I know it isn't a perfect situation but I think it still needs to be done. Think how many jobs it will create, the new look of DT, and what that does for future businesses who just might be looking at this city? You have to sometime step back and think outside the box. OKC is being watched around the country and this is just another sign of growth and stability. Not a lot of cities are building high rises so the fact we have several about to go up is impressive. With that said, if they get what they want in tax dollars, we should demand they add several more floors to at least a couple of the buildings! ;) Just remember how some people still hate the MAPS and all the money spent on it but this city would not be the city they live in now without it. I know it's not perfect but sometimes you have to fake it before you make it.

The amount listed in the OCURA agenda was high, but is in the range where you can discuss it. The new amount is way way too high. If ClayCo feels it's that risky a business venture then they shouldn't be proposing something like this. Build something smaller that they know the market can support.

The amount listed in the OCURA agenda was high, but is in the range where you can discuss it. The new amount is way way too high. If ClayCo feels it's that risky a business venture then they shouldn't be proposing something like this. Build something smaller that they know the market can support.

The entire thing did kind of have a "too good to be true" feel to it. I think there are a few things that need to be looked at.

If the city grants the TIF subsidy and the towers get built as rendered, will it set a new precedent and spur enough development that it would be worth it to the city? What is the worst that could happen? If the city denies with subsidy, will Clayco pack up and go home? Will they still build but something smaller and less ambitious? I think it's also worth looking at whether OKC's peer cities have/would approve such a thing.

Why can't we just be happy we are probably going to get 4 nice buildings with some residential elements to replace the previous eye-sore?

Why can't we just be happy we are probably going to get 4 nice buildings with some residential elements to replace the previous eye-sore?

I'm perfectly happy with the design. I just don't want the city forking over 1/3 of the cost for it.

You are the main contributor to the mis-information. If P180 wasn't TIF dollar used to fund roads what was it?

From the Alliance for Economic Development website (it is freaking #1 on the list):

Programs | Alliance for Economic Development of Oklahoma City (http://www.theallianceokc.org/programs)



and let me add - you have no way of knowing if these will be built if TIF funds aren't used AND if they can't be built without a taxpayer subsidy then maybe they shouldn't be built. We should wait for a project and developer to come along who can make a profit and expand the tax base at the same time - instead of one who doesn't expand the tax base, increase the cost to the existing base AND pulls funds from the existing base. In what world would the latter even be considered as a viable way of business?

Why did you leave out point number two when you quoted from that page? Was it an oversight or intentionally left out because it conflicted with your narrative? Here, let me help:


2. The developer or redeveloper can receive an allocation of TIF revenues to fund eligible TIF project costs in the form of “assistance in development financing” upon meeting conditions to the allocation
And, for the record, point one dealt with the CONSTRUCTION of public improvements (a la P180), not the maintenance of them, as you suggest. Boulder is 100% correct on this subject; TIF is an economic development tool. That is its ONLY purpose. That said, it is still debatable that such a gargantuan allocation is appropriate. Seems like a sky-high ask as a negotiation tactic, and I would guess that Cathy O'Connor beats it down to a manageable number/method.

I'm perfectly happy with the design. I just don't want the city forking over 1/3 of the cost for it.agreed

Why did you leave out point number two when you quoted from that page? Was it an oversight or intentionally left out because it conflicted with your narrative? Here, let me help:


And, for the record, point one dealt with the CONSTRUCTION of public improvements (a la P180), not the maintenance of them, as you suggest. Boulder is 100% correct on this subject; TIF is an economic development tool. That is its ONLY purpose. That said, it is still debatable that such a gargantuan allocation is appropriate. Seems like a sky-high ask as a negotiation tactic, and I would guess that Cathy O'Connor beats it down to a manageable number/method.

You get out of here with your logic and understanding of how neogiations work.

You get out of here with your logic and understanding of how neogiations work.

There is a difference between starting high in the negotiation process or giving a number so high that is becomes offensive.

Why did you leave out point number two when you quoted from that page? Was it an oversight or intentionally left out because it conflicted with your narrative? Here, let me help:


And, for the record, point one dealt with the CONSTRUCTION of public improvements (a la P180), not the maintenance of them, as you suggest. Boulder is 100% correct on this subject; TIF is an economic development tool. That is its ONLY purpose. That said, it is still debatable that such a gargantuan allocation is appropriate. Seems like a sky-high ask as a negotiation tactic, and I would guess that Cathy O'Connor beats it down to a manageable number/method.

