BIDs for south-side business: OKC Council approves funding to develop districts | The Journal Record (http://journalrecord.com/2015/02/24/bids-for-south-side-business-city-council-approves-funding-to-develop-districts-general-news/)

That is a little different than a TIF.

City of Oklahoma City | Business Improvement Districts (http://www.okc.gov/planning/b_i_d/index.html)

BTW, the City Council will be asked on Tuesday to approve a $200,000 TIF award for new HVAC equipment for the Underground; the downtown tunnel system.

OKC?s TIF trend provides grounds for debate | The Journal Record (http://journalrecord.com/2015/03/26/okcs-tif-trend-provides-grounds-for-debate-real-estate/)

OKC’s TIF trend provides grounds for debate
By: Brian Brus The Journal Record March 26, 20150

OKLAHOMA CITY – The tax increment financing concept has become trendy in Oklahoma City, with at least four new TIF districts in discussion by city leaders, raising concerns for some council members.

The First National Center on Robinson Avenue, for example, could benefit from some sort of financial boost to convert its street-level access and historic bank lobby space on the second floor to something more useful, Councilman James Greiner said. A temporary tax increment levied on stakeholders within the immediate vicinity and earmarked for redevelopment might work, with the assumption that improvements would attract more business and benefit everyone.

That’s the “but-for” premise Greiner can get behind, he said: Development is unlikely to occur but for TIF investment. He and Councilman Ed Shadid don’t always see eye to eye on weekly agenda items, but that is a point on which they both agree.

“TIFs have been an effective tool in increasing development interest in blighted areas,” Shadid said. “The state statutes are very clear on that. But there’s a huge risk of it being used outside of that stated purpose.”

He and Greiner said a TIF district seems inappropriate for the development of the recently razed Stage Center near the Devon Energy Center. Clayco, a Chicago developer with plans to build towers for OGE Energy Corp. on the property, approached City Hall in January with a request for $69 million in assistance.

“I want there to be an explanation for why a TIF is needed for something to be built there,” Greiner said. “That site is very valuable land that obviously someone wants to develop; they had a plan to begin with. So it’s hard to justify a TIF district.”

Brent Bryant, the city’s economic development program manager, said he couldn’t discuss details of ongoing negotiations with Clayco, but it’s possible the Stage Center area could be incorporated into a larger TIF district that would also support the development of parking space for a new MAPS 3 convention center. Bryant said that concept is being referred to as the South Central TIF; Shadid calls it a TIF within a TIF, because the City Council already approved a TIF district for the Devon Energy Center in 2007.

Another TIF district being discussed is the Core to Shore area between the planned downtown boulevard and the Oklahoma River, which could support new businesses and residential growth around the planned 77-acre central park. And Bryant confirmed that he’s heard mention of a potential TIF district on the south side of the river, although he has not been involved in any discussions about it.

Cathy O’Connor, president and CEO of the Alliance for Economic Development, said in an email to City Manager Jim Couch that other developers are pushing for districts of their own.

“I had a meeting with Kirk and Blair Humphreys last week that I need to talk to you about,” she wrote to Couch in September. “They want a TIF district and want it created now. My priority is Core to Shore first, but there is a bigger picture here that I need to talk to you about.”

O’Connor could not be reached for comment by deadline Thursday. Blair Humphreys is heading the development of the area around the former Downtown Airpark as a residential mixed-use concept known as the Wheeler District anchored by a social meeting space with a refurbished Ferris wheel.

“Everything that the city has planned for Core to Shore, they want to do for in the Downtown Airpark site,” Shadid said. “And the only reason I see is that (the Humphreys) own the land. So why should the city deviate from its 50-year plan of taxpayer-supported growth around the Core to Shore park to help someone else compete against that development? It’s very troubling, to say the least.”

Shadid said one of the aspects that concerns him most about TIF districts is that school districts will lose out on valuable property tax revenues. It’s the “but-for” clause gone awry, he said: Although schools wouldn’t normally benefit from increased taxes in a blighted area but for a TIF district causing economic development, they also miss out on standard market adjustments on those properties. Most TIF ordinance language simply earmarks the tax increment to development without yielding any percentage points to schools to compensate for inflation. Over the life of a 20-year TIF, that effect could be worth hundreds of thousands of dollars to a struggling inner-city school district, he said.

“We need to take a close look at what’s happening to the TIF concept and keep it true to the original intent,” Shadid said.

Ed Shadid is organizing a Town Hall meeting about TIF's:


Greg LeRoy, Executive Director of Good Jobs First, has spent decades studying state and local economic development incentives. Dubbed “the leading national watchdog of state and local economic development subsidies”, Mr. LeRoy promotes corporate and government accountability in economic development and smart growth for working families.

