City approves $2million incentive for Paycom

[metro]

OKC Council OKs almost $2M in Paycom pact
By Brian Brus
The Journal Record
Tuesday, March 23, 2010

OKLAHOMA CITY – City Council members approved nearly $2 million in economic incentives for the promise of almost 500 new payroll service company jobs in less than five years Tuesday.

Paycom Payroll LLC, which has been based at 4005 Northwest Expressway for 12 years, has already been adding 10 to 15 new employees per month for the last year in a strong growth trend, Chief Executive Chad Richison said. In order to keep up with its projections, Paycom needs more space for a new data center, so a deal was worked out with the city’s Economic Development Trust to develop the property, primarily with water and sewer utilities.

Funding will be provided through general obligation, or GO, limited tax bond proceeds, which were established as the economic development portion of the 2007 city bond election. That item allows Oklahoma City to provide performance-based economic incentives for companies that relocate or expand in the city.

Paycom’s principal products and services involve payroll, human resource, and time and attendance systems. Its Oklahoma City offices focus on software engineering and research, data processing and executive offices. Paycom has sales offices across the country, including Atlanta, Chicago, Dallas, Phoenix and Tulsa.

Richison said the new jobs will pay in the range of $30,000 to $120,000 annually, with most near $40,000. They will be primarily customer service positions to help new clients, in addition to administration, taxes, and software development. Richison said the metro area’s work force has two main characteristics the company seeks: a college degree and that they care.

The Greater Oklahoma City Chamber and city officials have been working with the company periodically since 2006, City Manager Jim Couch said in a memo to City Council members. The total estimated economic impact of the project is $100 million of the first three years, based on building, wages, and state and local taxes. The local sales tax and property tax revenue alone is expected to be $2.3 million over the first four years and $861,000 annually after that.

The contract also calls for Paycom to make a minimum capital investment of $15 million on the development of the company site within 30 days.

[OKC@heart]

Fantastic news! This is the kind of growth that we want to see and foster! Is the slated expansion of the facilities to occur at their existing location or is a move anticipated? Would love to see them move into vacated space downtown, but that is not always feasable.

[metro]

I believe they are moving to far W. Memorial Rd. They have several acres out there. There is an old thread on this from 2007, however they have not broke ground yet.

http://www.okctalk.com/okc-metro-are...w-offices.html

[Spartan]

I hope this doesn't end the same way most corporate incentives end. As soon as the money is received, the recipient vanishes from Oklahoma. Whether it's Rocketplane, MG, Gatorade, Google, Great Plains Airlines, and so on and so on and so on... Oklahoma sure has paid for a lot of bad companies.

[metro]

Spartan, I don't think this is the case. Paycom is a home-grown company, and one that is growing quickly. This is what Oklahoma's future is, NOT luring Fortune 500 companies that progressiveboy so often mentions. They also have to make a significant investment within the next 30 days.

The contract also calls for Paycom to make a minimum capital investment of $15 million on the development of the company site within 30 days.

[progressiveboy]

I hope this doesn't end the same way most corporate incentives end. As soon as the money is received, the recipient vanishes from Oklahoma. Whether it's Rocketplane, MG, Gatorade, Google, Great Plains Airlines, and so on and so on and so on... Oklahoma sure has paid for a lot of bad companies.

Agree with you strongly on this issue. It almost feels like the "Pipe Dreams" or "Boulevard of Broken Dreams" saga.

[soonerguru]

I share Spartan's concerns but hope it works out for the best. It is true that PayCom is an OKC born-and-bred company, however. I'm not entirely sold on their growth projections.

[Spartan]

I am also cautiously optimistic about the project, and I saw where they have to make a huge investment within the 30 day period--will they? I haven't heard of these plans. When is Paycom going to get the check, soon, or in two years?

While I'm cautiously optimistic, my earlier post was just to express how beleaguered I am by corporate incentives. I used to be a huge fan, not so much anymore. The thing that raised red flags was seeing the list of other cities where PayCom is. And my experience with Dot.com companies notwithstanding, as someone who was a kid in Houston at the time of the Dot.com bust (including my dad's dot.com business that didn't make it).

[Larry OKC]

I believe they are moving to far W. Memorial Rd. They have several acres out there. There is an old thread on this from 2007, however they have not broke ground yet.

http://www.okctalk.com/okc-metro-are...w-offices.html

If this is the case, how does this sit with those on these threads that are for increased density, concentrating on the CBD etc? Why does the City give incentives for them to build on the fringes of the City? Give them incentives to buil;d downtown as you have a lot of space that is going to be vacant when Devon completes their tower etc.