Like!

Why did you leave out point number two when you quoted from that page? Was it an oversight or intentionally left out because it conflicted with your narrative? Here, let me help:


I left it out because I was refuting the misinformation BoulderSooner was putting out there.

And yet you were unsuccessful in doing so, AND the second point (which you left out) SUPPORTED his information (NOT misinformation).

HERE is the best example of recent MISinformation in this thread:

Worth it for whom? The whole purpose of the TIF was to establish a funding mechanism to support the public facilities within the TIF. If we continue to give away those tax dollars where is the money going to come from to maintain P180 streets in the future? If this goes through it will be the biggest bait and switch in the history of OKC. The entire push for urbanization was so that the tax dollars collected along public infrastructure paid enough to cover the cost of the infrastructure. If the City decides they don't want to do that then the whole idea of a tax sustainable downtown core is dead - just as it was finally getting started.
Just sayin'.

If the city grants the TIF subsidy and the towers get built as rendered, will it set a new precedent and spur enough development that it would be worth it to the city?

That part bolded in red in the problem - if we continue to give away all the tax revenue from development there will never be enough development to make it worth it. Clayco is asking to keep 97% of the tax revenue. If they get that deal then every new property owner in OKC should get that deal. Would we seriously allow that?

HERE is the best example of recent MISinformation in this thread:


Worth it for whom? The whole purpose of the TIF was to establish a funding mechanism to support the public facilities within the TIF. If we continue to give away those tax dollars where is the money going to come from to maintain P180 streets in the future? If this goes through it will be the biggest bait and switch in the history of OKC. The entire push for urbanization was so that the tax dollars collected along public infrastructure paid enough to cover the cost of the infrastructure. If the City decides they don't want to do that then the whole idea of a tax sustainable downtown core is dead - just as it was finally getting started.
NONE of that is correct. Just sayin'.

You're going to have to invest if you want to get results. If the TIF funds are available and you qualify; go for it...

For those following along who haven't clicked the link or who are scratching their heads, HERE is the COMPLETE text found at the link JTF posted. The text HE posted was intentionally left incomplete in an attempt to bolster an incorrect point. Judge for yourselves:

http://www.theallianceokc.org/programs


TAX INCREMENT FINANCE DISTRICTS

The City of Oklahoma City has 8 tax increment finance (TIF) districts. The districts were established pursuant to the Oklahoma Local Development Act and the State Constitution. The districts are all located in the core of Oklahoma City.

Tax increment financing (TIF) is an economic tool that Oklahoma City utilizes for promoting development in blighted, underserved, or economically distressed urban areas. TIF helps to fund new economic growth that will attract new investors, consumers, and employers into the area.

TIF monies can be allocated in two ways:

1. The City can construct public improvements (parking, infrastructure, streetscape, and/or landscaping improvements) on publicly owned land or easements

2. The developer or redeveloper can receive an allocation of TIF revenues to fund eligible TIF project costs in the form of “assistance in development financing” upon meeting conditions to the allocation

You can disagree with the idea of TIF in principle, but please refrain from fibbing about what it actually is.

It would be great to know how the funding and TIF investment compares to a similar project in a comparable city at the same comparable stage of renewal. Really it is hard to say if Clayco is unreasonable unless we know what happens in similar situations. You need to benchmark apples-to-apples and then see if this is reasonable or not. I assume the OCURA does this and that is why they will negotiate the terms and make the decision. Maybe Pete or Steve would have the ability to do a benchmark study, but without that information, it is impossible to say this is good or bad. If there is any transparency in what OCURA does, that information could be available to all to second guess their final decision.

It would be great to know how the funding and TIF investment compares to a similar project in a comparable city at the same comparable stage of renewal. Really it is hard to say if Clayco is unreasonable unless we know what happens in similar situations. You need to benchmark apples-to-apples and then see if this is reasonable or not. I assume the OCURA does this and that is why they will negotiate the terms and make the decision. Maybe Pete or Steve would have the ability to do a benchmark study, but without that information, it is impossible to say this is good or bad. If there is any transparency in what OCURA does, that information could be available to all to second guess their final decision.

Completely agree with this.