With OKC moving towards the creation of a Tax Increment Financing Zone to finance a publicly subsidized convention center hotel and parking garage, it is critical that the public understand best practices in cities throughout the U.S. so as to understand the potential ramifications to the taxing jurisdictions from whom the funds would be diverted, such as OKC Public Schools, libraries and the City-County Health Department.

After a presentation by Mr. LeRoy there will be ample time for questions from the audience.

https://www.facebook.com/events/1382378602090337/

Yet another "town hall". Where he brings in only 1 side of the story and a guy that already has a clear position. With out regard to our city or our situation.

This should promote just the kind of discussion that Ed wants. Ie one sided

But you could also say that this other side hasn't even been discussed by the City or local media. All we hear about is why we need TIF's and various public incentives because the City employs a bunch of people whose entire job is develop these incentive programs then dispense the money. There is zero discussion or information about the downside or even the particulars of these various programs, and no way of tracking and evaluating their effectiveness.

And in many ways the situation is even more extreme in OKC because we have almost no parameters on how money is dispensed.

All of this is why I took a lot of time to talk to the City about TIF Districts and to understand exactly how they work here. And I'm completely convinced that the people making final approval -- the City Council -- do not understand these matters very well at all. Several of them told me so.

Now, we are talking about vastly increasing the number of TIF Districts and the amount of money diverted from other taxing jurisdictions, primarily the public schools. It's long past time to broaden the conversation. The other side has been well-represented for a long time.

Stay on this Pete. It appears that the city is under the same pressure by big money to provide TIFs as the state is in to provide more and more tax credits. I appreciate your attempts to shine a light where others relish the dark.

I posted this on the Convention Hotel thread as well, but I will be speaking on the 5/21 Town Hall meeting on TIF Districts:

https://www.facebook.com/events/1382378602090337/

Greg LeRoy, Executive Director of Good Jobs First, will be the main speaker. While he will be talking about TIF's in general, I will focus on the particulars in Oklahoma City. How they are structured, how decisions are made, what projects have benefitted, etc.

Cathy O'Connor was invited but declined due to conflict of interest.

The meeting will be at the Tower Hotel on Thursday 5/21 starting at 6:30PM. Would love to see a lot of people from OKCTalk attend, learn and join in the conversation.

Another thing to consider about TIF:

A property can only increase 5% over time. If a whole area explodes in value, then anytime a sale occurs of a particular building, the taxable market can be reassessed and subsequently skyrocket.

A building recently sold on Western for $780k. The 2014 Market value was $476k and the taxable market value was $228k. The new assessment and taxable market value is now $779k. That's an increase of over 200% in taxes collected on that property.

So take First National of instance:

Assessed value in 2014: $3,250,000 and Taxable Market of $3,250,000.
Assessed value in 2015: $7,442,919 and Taxable Market of $3,412,499.

The sale is going to take place @ $23,000,000.
If the assessed value jumps to the sale price, then the Taxable Market will also jump to $23M. (I imagine the value jump will not be so substantial in this particular case)

That would make their ~$43k/year tax payment jump to ~$288k/year.

Of that extra aprpox $250k/year, $125k goes to TIF. $125k/year, 60% of which goes to a school means that in a very real way, TIF is taking away what amounts to 2 teacher salaries from OKC schools every single year, all off one building. (Absolutely no argument can be made that TIF is the reason FNC is selling for $23M even if TIF ends up being used to redevelop the building).

Any building within the TIF district that has sold in the last 5-10 years (and there have been a lot of them), especially if it was owned by an entity for longer than a period of 15 years, has seen an incredible increase in taxable market value. This is likely one of the many things that the original planners of TIF didn't take into account when planning for TIF, and why there is all of the sudden 3x+ the original amount planned for.

Thank you for painting this picture. I don't understand how anyone could argue that TIFs are taking real money from OKCPS.

^

That is all absolutely correct.

And as a reminder, even a 5% annual increase in property value represents a 339% increase in property taxes over 25 years, the typical length of a TIF assessment.

CPI adjustments are generally around 3% pretty consistently. That is why I suggested that one way to fix the problem (at least partially) might be to apply a CPI adjustment each year, to be captured by original taxing entities.

Any building within the TIF district that has sold in the last 5-10 years (and there have been a lot of them), especially if it was owned by an entity for longer than a period of 15 years, has seen an incredible increase in taxable market value. This is likely one of the many things that the original planners of TIF didn't take into account when planning for TIF, and why there is all of the sudden 3x+ the original amount planned for.

