its surrounding new streetscapes. That's the kind of mutually beneficial synergy you create when the committee in charge of the new streetscapes is also in charge of the park redesign.

Only thing I can think of, and I doubt it is, is that the estimated cost of tower was less since they reduced height, but I believe P180 started final plans after this fact. I think it's just a bad PR person.
I would think that (reduced tower height) could explain some of it. Reduced cost due to materials also, more than likely. Plus, when P180 was mapped out I expect they were basing the projected assessed property values on a continuous appreciation that instead took a hit in the economic downturn. Lump in a few cost overruns on P180 itself (if indeed that has happened), and it would be pretty easy to throw off the budget.

Here's a question: has anyone calculated how the improvements to the Sandridge campus will affect the existing downtown TIF? I don't recall hearing any announcements regarding how new TIF dollars generated by Sandridge improvements might be allocated. Is it possible that other TIF dollars such as those generated by Sandridge could be brought to bear on improving Gaylord? It would actually make sense for Sandridge to take an active interest in that corridor anyway, as it is a front door to their soon-to-be-revitalized corporate campus.

Guys, just wait until the stories come out.....

Oops. Missed that there was another page after metro's post that I responded to. Some of those responses help clarify things.

Guys, just wait until the stories come out.....
Where's the fun in that Steve?

It might allow folks to have an educated conversation based on facts? And you'll be getting not just a write-up from me, but also from Clifton, who is a pretty damn good reporter.

C'mon, grumpy. Speculation is the lifeblood of this forum. It's more fun to try to figure it out first, and then see how close we are when you serve up the cold hard facts.

Guys, just wait until the stories come out.....

You ask an awful lot of OKCTalkers. Mere mortals, sure, they'll wait. But, you know how some here are, lol.
They can start speculating long before the cows even go out as well as continue long after they've come home.

C'mon, grumpy. Speculation is the lifeblood of this forum. It's more fun to try to figure it out first, and then see how close we are when you serve up the cold hard facts.

Could've said Just The Facts. (or does Kerry own the copyright?)

Guys, I started working on this story about two weeks ago. It's complicated. I was going to do it for this next Sunday, but seeing as we've seen an interesting coincidence of Clifton suddenly going after it as well, I've moved my run date to Tuesday.

Gotta be first, huh?

Guys, just wait until the stories come out.....

This sounds ominous. My blood pressure is already rising.

this sales tax part, unlike the ad valorem tax, is coming in now and is added in with GO bonds/Devon loan money to pay for current/past construction. That sales tax where the shortfall is

The revenue shortfall can't possibly be that much because the entire amount budgeted for sales tax for TIF #8 is $20 million. And, they clearly aren't finished spending money (furniture and other items) as the complex is still a year away from being complete. How far off could this number possibly be at this point?

The remainder of the revenue for this TIF will be property taxes which for some reason don't start until year 5 of the 25-year TIF lifetime -- I suppose they have to wait until the project is completely finished to assess. Estimated at $7.5 million a year for 20 years based on the assumed assessment of $750 million, that would be $150 million. Can't possibly be a shortfall here because this hasn't kicked in yet and it's too early to provide an assessment.

Therefore, for the Project 180 to be significantly affected, the main culprit has to be cost overruns.

I wonder if the Myriad Gardens came in at the budgeted $38 million? And we are only about one fourth of the way through the other improvements, so if they are already way off budget there is something seriously wrong.

I just walked with Betts by the Robinson section at Main Street. It looks like they are putting the road base material in in front of the Colcord and IRS building. The area in front of Sweets and Eats, First National is still undergoing utility relocation. It is a massive undertaking in that area.

Cost overruns and funding shortfalls have city planners looking for ways to save money on Project 180.

http://www.okgazette.com/oklahoma/article-13487-trimmed-tif.html

From that Gazette article... 50% off on the amount of sales tax to be collected??? Who the heck was this Arizona firm?

That's $10 million right out of the gate that won't be available for Project 180.

I realize this represents just a few percentage points based on a $750 million project but good grief... How about being conservative rather than aggressive, or at least providing a range and then managing to the lower number??

We're only a couple of years into a 5- or 6-year project and we are already way, way off budget.




Funds are not meeting projections for multiple reasons, Bryant said.

The first is because the sales tax revenue from the TIF was overestimated by the Arizona-based firm that studied what the sales tax revenue would be, Bryant said.

“That model was a little bit off on its percentage of how much of the job was going to be labor and how much was going to be (materials),” Bryant said. “When you move that a couple percentage points to the right or to the left, it has a significant impact on it.”

The result was a 50 percent shortfall in the sales tax generated versus anticipated, Bryant said. Rather than the $10.4 million in sales tax revenue — $20.8 million with state matching funds — the TIF only generated about $5.2 million.

That means that more money must be drawn from the Devon credit line, increasing costs further because of interest and other financing costs, Bryant said.

In addition, cost overruns on the project’s various packages because of unforeseen construction issues caused project administrators to dip into contingency funds, Bryant said.

If I remember correctly, didn't they just rebuild the block (Reno) between the FC and Cox just a year or 2 prior to rebuilding it again with P180 ?