You can't really compare this project with something in Dallas or NYC because it's an apples to oranges comparison. I would like to know what kind of subsidies similar developments in cities that are similar to OKC or one tier up received. Somewhere like Nashville, Indy, or Charlotte.

Exactly. What cities are truly comparable in their phase of urban renewal and growth and in trying to step up to the next level. I would add maybe Cincinnati, Omaha, Knoxville or Memphis.

And yet you were unsuccessful in doing so, AND the second point (which you left out) SUPPORTED his information (NOT misinformation).

Go back and read what he wrote because it isn't what you think he wrote. Yes, there is clause #2 which allows for “assistance in development financing”. I can only assume this was added to assist with the development of properties that have some kind of environmental problem (the Steelyard) or in the redevelopment of a structure the city has an interest in keeping (the Fred Jones plant). I seriously doubt they intended that clause to be used to build on flat vacant ground with no environmental issues.

Tax increment financing (TIF) is an economic tool that Oklahoma City utilizes for promoting development in blighted, underserved, or economically distressed urban areas. TIF helps to fund new economic growth that will attract new investors, consumers, and employers into the area.

I'd hardly characterize the area where these structures are proposed as blighted, underserved, or economically distressed urban areas. Instead, the area is a developable gem created with the prior TIF monies allocated in the area, most specifically, The Devon TIF which was spread to the surrounding area. I'd certainly entertain an argument that by the definition in this paragraph, this project isn't eligible for TIF at all.

That ^

I would agree that the Stage Center site was not only blighted but underserved also. Now the South half might not be blighted, but what's proposed is a higher and better use, which makes it underserved at present.

I would agree that the Stage Center site was not only blighted but underserved also. Now the South half might not be blighted, but what's proposed is a higher and better use, which makes it underserved at present.

That blight was removed. If they needed TIF money it would have been for the demo.

Here's the way this breaks down (in millions):

North parcel (OG&E):
Officer Tower $200
Apartments $67.5
Total: $267.5
TIF request: $62.1

South Parcel:
Office Tower $216
Apartments $70
Total: $286
TIF Request $80.5


Total Investment: $553.5
Total TIF Request: $142.6

Pete, do you have official meeting minutes that contain these numbers or some other trustworthy primary source? They are so off from the meeting agenda (this (http://ocura-ok.org/sites/default/files/files/OCURA%20Board%20Meeting%20Packet%20-%20Final.pdf), right?) I'm having a hard time buying them as actually being real and in my limited knowledge of where to look I'm not seeing them posted anywhere else. I'm especially doubtful since the Journal Record article (http://journalrecord.com/2014/11/24/coming-up-authority-chooses-downtown-developer-plans-negotiations-over-tif-real-estate/#ixzz3K0ccuMaT) which was posted after the meeting still included the 89% figure from the agenda.


Both Milhaus and Clayco have requested tax increment financing to assist with the development
of the project. Both TIF requests related to the proposals would require the creation of a new TIF
district. Milhaus has requested a TIF allocation that would equal approximately 96% of the total
ad valorem taxes generated by their development. Clayco has requested a TIF allocation equal to
approximately 89% of the ad valorem taxes generated on their proposed project. Both of these
requests are significantly higher than what the City customarily allocates to projects. Therefore,
significant negotiations will be necessary before the financial structure and feasibility of these
projects are determined.


She said the city and OCURA will have a lot of work to do to negotiate a TIF package. Clayco partner Larry Chapman said he’s not concerned about having to negotiate the TIF package. The company requested TIF allocation equal to approximately 89 percent of the ad valorem taxes generated on the proposed project. The redevelopment is expected to cost $280 million.

Tax increment financing (TIF) is an economic tool that Oklahoma City utilizes for promoting development in blighted, underserved, or economically distressed urban areas. TIF helps to fund new economic growth that will attract new investors, consumers, and employers into the area.

I'd hardly characterize the area where these structures are proposed as blighted, underserved, or economically distressed urban areas. Instead, the area is a developable gem created with the prior TIF monies allocated in the area, most specifically, The Devon TIF which was spread to the surrounding area. I'd certainly entertain an argument that by the definition in this paragraph, this project isn't eligible for TIF at all.

I would add that there is nothing tricky about the site, other than the need to relocate a handful of tenants, which seems to have been already resolved. I could see the City helping out with those costs, but that would be very minor I'm sure.