[soonerguru]

If this is the case, how does this sit with those on these threads that are for increased density, concentrating on the CBD etc? Why does the City give incentives for them to build on the fringes of the City? Give them incentives to buil;d downtown as you have a lot of space that is going to be vacant when Devon completes their tower etc.

Actually Larry I was thinking something similar. I guess they're now vacating their space on NW Expway for something even further out?

[HOT ROD]

I totally agree Larry, and hope the city saw it that way or at least TRIED to get them into Downtown. What a boon it would be if those 500+ jobs (in addition to those already there) were to come into downtown space that Devon vacates (or even better yet - space that is currently vacant).

I think the city probably can't yet raise it's hand to force companies into downtown (in order to receive investment dollars) but it would be nice if the city made it more attractive for companies to move into the CBD and less so for them to locate to the fringes. Especially white collar jobs such as these - they should have a focus for them to be downtown; blue and no collar jobs should be in the fringes/industrial areas.

The city could act as a liaison and steward to put building owners together with companies moving into/expanding in Oklahoma City. While I agree, a company expansion/relocation to the fringe is better than nothing, I think the city should get creative in expanding or at least (to start) filling up the CBD with a healthy workforce that surely would support increase retail, housing, and entertainment options we all want so badly.

To highlight this idea, maybe a company could locate the top jobs (exec, top admin, fiscal) to downtown office tower spaces in say 5,000-20,000 sq ft of floorspace and the lower jobs (data warehousing, customer contact, operations) to the fringes where large amounts of floorspace is needed along with low rent/cost to mfg. Here, we'd have higher dollar wage earners in downtown - which certainly would boost downtown's market profile and thereby - ushering in the new wave of retail we all want to see.

In this idea, everybody wins.

Oklahoma City needs to think out of the box.

On that note, OKC needs to focus/regroup fringe development AWAY FROM RURAL and into the already existing suburban sprawl areas. If we must have fringe development, let us USE UP the space we already have in the existing urban area footprint.

I say, the city's focus for the next 10 years should be:

1) corporate relocations/expansions into downtown by acting as liaison between property owners and corporations AND offering EASIER and maybe juicier Incentives to businesses who locate at least their top tier positions downtown

2) corporate relocations/expansions into the NW business district, Capitol business district, and SW business district; again by acting as liaison but having less juicy Incentives

3) corporate relocations/expansions into the fringe, provided buildings already existing in the urban area are utilized; again by liaison but having even less Incentives

4) corporate relocations/expansions into the fringe, if all else fails; these companies would need to locate in the already established urban area in order to receive the lowest level of incentive

5) corporate relocations/expansions into the fringe, if outside the urban area; the city provides a minimum level of service and encourage these companies to supplant the city for services and resources. This should DISCOURAGE companies locating to their own private ranch 30 miles away from downtown; but if such a company did so - we'd still benefit.

along with the 5 levels of business expansion/relocation, the city should encourage urban development throughout the entire city, with differing levels of 'requirements' as you move further out. Again, making things easiest for established buildings and new development in the CBD (build to property line, no limit on height, generous and easiest monetary incentive) that lessens as you move out to the fringe. Even still, fringe development should be required to have urban design and implement urbanized development (say with trees, retail, and housing surrounding a corporate campus) even if it is an island to itself.

I wish there is a way OKC could challenge EXISTING companies to abide with these guidelines, too. Again - we want all of OKC to be successful but the emphasis need to be on the CBD, then moving out with less incentive/help.

[Kerry]

Yet another reason why OKC should contract the city limits. Now the city has to spend $2 million for water and sewer when the there are more than enough empty lots around urbanized OKC that already have water and sewer. The city is subsidizing the very thing that has been killing it since the '60s. It is counter-productive.

[OU Adonis]

Where are all the call center haters? Haven't seen them show up yet in this thread.

[metro]

I am also cautiously optimistic about the project, and I saw where they have to make a huge investment within the 30 day period--will they? I haven't heard of these plans. When is Paycom going to get the check, soon, or in two years?

While I'm cautiously optimistic, my earlier post was just to express how beleaguered I am by corporate incentives. I used to be a huge fan, not so much anymore. The thing that raised red flags was seeing the list of other cities where PayCom is. And my experience with Dot.com companies notwithstanding, as someone who was a kid in Houston at the time of the Dot.com bust (including my dad's dot.com business that didn't make it).

More than likely, it's probably sales tax or some other similar incentive, so if they don't break ground on a $15million or more building within 30 days, they don't get the tax break or whatever.

I agree that the city should contract it's boundaries as it is counterintuitive for us to keep encouraging good corporations to move to Memorial Rd and beyond, however I don't see ANYONE including myself making a movement to deannex city limits.

[rcjunkie]

Where are all the call center haters? Haven't seen them show up yet in this thread.

They probably won't since this isn't a call center!!!