They don't need to take that into account because there are other appropriate checks on this. Establishing a TIF district doesn't provide an endless pot of money for however long a city or county is able to keep the TIF district in place--the TIF district is tied to a specific project budget in a project plan and once that project budget has been expended, the TIF district ends even if it hasn't yet been 25 years. That budget is supposed to be based on the projected revenues the district will provide (though it can be less). Often governmental entities are optimistic with the projections, but the review committee and government body when adopting the project plan is supposed to assess the financial impact of the plan, including whether the budget and projected revenues are realistic.

Therefore, when buildings are sold and re-assessed resulting in higher taxes, the TIF budget should be met quicker and the TIF district should end sooner. Also, as an additional check on the administering government's ability to sneak around by gradually increasing the budget to account for above-expected performance of the district, any amendment to the project plan that increases the TIF budget by 5% (on a cumulative basis, not each individual amendment) or more requires the amendment to go back through the same review committee and approval process that the original project plan had to.

Any problems with TIF, if there are any, are not with TIF itself--TIF is only a tool--but instead with the political process and accountability of those making decisions with regard to how TIF money is to be used.

They don't need to take that into account because there are other appropriate checks on this. Establishing a TIF district doesn't provide an endless pot of money for however long a city or county is able to keep the TIF district in place--the TIF district is tied to a specific project budget in a project plan and once that project budget has been expended, the TIF district ends even if it hasn't yet been 25 years.

Just so you know, that is not how TIF's work in OKC.

Just so you know, that is not how TIF's work in OKC.

That may not be how the nuts and bolts of how the City determines who is entitled to TIF (and how much) for development finance assistance (which is a project budget category in many--if not most--project plans), but that IS how the Oklahoma Local Development Act works, which is the statutory authorization for the use of TIF in Oklahoma to begin with, so if Oklahoma City's processes aren't following that framework they are violating the law.

All I can tell you is that for TIF #2, they originally budgeted for $47 million, 10 years in that was changed to $126 million and it will likely be much more than that by the end of the 25-year run.

All they did is change the original budget and keep collecting and spending.

All I can tell you is that for TIF #2, they originally budgeted for $47 million, 10 years in that was changed to $126 million and it will likely be much more than that by the end of the 25-year run.

All they did is change the original budget and keep collecting and spending.

I can guarantee you that the budget increases (5%+, cumulative) in the project plans went through the review committee(s) that have taxing jurisdiction representation (I think OKC uses multiple--the TIF 2/downtown and then separate ones for the Skirvin (TIF 3) and Devon (TIF 8) districts, at a minimum) and City Council for adoption. There's no way Dan Brummitt would have allowed it to go through otherwise, and the City would have lost the lawsuits it faced challenging the districts' validity through the years.

I can guarantee you that the budget increases (5%+, cumulative) in the project plans went through the review committee(s) that have taxing jurisdiction representation (I think OKC uses multiple--the TIF 2/downtown and then separate ones for the Skirvin (TIF 3) and Devon (TIF 8) districts, at a minimum) and City Council for adoption. There's no way Dan Brummitt would have allowed it to go through otherwise, and the City would have lost the lawsuits it faced challenging the districts' validity through the years.

That's a completely separate issue from the one you originally raised.

You said the TIF's expire when the budget is reached; I'm merely pointing out that has never happened with OKC TIF districts. They just keep collecting long after the initial budget is surpassed.

There are review committees but they are nothing more than rubber stamps. 100% approval across the board for all new TIF's, project allocations and budget adjustments.

That's a completely separate issue from the one you originally raised.

You said the TIF's expire when the budget is reached; I'm merely pointing out that has never happened with OKC TIF districts. They just keep collecting long after the initial budget is surpassed.

There are review committees but they are nothing more than rubber stamps. 100% approval across the board for all new TIF's, project allocations and budget adjustments.

The initial budget is amended along the way, using the processes outline in the Local Development Act. The amended project plan budget thereafter is the budget for purposes of the possibility of project cost expenditures ending a TIF district early. These review committees do contain representatives of every taxing jurisdiction that might be affected by the TIF district. And while, under the Local Development Act, those representatives may occasionally be outvoted by the total makeup of the committee (which includes representatives of the city or county adopting the project plan, all taxing jurisdictions, and members of the public at large selected by the other review committee members), Oklahoma City has actually placed further restrictions on itself by requiring all ad valorem tax increment districts to have the approval of a majority of the ad valorem taxing entities affected (Oklahoma City Code section 52-261 (link (https://www.municode.com/library/ok/oklahoma_city/codes/code_of_ordinances?nodeId=OKMUCO2010_CH52TA_ARTVII INDI_S52-261ADVAINDIAMTHPPCETAENRE))). If the review committees are simply serving as rubber stamps, then it goes straight to my original point--the problems aren't with TIF itself but with the political processes and accountability of the decisionmakers.

