TIF Districts

[Just the facts]

Not the 'entire block'; the size of the parcel the building is on. The tower has 6X more floor area than the size of the lot it is on, and since it is 30 stories, it would take six 5-story buildings (each with the same floor plate size) to cover the whole lot - and it would still just warrant a ranking of 6. So what to you would be more dense - a lot 100% filled with six 5-story buildings or the same lot with a single 30 story building taking up 1/6 of the block's area (with 5/6 being grass)?

[pickles]

For the love of Pete. If your calculation for measuring density puts Sandridge at 6 and The Edge at 2.5, you have a seriously flawed formula.

Clearly you ought be in charge of determining what might be an appropriate calculation.

[Just the facts]

Clearly you ought be in charge of determining what might be an appropriate calculation.

I wish. Of course, I wouldn't care what the lot coverage area is since I would require the building to be built all the way to the sidewalk. They can do whatever they want on the interior (see the interior courtyards at The Steelyard). Alas, this is the very reason why OKC should adopt a simple form-based code and get rid of all the ridiculous calculations.

[hoya]

Not the 'entire block'; the size of the parcel the building is on. The tower has 6X more floor area than the size of the lot it is on, and since it is 30 stories, it would take six 5-story buildings (each with the same floor plate size) to cover the whole lot - and it would still just warrant a ranking of 6. So what to you would be more dense - a lot 100% filled with six 5-story buildings or the same lot with a single 30 story building taking up 1/6 of the block's area (with 5/6 being grass)?

I'd prefer a 30 story building and then 5 more 5 story buildings, but that wasn't given as a choice.

The city should focus on achieving both height and dense coverage of the lot. The World Trade Center in the middle of 160 acre field would still have a pretty good FAR, but would make for a crappy city. But a city with no height at all, especially in the US, is a city that gets overlooked. It's not just the people driving by on the interstate that like tall buildings, it's people seeing the city on TV when the Thunder are playing. More towers equals more exposure, and a higher profile for OKC.

[ljbab728]

http://www.oklahoman.com/article/538...klahoma%20City.

Two new tax increment finance districts, one which could help finance a convention hotel and parking garage south of downtown, could become a reality later this year.

Cathy O’Connor, president of The Alliance for Economic Development of Oklahoma City, proposed the two districts as more than $1 billion in development is set to be built west and south of the Central Business District.

Tuesday, the city council approved moving forward with efforts to create a “South Central Downtown TIF,” which would be bordered by E.K. Gaylord and Western avenues, Main Street and the future Crosstown Boulevard, and a “Core to Shore TIF” south of the boulevard, north of the Oklahoma River, east of Western Avenue and west of Lincoln Boulevard.

[warreng88]

From the JR:

Two more TIFs: OKC Council votes to move forward on financing for Core to Shore, south downtown

By: Brian Brus The Journal Record January 27, 2015

OKLAHOMA CITY – The City Council took a big step Tuesday toward creating two new tax increment financing districts near downtown. They would provide funding for Core to Shore development and the southern part of the Central Business District.

Council members voted 8-1 on both issues Tuesday, with Councilman Ed Shadid in opposition. The resolutions authorized Mayor Mick Cornett to appoint review committees to look into the viability of tax increment financing, or TIF, districts to increase real estate ad valorem taxes in those areas so that City Hall can afford infrastructure improvements that will attract developers.

Cathy O’Connor, president and chief executive of the Alliance for Economic Development of Oklahoma City, said supplemental sales tax TIF districts will also be considered.

The TIF concept is based on the supposition that targeted areas will stagnate or grow much slower without a funding boost, a point that Councilman James Greiner expressed before casting his vote.

“I’m a skeptic on needing another TIF for this to develop,” he said. “So I really hope the committee is able to convince me that it’s needed, that this area will not develop without it … I would really like a ‘but-for’ test.”

The boundaries of the proposed TIF district for the Core to Shore area would generally follow the same lines set earlier by city leaders when Interstate 40 was relocated closer to the Oklahoma River. The area is bounded by the river on the south, Western and Shartel avenues on the west, Lincoln Boulevard on the east, and the new central boulevard on the north, where Interstate 40 used to be. The 77-acre central park now under construction as part of the MAPS 3 tax issue package of projects lies in the center of the area.

The second proposed TIF district is bounded by the new boulevard on the south, Western Avenue on the west, E.K. Gaylord on the east and Main Street on the north. The Myriad Botanical Gardens lie in the center; a new convention center, also part of the MAPS 3 program, is planned south of that park.

“This development anticipates a great deal of residential development in the area with the opportunity for a good amount of retail, especially adjacent to the park and supporting those residential uses,” O’Connor said of the southern business district TIF.

Downtown and the surrounding districts are expected to grow significantly in residential, office and business density in the next few years. O’Connor said Bricktown’s current average use density is expected to double by 2025, and Core to Shore space use will grow by almost seven times its current density. The latter is projected to build out to 1.5 million square feet of office space, 6,700 housing units, 157,000 square feet of retail and 152,000 square feet of adaptive reuse of existing buildings. O’Connor said the combined development value of Core to Shore alone is estimated at $930 million.