It's a big, rectangular lot that is going to be completely scraped and doesn't have any issues with contamination or anything else. It's about as easy to develop as anything downtown.

In fact, the reason the north lot is all nicely assembled and easily cleared of just one newish building is because the City had already invested a ton of money to clear that lot for Stage Center.

That blight was removed. If they needed TIF money it would have been for the demo.

I would imagine that the overall project costs includes the demolition cost as well. That's more the norm than not.

If there is no tif and they built as projected. How much tax revenue does the City of OKC get?

If there is no tif and they built as projected. How much tax revenue does the City of OKC get?

They are basically asking for all their tax dollars to be returned in the form of TIF, so over then next 25 years that would be about $140 million.

Setting up more than a minimal TIF for this project bears a great resemblance to tipping heavily at Hooters. While you're leaking money it feels real nice, but at the end of the evening, the girl is gone and you're still the schmuck she wouldn't be caught dead with outside of work and you're certainly not getting laid. That said, she still deserves to get tipped for bringing you beer and wings.

It would be great to know how the funding and TIF investment compares to a similar project in a comparable city at the same comparable stage of renewal. Really it is hard to say if Clayco is unreasonable unless we know what happens in similar situations. You need to benchmark apples-to-apples and then see if this is reasonable or not. I assume the OCURA does this and that is why they will negotiate the terms and make the decision. Maybe Pete or Steve would have the ability to do a benchmark study, but without that information, it is impossible to say this is good or bad. If there is any transparency in what OCURA does, that information could be available to all to second guess their final decision.


Completely agree with this.

You can't really compare this project with something in Dallas or NYC because it's an apples to oranges comparison. I would like to know what kind of subsidies similar developments in cities that are similar to OKC or one tier up received. Somewhere like Nashville, Indy, or Charlotte.


Exactly. What cities are truly comparable in their phase of urban renewal and growth and in trying to step up to the next level. I would add maybe Cincinnati, Omaha, Knoxville or Memphis.

I asked this type of thing yesterday:


I would like to know what cities like Austin, Raleigh, San Antonio (Josh, this is on you) and Charlotte have done in the way of incentives. I bring up those cities because they have experienced a lot of growth lately more recently but are around OKC in regards to size. Was there a time where they were handing out incentives? Do they still hand them out? If not, at what point did they stop?

Oh geesh, and you all complained about my posts for wanting these mid rises to be taller? These TIF's are not ideal but instead of you all having a debating match on what you think is right, just trust that the leaders will negotiate a fair deal. I don't think anyone here will notice any difference in their pay checks but will see 4 or 5 buildings being built. These will be shown on TV, pictures of them in magazines as OKC is being featured quite often nationally. Like I said, think of the positives rather than the negative part of this. I have come to grips that they are only going to be mid rises rather than significant high rises, but also see the positives in all this the best I can. Perhaps Clayco should say no thanks and leave and we can stare at a demolished lot across from the Peake and MBG for years to come, that will look great for the country to see. The new boulevard will look great passing by the empty lot. Think about that?

I've started a spreadsheet to track all the various OKC TIF districts and then what has been funded or will be funded out of them.

Then, I'd like to do some research on what peer cities are doing in this regard.

There is simply no way for the City Council (who has final approval) to make an educated vote on this matter without a lot more information.


As of now, this is merely being characterized as required for this development to get done. Maybe so, but I'd sure want to know a lot more before setting this precedent.

I asked this type of thing yesterday:

It was such a good point, it needed repeating.

It was such a good point, it needed repeating.

I agree. I would like to know what Austin in particular did in the way of incentives. They probably don't do them now, but what did they do and what made them stop.

They are basically asking for all their tax dollars to be returned in the form of TIF, so over then next 25 years that would be about $140 million.

The city of Okc would get 140 mil in property tax dollars?

The city of Okc would get 140 mil in property tax dollars?

Yes.

1% of property valuation per year. $553 million in improvements x 1% = $5.53 million incremental property taxes per year x 25 years = $138.25 million.

Yes.

1% of property valuation per year. $553 million in improvements x 1% = $5.53 million incremental property taxes per year x 25 years = $138.25 million.

