OG&E Energy Center

[David]

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, 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 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.

[Pete]

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.

[Bellaboo]

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.

[BoulderSooner]

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

[Pete]

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.

[Paseofreak]

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.

[warreng88]

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?

[soondoc]

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?

[Pete]

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.

[Motley]

I asked this type of thing yesterday:

It was such a good point, it needed repeating.

[warreng88]

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.

[BoulderSooner]

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?

[Pete]

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.

[BoulderSooner]

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

[Bellaboo]

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.

[Motley]

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.

[BoulderSooner]

Okc doesn't get a dime from property taxes

Unless we use a tif

[warreng88]

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.

[Pete]

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.

[LakeEffect]

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

[city]

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

[Motley]

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.

[Geographer]

delete this post. Thanks!

[bchris02]

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.

[OKCRT]

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