If the review committees are simply serving as rubber stamps, then it goes straight to my original point--the problems aren't with TIF itself but with the political processes and accountability of the decisionmakers.

Completely agree.

They don't need to take that into account because there are other appropriate checks on this. Establishing a TIF district doesn't provide an endless pot of money for however long a city or county is able to keep the TIF district in place--the TIF district is tied to a specific project budget in a project plan and once that project budget has been expended, the TIF district ends even if it hasn't yet been 25 years. That budget is supposed to be based on the projected revenues the district will provide (though it can be less). Often governmental entities are optimistic with the projections, but the review committee and government body when adopting the project plan is supposed to assess the financial impact of the plan, including whether the budget and projected revenues are realistic.

Therefore, when buildings are sold and re-assessed resulting in higher taxes, the TIF budget should be met quicker and the TIF district should end sooner. Also, as an additional check on the administering government's ability to sneak around by gradually increasing the budget to account for above-expected performance of the district, any amendment to the project plan that increases the TIF budget by 5% (on a cumulative basis, not each individual amendment) or more requires the amendment to go back through the same review committee and approval process that the original project plan had to.

Any problems with TIF, if there are any, are not with TIF itself--TIF is only a tool--but instead with the political process and accountability of those making decisions with regard to how TIF money is to be used.

Well that's good to know. This point likely makes a better case for Shadid to just simply talk about it. If citizens are at least aware that TIF is a thing, then they can at least track it enough to know what was originally proposed and when an amendment for a higher budget is necessary. It would have been nice to know this however many years ago when they upped it some 250% to at least ask why? We could at that point maybe get some sort of voice in there.

Personally, I would have asked that we spend some of the $9,000,000 we plan on spending for Parking on other Public School projects, or further enhancements to street-scaping/walkability issues downtown (ex. Canopies like at Park Harvey on more buildings would awesome).

The meeting will be at the Tower Hotel on Thursday 5/21 starting at 6:30PM. Would love to see a lot of people from OKCTalk attend, learn and join in the conversation.

Is this a ticketed/paid event, or is it free and open to the public? I assume it's the latter, but I don't want to show up and be turned away due to lack of planning on my part.

Is this a ticketed/paid event, or is it free and open to the public? I assume it's the latter, but I don't want to show up and be turned away due to lack of planning on my part.

Completely free! All are welcome.

Ed brought up this meeting and Pete and OKCTalk specifically in this morning's city council meeting, followed by an interesting discussion about TIFs and their use here and around the country.

Here's how I became involved in all of this...

In the course of many threads where TIF was discussed, I realized there were many aspects of the program I didn't completely understand. So, I started researching and I found a bunch of conflicting information -- especially in how TIF's were defined -- and decided to investigate further.

I had many conversations and emails with Brent Bryant who basically administers all the TIF districts for the City. Over a period of several weeks, Brent sent me spreadsheets and various data, which led to more questions.

Ultimately, I wrote the article that you see at the top of the page. Shortly thereafter, Ed contacted me. I had met Ed but had very little interaction with him other than the one time he came to an OKCTalk get-together.

Ed then started to ask me more questions, realizing there were many aspects of the program he didn't fully understand himself. After that, he directly questioned both Cathy O'Connor and Brent Bryant in City Council meetings on the subject of TIF's.

In my conversations with Brent and also talking to many local developers, it became known there were a whole bunch of TIF's in the pipeline.

Now facing the shear scale of all this -- as in hundreds of millions of tax dollars -- Ed started asking more questions and we continued to talk about all this.

Ultimately, he arranged for this Town Hall and got Greg LeRoy be a guest speaker. Mr. LeRoy runs a nonprofit that has done a ton of research on economic development programs, including TIF's.

Ed also asked Cathy O'Connor and Brent Bryant to speak, but my understanding is that they both declined for various reasons.

Needing an OKC perspective (TIF's are administered very differently all over the country) Ed asked me to present pretty much along the lines of the article you see here. I was apprehensive but ultimately decided I'd like to help further the conversation, especially as the City is set to consider any number of new TIF Districts.


It should be a very interesting discussion. There will also be a Q&A towards the end of the meeting.

I highly encourage people to attend, learn and form your own opinions rather than rely on what others may be saying about all this.

The council meeting has been posted to YouTube and the TIF discussion starts at 1h 26m (https://www.youtube.com/watch?v=j28heUUDcj8&t=1h26m30s) in.