[Spartan]

I totally agree Larry, and hope the city saw it that way or at least TRIED to get them into Downtown. What a boon it would be if those 500+ jobs (in addition to those already there) were to come into downtown space that Devon vacates (or even better yet - space that is currently vacant).

I think the city probably can't yet raise it's hand to force companies into downtown (in order to receive investment dollars) but it would be nice if the city made it more attractive for companies to move into the CBD and less so for them to locate to the fringes. Especially white collar jobs such as these - they should have a focus for them to be downtown; blue and no collar jobs should be in the fringes/industrial areas.

The city could act as a liaison and steward to put building owners together with companies moving into/expanding in Oklahoma City. While I agree, a company expansion/relocation to the fringe is better than nothing, I think the city should get creative in expanding or at least (to start) filling up the CBD with a healthy workforce that surely would support increase retail, housing, and entertainment options we all want so badly.

To highlight this idea, maybe a company could locate the top jobs (exec, top admin, fiscal) to downtown office tower spaces in say 5,000-20,000 sq ft of floorspace and the lower jobs (data warehousing, customer contact, operations) to the fringes where large amounts of floorspace is needed along with low rent/cost to mfg. Here, we'd have higher dollar wage earners in downtown - which certainly would boost downtown's market profile and thereby - ushering in the new wave of retail we all want to see.

In this idea, everybody wins.

Oklahoma City needs to think out of the box.

On that note, OKC needs to focus/regroup fringe development AWAY FROM RURAL and into the already existing suburban sprawl areas. If we must have fringe development, let us USE UP the space we already have in the existing urban area footprint.

I say, the city's focus for the next 10 years should be:

1) corporate relocations/expansions into downtown by acting as liaison between property owners and corporations AND offering EASIER and maybe juicier Incentives to businesses who locate at least their top tier positions downtown

2) corporate relocations/expansions into the NW business district, Capitol business district, and SW business district; again by acting as liaison but having less juicy Incentives

3) corporate relocations/expansions into the fringe, provided buildings already existing in the urban area are utilized; again by liaison but having even less Incentives

4) corporate relocations/expansions into the fringe, if all else fails; these companies would need to locate in the already established urban area in order to receive the lowest level of incentive

5) corporate relocations/expansions into the fringe, if outside the urban area; the city provides a minimum level of service and encourage these companies to supplant the city for services and resources. This should DISCOURAGE companies locating to their own private ranch 30 miles away from downtown; but if such a company did so - we'd still benefit.

along with the 5 levels of business expansion/relocation, the city should encourage urban development throughout the entire city, with differing levels of 'requirements' as you move further out. Again, making things easiest for established buildings and new development in the CBD (build to property line, no limit on height, generous and easiest monetary incentive) that lessens as you move out to the fringe. Even still, fringe development should be required to have urban design and implement urbanized development (say with trees, retail, and housing surrounding a corporate campus) even if it is an island to itself.

I wish there is a way OKC could challenge EXISTING companies to abide with these guidelines, too. Again - we want all of OKC to be successful but the emphasis need to be on the CBD, then moving out with less incentive/help.

Does this really "hurt" downtown though? I would say one of the things that's always held downtown back was the lack of available Class A space, and Devon's vacating 4 towers MUST be looked at as an opportunity to some major business expansion, recruitment, etc.. I am glad PayCom is building new space, although I too dislike Memorial Road. The reality is that the majority of people living Downtown are commuting from Edmond, Memorial Rd, Norman, etc.. We know this from several studies on the matter.

The vacated space could be a problem if we lack the skill in setting up deals to get it filled, but I know we don't lack that. It should be a major opportunity to bring in some great new companies.

I agree though that here you have yet another instance of the CITY OF OKC reinforcing the suburban status quo, which they already do through parking requirements, strict urban building codes that make true lofts impossible, required setbacks for new development, lots of other bad regulations, and now incentivizing sprawl beyond the current fringes of any recognized business district. Is OKC serious about being urban and sustainable, and pro-21st Century? The answer is of course not.

[MikeOKC]

I agree with what a lot of Spartan just said. But on the other hand, if Paycom were to have been looking at other options in other cities (and we don't really know the details) before they reached this deal, would it make sense to say "Downtown or nowhere?" Of course not! Every great city in America has vital rings of office parks in the suburbs. Everything can't be downtown and we can't force downtown on companies that know what they want, own land in the outer rings and could possibly move out of OKC completely. It's still in Oklahoma City...and for that, we should be grateful.

[ljbab728]

More than likely, it's probably sales tax or some other similar incentive, so if they don't break ground on a $15million or more building within 30 days, they don't get the tax break or whatever.

I agree that the city should contract it's boundaries as it is counterintuitive for us to keep encouraging good corporations to move to Memorial Rd and beyond, however I don't see ANYONE including myself making a movement to deannex city limits.