Okc doesn't get a dime from property taxes

Oh geesh, and you all complained about my posts for wanting these mid rises to be taller? These TIF's are not ideal but instead of you all having a debating match on what you think is right, just trust that the leaders will negotiate a fair deal. I don't think anyone here will notice any difference in their pay checks but will see 4 or 5 buildings being built. These will be shown on TV, pictures of them in magazines as OKC is being featured quite often nationally. Like I said, think of the positives rather than the negative part of this. I have come to grips that they are only going to be mid rises rather than significant high rises, but also see the positives in all this the best I can. Perhaps Clayco should say no thanks and leave and we can stare at a demolished lot across from the Peake and MBG for years to come, that will look great for the country to see. The new boulevard will look great passing by the empty lot. Think about that?

This is soooo painful.

Not sure I would compare Austin to OKC. Austin has many inherent attributes that make it successful without support from the government (plus it has lots of other governmental support in the form of a huge state capitol complex and 50K+ university, all downtown). When I think of OKC, I see a need to create the ambiance and infrastructure that will attract more investment. I look at the Clayco development as a bit of necessary infrastructure that will spur additional high-end development that is lacking now (except for the Myriad Gardens and Devon). While this cannot be sustained indefinitely, I still see a need to intervene with governmental support to create the type of city that we all seem to want to dearly here.

Okc doesn't get a dime from property taxes

Unless we use a tif

Not sure I would compare Austin to OKC. Austin has many inherent attributes that make it successful without support from the government (plus it has lots of other governmental support in the form of a huge state capitol complex and 50K+ university, all downtown). When I think of OKC, I see a need to create the ambiance and infrastructure that will attract more investment. I look at the Clayco development as a bit of necessary infrastructure that will spur additional high-end development that is lacking now (except for the Myriad Gardens and Devon). While this cannot be sustained indefinitely, I still see a need to intervene with governmental support to create the type of city that we all seem to want to dearly here.

Now, I am not talking about Austin now, I am talking about Austin when they first started experience massive growth, like OKC is experiencing now. My wife's cousin lives in Austin and has been there since 1995, so he has seen it blow up over the last 20 years, especially the last ten.

Okc doesn't get a dime from property taxes

What difference does it make if the property tax goes to the City or the County? It all gets spent in Oklahoma County.

What difference does it make if the property tax goes to the City or the County? It all gets spent in Oklahoma County.

And it's not entirely true, Oklahoma City gets money for Bond issues from Property Tax: Oklahoma County Assessor Facts and Questions (http://www.oklahomacounty.org/assessor/GeneralInfo.htm)

What upsets me the most about this egregious TIF request is the services that won't be funded because of it.
"Property taxes are an important source of revenue for local schools, vocational-technical education, libraries, city and county government. property taxes are the backbone of funding of local government and schools. Oklahoma’s property tax with some changes has fulfilled this basic function since statehood.

Generally, local schools receive the largest share of the property tax. Schools are followed by city bond issues, county government, vocational-technical schools, libraries, and city-county health department."

All of these services are in need still.
It also steals from other areas trying to come back but there will be no money. AND do we really think OGE is not going to ask for huge rate increases to subsidize their new headquarters.

I know many did not care for Stage Center but it was one of a kind, an original. Sterns has designed beautiful buildings but they have given us a re run design and multiplied it by 4. YAWN

Let's see what we can get without the TIF investment and what tax revenue it generates. Maybe that will be good enough. Would we be happy with a couple of Continental Resources style buildings and a giant surface lot that gets no TIF money? I exaggerate, as I am sure it would be better than that but still below inspirational level that Clayco brings.

delete this post. Thanks!

What upsets me the most about this egregious TIF request is the services that won't be funded because of it.
"Property taxes are an important source of revenue for local schools, vocational-technical education, libraries, city and county government. property taxes are the backbone of funding of local government and schools. Oklahoma’s property tax with some changes has fulfilled this basic function since statehood.

Generally, local schools receive the largest share of the property tax. Schools are followed by city bond issues, county government, vocational-technical schools, libraries, and city-county health department."

All of these services are in need still.
It also steals from other areas trying to come back but there will be no money. AND do we really think OGE is not going to ask for huge rate increases to subsidize their new headquarters.

I know many did not care for Stage Center but it was one of a kind, an original. Sterns has designed beautiful buildings but they have given us a re run design and multiplied it by 4. YAWN

What Geographer said. This is money that wouldn't exist if the development didn't happen. It's NOT money being pulled from some other fund or the city's coffers.