Could have done just a little cosmetic landscaping and moved on.

Maybe they did, but that street (which is one of the most important b/c of it's visibility during Thunder games), looks way better now. Seems like you want that block to be the best.

I agree totally on making it great because of visibility, but they ripped up one year old pavement. Maybe they actually upgraded utilities and needed too.

We could make the same argument about waiting and let some of the streetcar monies help with the cost to refurbish the roadway, cause I think we may see a repeat once that project kicks off.

Does City Council even know what is going on? I just watched the video of the P180 presentation from last Tuesday. Not even a mention of cost overruns or a reduced area. Is City Staff trying to hide the reality from City Council? The two maps in Clifton Adcock's article show huge differences between what was originally promised and what it's been cut back to.

Surely Dowell's protest and subsequent removal of his area from P180 would have made up for the budget shortfall?

Does City Council even know what is going on? I just watched the video of the P180 presentation from last Tuesday. Not even a mention of cost overruns or a reduced area. Is City Staff trying to hide the reality from City Council? The two maps in Clifton Adcock's article show huge differences between what was originally promised and what it's been cut back to.

Surely Dowell's protest and subsequent removal of his area from P180 would have made up for the budget shortfall?

The P180 budget and roads being done has come up in prior meetings.

Steve's article:

http://newsok.com/oklahoma-citys-project-180-is-being-trimmed-down-a-few-degrees/article/3621052?custom_click=headlines_widget

How about a city-wide fast food sales tax for walkability projects? That's something I'd get behind.

I'm not understanding the math on this project.

Earlier it was reported that they expect a $750 million appraisal of the Devon complex which would yield $7.5 million a year in property taxes for 20 years. That's $150 million. Add to that the estimated $20 million of sales tax (now $10 million) and that gets you to $170 million (now $160 million). Even if you add the $24.5 million general obligation bonds that were used for he Myriad Gardens, that's $194.5 ($184.5) million total.

Where did this $224 million number come from?

Also, if you add $115 million for Projection 180 to the $40 million incentive fund and $20 million for the general tax fund, that's a total of $175 million. The difference is $49 million in interest... How the heck do you have $49 million in interest on a $175 million project that only runs a few years? Especially when the incentive fund and general taxes have not been paid out.

Is there a detailed budget somewhere that shows all projected revenues and expenditures?


As originally envisioned, the tax increment financing district budget for Project 180 was to consist of $115 million for the downtown makeover, and another $40 million to be used as an incentive for luring a new corporate headquarters. Yet another $20 million of the increment district was to be directed to the area's other taxing authorities — Oklahoma County, the Metropolitan Library System, Oklahoma City Public Schools, Oklahoma City/County Health Department and CareerTech.

The remainder of the estimated $224 million to be raised over the district's 25-year life span was not allocated in the agreement approved by the Oklahoma City Council on Dec. 16, 2008. Bryant said the remaining $49 million would be needed to cover interest costs on the financing of the projects.


Read more: http://newsok.com/oklahoma-citys-project-180-is-being-trimmed-down-a-few-degrees/article/3621052#ixzz1d896L5Ec

Pete, I'm just reporting the numbers I've been provided by the city's staff (and read back to them to ensure they're quoted correctly). Keep in mind it's a 25-year TIF, not 20 years...

Maybe that $750 MM appraisal came from the earlier estimated cost for the 54 floor 1.9 million sq ft tower...? Now it's 50 floor and 1.8 million sq ft.

Maybe that dropped the appraisal ???

Just a guess.

I realize it's a 25-year TIF but it's been previously reported that the property taxes don't kick in until the complex is finished and assessed. So, they had previously stated that they expect to collect taxes for only 20 of the 25 years.

This is one of the reasons Devon gave them the $95 million line of credit, so this work could get started right away and not wait on the cash flow from the ad valorem taxes which have yet to commence.


We need to see a detailed budget because these numbers don't add up and don't match what was previously reported.

Maybe that $750 MM appraisal came from the earlier estimated cost for the 54 floor 1.9 million sq ft tower...? Now it's 50 floor and 1.8 million sq ft.

Maybe that dropped the appraisal ???

No, the complex is still budgeted at $750 million; this was the final number (and still being reported by Devon) after the final revisions.

And remember, there hasn't been any appraisal yet. That won't happen until late next year, then property taxes will start in 2013. The TIF runs until 2033.

interest costs account for some of that extra cost

Studying the maps, 6th street is also another major casualty of the shortfall not in Dowell's area.

I just watched the video of Council today. Not only were there comments about Commuter Rail and EK Gaylord, but a great many questions from Shadid to Couch about these Project 180 issues. They both seemed to handle it well.

I just watched the video of Council today. Not only were there comments about Commuter Rail and EK Gaylord, but a great many questions from Shadid to Couch about these Project 180 issues. They both seemed to handle it well.

Sounds like it was a progressive meeting.

Could've said Just The Facts. (or does Kerry own the copyright?)

Yes, because whenever he writes, it's all just the facts...

So Gaylord may still be reconstructed.

Save Coney Island

http://blog.newsok.com/okccentral/2011/11/08/coney-island-hot-dogs/