Metro, I agree with you. I've been having a dialogue with Kerry in another thread about city limits. I agree that the city should do everything possible to encourgage density and limit urban sprawl, but deannexing does nothing to accomplish that.

[HOT ROD]

This is why I propose the city having a varying level of investment incentives, at least for a while. More incentive (and "Pro-Business" regulation) in the CBD; less so as you move out.

Fringe development would be supported, but wouldn't get the same encouragement for a period that CBD development would.

I do agree that a city need to have healthy rings, but OKC already has that. We need a healthy core - and this is why I think the city should have greater incentive and less restriction (only apply urban/urbanism/new urbanism in the core and none of hte other red tape) in the CBD for a period of time or until the CBD reaches a goal level of employment/residences/retail economic strength.

Yes, it is true that most major cities have rings but it is also true that most major cities dont JUST have successful rings ONLY. .... And OKC should recognize this and encourage more CBD development without discouraging development in the fringe; but offering greater incentive and less restraints in the core while also letting fringe development encounter more of their cost to develop and stand more on their own.

Again, Im proposing this 'shift' for a period of time - until downtown becomes the core again. It's on its way, but it could get a big push if the city would step up. the city could even be creative, like I had mentioned (have the top/office jobs downtown and the lower jobs that require a lot of space in the suburbs or fringe).

[andy157]

Spartan, I don't think this is the case. Paycom is a home-grown company, and one that is growing quickly. This is what Oklahoma's future is, NOT luring Fortune 500 companies that progressiveboy so often mentions. They also have to make a significant investment within the next 30 days.

30 days to invest 15 million? The article may have said 30 days, but are you sure it's not 30 months? Just asking.

[Larry OKC]

30 days to invest 15 million? The article may have said 30 days, but are you sure it's not 30 months? Just asking.

Regardless of the time frame (30 days or 30 months), it is prudent to put that type of clause in the agreement. Now it depends on if the City will enforce it or not. They apparently are when it comes to the $8M for the Outlet Mall ("infrastructure improvements - largely traffic and drainage systems - at a cost of about $2.4 million. The city also agreed to reimburse Horizon for regional marketing expenses worth up to $5.5 million over 10 years")

NewsOK

Oklahoma City outlet mall plans on track despite slumping economy (Oklahoman, 9/19/09)

Developers of a $65 million factory outlet mall planned for west Oklahoma City say the project is alive and well, even as city officials have put promised improvements in the area on hold.

Assistant City Manager Cathy O’Connor said designs for infrastructure improvements at Council Road and Interstate 40 are complete, but won’t be put out for bid until the city is assured the development is moving forward...

But the City didn't enforce the deadline on making the millions of $4.5M in improvements to the Cox for the AHL Hockey team (was stipulated the team had to be signed by the end of last year and it didn't happen for months later). This could have let the City off the hook for paying for the costs, but they are doing it anyway.

[andy157]

Regardless of the time frame (30 days or 30 months), it is prudent to put that type of clause in the agreement. Now it depends on if the City will enforce it or not. They apparently are when it comes to the $8M for the Outlet Mall ("infrastructure improvements - largely traffic and drainage systems - at a cost of about $2.4 million. The city also agreed to reimburse Horizon for regional marketing expenses worth up to $5.5 million over 10 years")

NewsOK

Oklahoma City outlet mall plans on track despite slumping economy (Oklahoman, 9/19/09)



But the City didn't enforce the deadline on making the millions of $4.5M in improvements to the Cox for the AHL Hockey team (was stipulated the team had to be signed by the end of last year and it didn't happen for months later). This could have let the City off the hook for paying for the costs, but they are doing it anyway.

I agree it is prudent to include this type of clause in the agreement. I hope that Paycom is successful and they are able to exceed their goals. If by chance they fail to uphold their end of the deal I hope the Citys clause is ironclad in its abilility to protect our investment. Though I'm glad our City is getting these new jobs, it seems that more times than not, these deals and their lofty upfront promisses fall short. The City has a pretty good tract record when it comes to letting companies off the hook.

[Spartan]

Ah yes, the outlet mall. Another big-time economic development success.. incentives every time!

[mugofbeer]

Ah yes, the outlet mall. Another big-time economic development success.. incentives every time!

Sometimes its a necessary evil to help a local company compete. Better they stay here with some incentives than move to Dallas like so many others have done - with incentives.

[andy157]

Sometimes its a necessary evil to help a local company compete. Better they stay here with some incentives than move to Dallas like so many others have done - with incentives.

I'm not sure how this outlet mall could be considered a "local company". I wonder sometimes. How did companies, local or not ever survive in the free market system prior to taxpayer incentives?