Thanks, David. Here's that video:

j28heUUDcj8

Be sure to keep watching after Ed finishes, Pete White starts back in on the topic a few minutes later.

And to be clear, I don't think Shadid or anyone else is proposing that TIF's should no longer be used at all, but he did say in the council meeting today that 'comprehensive reform' is needed and that the taxing jurisdictions most directly affected -- most notably public education -- need to be better educated on this topic and brought to the table in a meaningful way.

As a reminder, only after persistent questioning by Shadid did it come out that the only person even aware of what was happening with TIF's for OKCPS was a non-board member who was actually no longer even working there.

Since the light has started to be shined on all of this, Cathy O'Connor has had several meetings with the school board and superintendent Neu.

Whatever your opinions may be on TIF's, that is a positive outcome and I strongly believe a better understanding of these programs will be very beneficial to the entire City.


Please come to the Town Hall and participate in this process.

The Town Hall meeting was last night and it was certainly an interesting experience.

Greg LeRoy spoke first and talked a great deal about economic development incentives and challenged many assumptions about them. Then he gave some examples of TIF's that worked well and then a bunch that didn't.

My role was to summarize how the programs work in OKC, as each community tends to implement these programs much differently. I basically presented the information included in the article on the top the page.

Because my info was more specific and included specific budget numbers, I was pretty bombarded with questions. People were respectful but certainly some came to the meeting expecting to be outraged and there was a little of that.

I did my best to present the other side of things -- meaning explaining why TIF is used and where it has worked well in OKC -- because things seemed to be skewed a bit too much the other way.

I'd really like Teo to give his impressions, as he was in attendance and would have a more objective view.

There were about 200 people there, which I found very impressive given the completely non-sexy and obtuse nature of the subject. We actually had to cut off the questions due to time constraints but many people stayed afterwards and I'm hoarse from all the talking. Frankly, I was very impressed that so many people care about OKC.

The whole thing was video taped and I'll post it here when it has been uploaded.

It's fascinating to me how little so many people know about them (myself included). Seems to me that maybe less than a handful (5 or less) with the city even understand them. It is encouraging to hear that the city and OKCPS are having meetings about it.

Pete, do you know if anyone from OKCPS was at the meeting, or anyone else from the city proper besides Ed?

Pete, do you know if anyone from OKCPS was at the meeting, or anyone else from the city proper besides Ed?

Before the Town Hall, Ed and Greg LeRoy had meetings with the school board and then another with Cathy O'Connor and I believe councilman White. Others may have been present as well.

There were some teachers at the meeting last night, some developers and a ton of people I didn't know or recognize.

Here were my thoughts:

1. Incredibly impressed with Ed Shadid's ability to bring in 2 speakers who are clearly well informed on the subject and gave a bunch of insightful information to a group of people who knew nothing about the topic and you could tell by the questions that people really did begin to gain an understanding of the issue as the night moved forward.

2. I didn't know exactly what to expect when I got there, neither of the presentation nor the crowd. My assumption was that I would know most of what Pete talked about, no real expectations about Greg Leroy's presentation, and I expected Ed to put his stamp on the conversation. The crowd, I didn't know what to expect at all, but I assumed it would be a lot of Shadid followers. The crowd got riled up there for a little bit, as you can imagine when you start throwing out numbers north of $100M, and I don't think that's just Shadid's followers wanting to get riled up to get riled up (though there were some fanboys there for sure).

3. I was INCREDIBLY impressed by how objective all three speakers were. I had a small expectation that I was going to leave the meeting sort of annoyed that nobody really stood up for TIF and by the end of it, I think we saw that all three speakers, especially Ed and Pete, think there is a place for TIF in our city.

4. It's very apparent to me that this conversation was necessary. Greg LeRoy gave a ton of examples of TIF becoming an unconfined monster in other cities. TIF has been great in OKC, but we need to come in and refine our practices: place some safeguards and parameters that ensure that it functions exactly as we want it to and most importantly, in a way that opens up the availability to get ahold of it to people who have less resources. Everyone who has applied for TIF is a big-time player, and there's no reason that any of us average citizens shouldn't be able to get ahold of TIF to use on projects of a smaller scale.

Overall, I thought it was an excellent event for our city. I think it ended up being a classroom on TIF more so than a conversation because it was clear that over 95% of the audience was hearing these things for the first time. There was some talk about schools, but even more about the convention center hotel, but the majority of the meeting was just information, so I'm not sure it was labeled correctly title-wise.

How much of Leroy's negative experiences were influenced by his early career in the most corrupt and morally bankrupt city in the entire nation (Chicago)?

Thanks for that wrap up Teo

Pahdz, I'm sure quite a bit, but Chicago is not the only place TIF has been ridiculous…It has absolutely bending Missouri over.