Maybe Clayco just wants to make sure the area stays nice over the next 25 years so they can charge higher rents. We don't want these housing units turning into a housing project,now do we.

Lets get these built

No one except JTF is saying "no TIF at all". But the amount of money they're requesting is way too high. These appear to be very nice towers and will add to downtown significantly. But they aren't something worth giving up all property taxes on. If all the market will support are two Continental Resources-level buildings, then so be it.

No one except JTF is saying "no TIF at all". But the amount of money they're requesting is way too high. These appear to be very nice towers and will add to downtown significantly. But they aren't something worth giving up all property taxes on. If all the market will support are two Continental Resources-level buildings, then so be it.

Truth be told, I am sure OKC can support the proposed buildings. It's just OKC is an unproven and untested market and too many developers try to stay on the safe side and develop something far below what the market will really support. Best case scenario these towers will be built and will be successful and will forever change outside developer perception of what's possible in OKC.

Truth be told, I am sure OKC can support the proposed buildings. It's just OKC is an unproven and untested market and too many developers try to stay on the safe side and develop something far below what the market will really support. Best case scenario these towers will be built and will be successful and will forever change outside developer perception of what's possible in OKC.

I agree with that. I'm just saying that ClayCo is acting like there's this huge immense risk here, which neccessitates the TIF award. I'm saying if they think that, then they should build more conservatively, not ask for a huge handout.

I agree with that. I'm just saying that ClayCo is acting like there's this huge immense risk here, which neccessitates the TIF award. I'm saying if they think that, then they should build more conservatively, not ask for a huge handout.

I would rather them just build the north parcel and forgo the south than to scale down both sides of the development. This needs to be done right.

Are you kidding?!? Go to the top of the page and look at where this site lies. Immediately adjacent are MBG, The Devon Energy Center, the Preftakes block(which he's already into for $23MM and will certainly develop nicely), an elementary school, the planned Convention Center and very likely convention hotel. It is arguably the best chunk of land in the state for development of the type proposed.

It is an island surrounded by high quality development and amenities resulting from private investment by others and massive amounts of public investment. It's an immensely valuable piece of dirt and you think we should cut someone a $140MM discount to acquire and make a profit from? If we're forfeiting taxes at this point it should not be on a prize chunk of land in the center of a furnace of development, it should be for a pioneer willing to take the first steps in C2S or along E. 23rd Street. This site will develop nicely by itself or with very modest assistance from local government.

Good point, and I would like to see what could be done with modest government assistance to understand if that is ambitious enough. However, I feel this site is worth making absolutely grand. Same for the Cox site. It has to be bold and commanding as the strip from the school to the transit building will be the centerpiece of the city. I would go for dramatic and world class and it will be worth every penny spent. It should set the standard all other developments in the city strive to match. If you don't start thinking big, it will never come on its own; it's too easy to play safe and stay in the middle.

There is a difference between starting high in the negotiation process or giving a number so high that is becomes offensive.

Standard is what 10% from what I've read? Clayco came in at 35%ish. They probably actually want in the 20% range. They'll argue such a big project requires big risk for both parties and this isn't a standard project that's why it gets to break the records. That would be my guess based on the many negotiations I've had to go through.

There's half a billion dollar development on the line here with a project that will dramatically change the skyline. Clayco knows they've got some leverage.

What Geographer said. This is money that wouldn't exist if the development didn't happen. It's NOT money being pulled from some other fund or the city's coffers.

It might be new revenue but it comes with new expenses as well. Those expenses have to be paid for by local government. Why should they get to keep all the revenue and not contribute to any of the expenses? Plus, why is there this assumption that this project doesn't happen without the TIF funds? Is Clayco pulling a Cabalas and threatening to build these in Edmond?

Also saying this is "new revenue" ignores the fact someone will develop these properties, even if Clayco doesn't.

It might be new revenue but it comes with new expenses as well. Those expenses have to be paid for by local government. Why should they get to keep all the revenue and not contribute to any of the expenses? Plus, why is there this assumption that this project doesn't happen without the TIF funds? Is Clayco pulling a Cabalas and threatening to build these in Edmond?

What new expenses. Would you rather they build on memorial?