Shadid and Councilman Pete White expressed concern that establishing new TIF districts might disrupt tax revenue from other TIFs already flowing to schools.

“We’ve had very positive discussions with all of the taxing jurisdictions and especially with the school district,” O’Connor said. “They were very supportive when we met with them about a week ago.

“What we’ve talked about – and none of this has been finalized – is that we would establish a method of sharing the increment similarly to what we do in the downtown TIF district now,” she said.

[Pete]

This would be three new TIF districts (NE, South CBD and Core 2 Shore) in just this year, with more being planned.

I'll have a full break-down and analysis soon.

TIF"s are not free money. They redirect tax dollars (primarily from public schools) to mostly private developers.

There is also no proven causation between spending money in this way and economic development. In fact, some studies show that by robbing the schools you actually can do long-term harm to the future of a community.

[TexanOkie]

Robbing schools of what? Theoretically, TIF districts only redirect property taxes from the new value added due to projects that wouldn't have happened otherwise--if there's a legitimate financing gap (whether for development costs or public improvements necessary to sustain the project), these projects won't occur without the public investment. If the projects don't occur, the schools get nothing anyway, now or in 25 years when the TIF district expires. If the projects do happen, the school districts get a windfall in 25 years (or less, if whatever project costs to be paid with TIF funds are paid off early).

[Pete]

Robbing schools of what? Theoretically, TIF districts only redirect property taxes from the new value added due to projects that wouldn't have happened otherwise--if there's a legitimate financing gap (whether for development costs or public improvements necessary to sustain the project), these projects won't occur without the public investment. If the projects don't occur, the schools get nothing anyway, now or in 25 years when the TIF district expires. If the projects do happen, the school districts get a windfall in 25 years (or less, if whatever project costs to be paid with TIF funds are paid off early).

This just shows how little people understand about how TIF's work (understandable given the constant mis-statements by the Alliance and the press).

I'll break this down with real numbers later, but TIF's take ALL increases in taxes over a 25-year period. Property taxes increase as property values increase. Every single property increases in value over time, and substantially so over a 25 year period. Happens to your house and everything else. Simple appreciation drives that.

Example: Leadership Square (and several other downtown properties) have doubled in value in just the last 10 years, therefore the property tax they pay has doubled as well. All of that increase goes into TIF #2 instead of going to the general OK County coffers, which in turn distributes 72% of that tax to schools.

Also, there is no way to establish causation with the "but for" argument that projects wouldn't have happened anyway. I just posted in the Francis Apartments thread that the developer was denied a TIF request and they are still going forward with the project, just doing some value engineering.

[BoulderSooner]

I fully understand tif and I don't believe that it is "robbing" anything from schools.

[Just the facts]

OKC schools won't have a windfall in 25 years. They will operate with flat revenue for 25 years while their costs go up. In 25 years they will return to normal funding. As a right-wing tea partier it bewilders the bejeezus out of me that my fellow right-wingers are falling for this baseline budgeting gimmick given the fact that Rush has railed against it for 25 years. Are people so blinded that they can't see what is right in front of them?

[Pete]

Robbing is a strong term.

But the net effect of the TIF's in OKC -- present and planned -- is to redirect tax dollars from public schools (primarily) to private developers (primarily).

And there has been absolutely no causation established between spending tax dollars in this way and economic development.

[Just the facts]

And there has been absolutely no causation established between spending tax dollars in this way and economic development.

Exactly. Who is to say which projects would be completed as planned, which would be scaled back (and by how much), and which would never happen.

[Pete]

Exactly. Who is to say which projects would be completed as planned, which would be scaled back (and by how much), and which would never happen.

Or, that there wouldn't be at least an equal amount of benefit if those tax dollars were invested in the public schools, especially since Oklahoma is notorious for under-funding them in the first place.

I'm not against TIF's per se but we need to pump the brakes a bit before running off and establishing several more without looking at the fuller picture.

[Just the facts]

I'm not against TIF's per se but we need to pump the brakes a bit before running off and establishing several more without looking at the fuller picture.

I have three basic problems with the TIF and here is what I would have done different.

1) Time frame should only be 5 years out
2) Should only apply to lots where the development is located
3) Should freeze the current tax amount - not rebate, prebate, or credit the taxes.

[Pete]

BTW, a strong argument can be made that giving TIF funds to private developers is contrary to healthy economic development, because you are using public subsidies in a purely capitalistic market.

All these residential, hotel and office complexes compete against others in the open marketplace and most don't receive this sort of benefit.

So, it either creates an unfair competitive advantage, or causes everyone that comes afterward to ask for the same thing to "level the playing field".


When the idea of TIF districts was created decades ago, it was meant to jump-start severely blighted areas that had gone stagnant. And/or, to clean-up problematic sites, help assemble properties, etc.