And for sure he gave some great examples of where it's worked beautifully, and which are far more compelling than it has ever functioned in OKC.

In my very very brief conversation with LeRoy afterward, he mentioned that one of the reasons TIF is such a big thing is because Federal money has and continues to dry up for cities leaving gaps in their ability to finance bigger projects.

The only thing that troubled me last night was that Ed revealed that we have recently started to borrow against future TIF collections in order to award certain allocations, but he didn't know how the money was borrowed and who it was borrowed from. I doubt any of his counterparts on the horseshoe know either, and that's another example of why this conversation needs to happen. I'm not at all against borrowing money. I am against our council people not being very explicitly informed on how these things function before city staff recommends them take action one way or another.

Oh I know, I was just making a general comment on Chicago in general, not really about TIF's there. We won't even open a location there because of the known corruptness in city and local governments (so I've heard, probably not the only reason).

Everyone who has applied for TIF is a big-time player, and there's no reason that any of us average citizens shouldn't be able to get ahold of TIF to use on projects of a smaller scale.

I want to remodel my house. Should I be able to get TIF for that?

Yes! Particularly if you are in a "blighted" neighborhood.

If you've got a crack in your sidewalk, you could probably meet the criteria for blight.

Remember, the Clayco project on the edge of Myriad Gardens is going to qualify.

If you've got a crack in your sidewalk, you could probably meet the criteria for blight.

Remember, the Clayco project on the edge of Myriad Gardens is going to qualify.

I think the way the Local Development Act is written does not require every parcel of land that will be receiving TIF money to individually qualify as a blighted area--only the overall project area as a whole, and even then only at the time the project plan is first adopted.

This is a write-up the Red Dirt Report did on the TIF Town Hall:

Transparency nonexistent with Oklahoma City's eight TIF projects, councilman says | Red Dirt Report (http://www.reddirtreport.com/red-dirt-news/transparency-nonexistent-oklahoma-citys-eight-tif-projects-councilman-says)

Doesn't mention yours truly but this is me at the podium:

http://www.reddirtreport.com/sites/default/files/tifevent.jpg


Eventually, the video tape of the entire meeting will be made available.

The Journal Record had a story about TIF yesterday:


Cities outline ABC’s of TIF process
By: Brian Brus The Journal Record August 26, 2015

OKLAHOMA CITY – Yukon’s approach to tax increment finance districts has helped it avoid some of the controversy dogging TIFs in other cities such as Norman, City Manager Grayson Bottom said.

The rule is simple, he said: Set goals at the beginning and let them stand; don’t change course in midstream if possible.

“Depending on their structure, TIFs are the single-most important economic development tool in Oklahoma,” Bottom said. “We sincerely tried to make an effort to not change anything once we went through an extensive planning process up front, and I think that has made all the difference.

“It’s when you start trying to adjust along the way that you run into issues,” he said.

Tax increment finance districts are allowed under Oklahoma’s Local Development Act to enable municipal governments to use local taxes and fees to finance certain public costs of development. Projects financed by TIFs must serve a public purpose such as creating employment or turning around blighted areas – Oklahoma City’s first TIF, for example, was dedicated to promote development near the Oklahoma Health Center, spurring private investment by the healthcare, bioscience and technology industries.

Once a TIF district is created, the current assessed values of properties or sales tax revenue in that zone are set as a base. Until the TIF’s deadline, which cannot be more than 25 years, tax revenue collected above the base are dedicated to the project.

Brent Bryant, Oklahoma City’s economic development program manager, agreed with Bottom that establishing goal benchmarks is important to the process. Oklahoma City’s eight TIFs have been successful overall, he said, although at least one, the Las Rosas residential development south of the Oklahoma River and west of Interstate 35, has fallen short in generating extra taxes.

Other cities have found success as well. In Elgin, for example, Mayor Larry Thoma said the $3.35 million TIF established in 2008 has helped develop the city’s enterprise zone and attract two new companies. The TIF is scheduled to expire in 2033. Likewise in nearby Lawton, where a $50 million TIF established in 2006 is supporting business development while eliminating a blighted area.

Norman Finance Director Anthony Francisco would only speak to the administration of his city’s second TIF, which he called the most complicated in the state. The city’s first TIF was a much smaller project at $125,000 for improvements to Campus Corner, originally envisioned as a parking garage but ultimately ended up being used for streetscraping improvements.

In Norman’s case, the current $54 million University North Park TIF bounded by Interstate 35 and Westheimer Airport was designed with safety measures against luring existing businesses from other parts of the city, he said. That requires a lot of calculations for Francisco’s staff because the previous sales tax bases of those companies are subtracted from TIF district calculations, reducing the benefit of moving.

Aside from that bookkeeping challenge, however, Francisco said he felt that the TIF has already met its original goals of business development and is providing enough new revenue to consider additional projects.

“It’s done great things for the Norman area,” Norman Councilman Kyle Allison said. “It’s produced retailers that we didn’t have before and the Embassy Suites conference center is bringing visitors to Norman.”

But as city leaders developed the Norman Forward initiative this year, the nature of the TIF was brought into question: Could a $7 million expo center within the $143 million package of capital improvements under Norman Forward be combined with TIF funds? Councilman Greg Jungman has been opposed to the TIF for not meeting its goals, but he supports the thrust of Norman Forward.

Bottom said his city’s first TIF, just one year old now, is progressing so well that the city is planning to launch a second TIF within a few months. The initial $37 million sales tax TIF is ahead of budget to support commercial real estate development just west of Integris Canadian Valley Hospital. The next TIF will be focused on developing public gathering space on Main Street around a new City Hall.

The Alliance for Economic Development is now proposing a huge TIF district that would include 7 or 8 sub-TIF's.

This would take the place of the proposed South CBD TIF and Core to Shore TIF, which had already been approved for initial study by City Council.

Cathy O'Connor presented the idea to council members in private meetings a couple of weeks ago.

The boundaries below are not exact but an approximation of what was proposed. Within the boundary would be several TIF districts that would commence at different times but all starting within the next 15 years and running for 25 years each, meaning the total period would be about 40 years.

Note that 499 Sheridan has been specifically excluded, which means it along with everything outside this boundary in the CBD would only contribute to the existing TIF until it expires in 2025, at which time all the property tax would then go to the usual recipients. I believe this change was due to pressure by the OKC Public Schools, as they are the entity most heavily impacted by TIF redirections.

Not sure when they plan to bring this to a public City Council meeting, but it will likely be soon.



http://www.okctalk.com/images/pete/oldtif.jpg

http://www.okctalk.com/images/pete/hugetif2.jpg

Thanks for the great info Pete, I am curious how much land the city owns in this future TIF? For land they do own I assume they will issue RFP's as thing develope, which will let them control the type of developments but I feel with this TIF they need to set a design standard( on top of the new PLAN OKC because I am not quite sure when it starts) and or a design committee. They have a unique opportunity where they practically get to start from scratch to help build downtown neighborhood but they can't just let developers have free reign if we are allowing a TIF district here.

They also need to be fairly consistent with how money is given out. Start from the beginning by not handing out money when things are done just over the bare minimum. I think it was JTF that has suggested a set building standard where just the insides change based off the type of set design they choose but I think something like that could go a long way in encouraging a consistent idea as well as making TIF a bridge gap if there are land problems, utilities, roads, etc instead.

My last thought is the lack of the Wheeler district, I am sure they have been in talks to set one up for their district but I am curious what would be the difference of an additional one vs being in this giant one. Perhaps the Wheeler could be included in a new one with Capitol hill but the more districts they create, I think the more opposition they will create.

I can't wait to see what their budget is.

Really wish they would shorten these to 15 years.

I think Title 62, Section 856 of the Oklahoma Statutes (http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=438448) requires TIF districts to become effective no later than 10 years from the date the underlying project plan is approved. 35 vs. 40 years as a shelf life might not sound like it'd make that much of a difference, but considering that would be at the tail end of the TIF district (theoretically and most likely the period where the assessed values for the district are at their highest), those 5 years mean a lot if you're talking how much OKCPS will be getting in tax revenue and when.

Does anyone know the boundaries/have a map of the new First National TIF district?

Does anyone know the boundaries/have a map of the new First National TIF district?

I believe it will just be the boundaries of the FNC itself.

The City has posted the proposed Core to Shore TIF plan and the proposed amendments to the Downtown TIF plan on their website: http://www.okc.gov/economicdev/tif_project_plans.html

Thanks. Look forward to going over all this in detail.

There was a very interesting presentation about this topic at this morning city council meeting.

Presentation: http://www.okc.gov/councilnotes/2016/020916files/TIF%20presentation.pdf
Video: https://youtu.be/vZ8CJU3erk0?t=1h8m12s

There was a very interesting presentation about this topic at this morning city council meeting.

Presentation: http://www.okc.gov/councilnotes/2016/020916files/TIF%20presentation.pdf
Video: https://youtu.be/vZ8CJU3erk0?t=1h8m12s

This was fascinating level of detail. I get the sense that some of this presentation was "defense" against the accusations that TIFs are mis-used. I am very curious as to Pete's take on this since he has thought about TIFs a lot more than I have.

^

I've looked this over and have also put in an open records request for more detail.

Bottom line is that they are giving TIF investment lots of credit for causation they cannot and have not even tried to prove.

Classic violation of the statistical axiom, "Correlation does not imply causation". In other words, they are saying that TIF money has caused all this private development and increased property value but cannont show any direct causation. They have no way of knowing if all that would have happened with or without TIF, and it is disingenuous to claim otherwise, as they always do.

Also, they are carving out all these new TIF districts around Core to Shore... How much public investment do went need to make in this area????:

- Convention Center
- Convention Hotel
- MAPS 4 Park
- Substation move
- Chesapeake Arena
- Skydance Bridge
- Have already spent TIF money here
- New boulevard
- New I-40 and off-ramps and surrounding roads

I'll have a complete list with the total amount of tax dollars already spent in the area.

And, we already have 4 major developers who have snapped up almost everything between the park and Farmer's Market. They bought all of that with development plans in mind and zero TIF assurances.

BTW, TIF #2 ( the main downtown TIF) is now expanding it's budget to $165 million, where it was originally budgeted to collect $47 million. They revised it just a year after extending to $160 million. Still 9 years left to run as well.

We could and should use all this overage for Core 2 Shore (which TIF #2 already covers) rather than create yet another series of TIF's that will run 25 years and siphon off hundreds of millions or tax dollars beyond current estimates.

Bottom line is that they are giving TIF investment lots of credit for causation they cannot and have not even tried to prove.

Classic violation of the statistical axiom, "Correlation does not imply causation". In other words, they are saying that TIF money has caused all this private development and increased property value but cannont show any direct causation. They have no way of knowing if all that would have happened with or without TIF, and it is disingenuous to claim otherwise, as they always do.

It looks to me that the City is assuming that projects where it directly awards TIF money would not happen without the public assistance (I suppose whether you agree with that proposition depends on your thoughts about how rigorous the City's vetting process is for those applications), and that things that happen without direct TIF assistance are only partially due to public investment. Or at least that's how I interpret the 50/50 and 25/75 splits with taxing entities for what the two plans in the presentation calls "indirect" increment. In fact, one could argue that by reducing the split from 50/50 in downtown to 25/75 in Core to Shore, the City is admitting that public investment will not cause as much of the growth there as it believes it has in downtown.

The change in split is entirely due to this site documenting and explaining how TIF actually works (and councilmen Shadid and White then taking up the cause) and getting the schools and other affected jurisdictions at the table.

Before, they really had not idea how all this impacted them, just like almost everyone else, as TIF is incredibly complicated.

The City had to get their support in order to move this forward but at the same time they are doing it with things like the latest presentation which prevents a slanted and incomplete picture of how all this works.

I'm not accusing anyone of dishonesty, just full-time City staff with Economic Development in their titles doing everything they can to get hundreds of millions of tax dollars to forward their agenda.

One reason we can't make a good judgment about the TIF 'But For' argument (this would not have happened But For TIF dollars) is that the people involved do not document and/or share the requests they reject.

The process is this: a developer goes to see Cathy O'Connor or Brent Bryant to have an informal conversation about possibly receiving TIF funds for their project. I have been told by several developers they are often either told a flat 'no' or strongly discouraged from applying.

We also don't have a list of people who made formal application and were denied.

So, we have no way of assessing the projects that went forward even after being denied TIF.

I know of one for sure: the Frank Apartments in Midtown. They made formal application and were flat denied and are now nearing completion.


On the other side, we have a long list of projects which have received TIF funds but have absolutely no idea if they would have happened without gifted tax dollars. Consider the average TIF award is 6 to 7% of construction costs (not including furniture fixtures and equipment) it's hard to believe these projects would have not been built anyway.


Remember, when TIF started in OKC 16 years ago, the City was a very different place. No MAPS, not much going on. TIF was seen as a necessary stimulus.

At what point do you stop pouring tax dollars (redirected mainly from the OKC public schools) into private investment? We've now invested over a billion in public tax dollars in this area... Isn't it time to let developers and market forces work on their own?

...Remember, when TIF started in OKC 16 years ago, the City was a very different place. No MAPS, not much going on. TIF was seen as a necessary stimulus...
It doesn't really change your points, but MAPS was actually passed 7 years before TIF, and a number of its projects were completed (ballpark, canal, fairgrounds improvements, Oklahoma Spirit trolley, Myriad convention center improvements) or WELL underway (Civic Center, MAPS arena, river improvements). The only MAPS project not completed or well under construction at the time of TIF 2's passage was the library.

www.okc.gov/maps/index.html