Pretty much all these TIF's are nowhere near that original concept. The NE district is probably the only one exception.

[hoya]

It's absolutely taking money from schools. I don't have a problem with the concept of TIF funding, but we should be judicious with it and ensure that we are getting our money's worth. Environmental cleanup? Okay. Historical preservation? Okay. Extra expenses to ensure a higher use (like underground parking instead of a parking garage), okay. But people are handing out TIF dollars like candy. Most projects shouldn't get them.

Let's say you have an empty piece of land in a TIF district. The property taxes on it are $1,000. There are 3 development possibilities for this land. It will either:
a) remain the exact same,
b) get a development that is purely market driven, or
c) get a development with TIF assistance.

If a) is the case, over the course of 25 years we'll say the taxes go from $1,000 a year to $2,500 a year. (source: out of thin air)
If b) is the case, we'll say you get a 4 story apartment complex. The taxes go from $1,000 a year to $25,000 a year.
If c) is the case, you get a 10 story tower. The taxes go from $1,000 a year to $50,000 a year. But you also miss 25 years of tax collections.

Now, eventually option c) would arguably produce the most taxes. But your public schools are experiencing a 25 year delay on funding. Arguably you're much better off taking options a) or b) and having more education funding during that time frame.

Now, some properties will never develop at all if left alone. I don't think that's the case with the Core 2 Shore area. It probably is the case with the Cotton Mill. Redevelopment of that land is going to require eminent domain proceedings and a lot of public assistance with environmental cleanup.

[TexanOkie]

I understand TIFs better than you think. Those misstatements you mention from the Alliance are from the people actually implementing these districts, so I think they should be given some degree of credibility. None of us know the aggregated specific issues with any given development, except for what is released to the public, so I would understand a call for greater transparency and due diligence regarding actual financial needs of proposed recipients of TIF money. As to the gradual increases in assessed value a property would have (which is not a fact, but a general trend--much like the general trend is for higher post-TIF-expiration tax revenues and/or financial situations for school districts), that is not attributable to the new development: that discrepancy can be (and oftentimes is, in other Oklahoma municipalities) addressed by only having a portion of the new increment be apportioned to a TIF fund. However, even that can get dicey, since a lot of the increment not attributed to the new development is indirectly affected by other new development within the TIF district--your downtown OKC TIF example is a prime example of this. Finally, as to the counter-"but for" argument--you make a good point; however, increasing the level and/or sophistication of the analysis conducted for new TIF projects can help ensure money is allocated to projects with the highest return for the public investment.

[Pete]

Just to be clear, I've had about a dozen conversations and dozens more emails with Brent Bryant who administers the TIF's for the City.

I have all the detailed budgets and payout schedules and know specifically why most TIF's were requested and how the entire process works.

I've spent the better part of the last couple of months getting all the numbers together and making sure I understand all the various nuances. I've had a bunch of conversations with members of City Council on this subject.

I've also done quite a bit of research on how other cities have used TIF's and read several studies on them.


The bottom line is that in OKC (and most other cities), there is absolutely zero causation established between TIF awards and economic development. It is assumed the TIF dollars have helped but there is no way to know that for sure. Similarly, there has never been any causation between TIF's and increase in property values and taxes.

There are hundreds of factors as to why properties appreciate and at least in OKC, there is no data suggesting the TIF's have caused any increases whatsoever.


It's the classic "correlation does not imply causation" statistical argument.

There is also no way to know the economic impact if all that redirected tax money was invested in education (as 72% would normally be) instead of paying out to private developers.


As I said, much more to come on this.

We need to take a hard look at the pros and cons of TIF's before we redirect hundreds of millions of additional tax dollars.

We are well into MAPS territory with no public input or vote.

[soonerguru]

Just to clarify, with TIF funding, the increment associated with the property is frozen at pre-TIF levels, and the amount of increment going to the schools is the same as before the property improvement. So, while it's true that the additional increment does not go to the schools, the current (or prior) increment does continue to go to the county. So, I can see both sides of the argument, but it's not true that the TIF is "robbing" the schools.

I do agree TIF should be used extremely judiciously, and when used, the city should truly raise the bar on expectations for the TIF recipient.

[Pete]

Oklahoma City School Board Learns Of Tax Plan After Council Vote | Oklahoma Watch

Oklahoma City Public Schools board members say they learned about a city plan to extend the period for redirecting downtown tax revenue away from schools and other purposes only after the City Council voted to go ahead with evaluating the plan.

Report says that Cathy O'Connor only met with the district's COO who resigned before the Council vote.

[Plutonic Panda]

OKCPS Concerned Over Change In Funding - News9.com - Oklahoma City, OK - News, Weather, Video and Sports |

[ljbab728]

OKCPS Concerned Over Change In Funding - News9.com - Oklahoma City, OK - News, Weather, Video and Sports |

It sounds like from the tone of that article that ES is much more worried about this than the school board members are.

[krisb]

How about letting the increase in property taxes actually go to schools every once in awhile?

[krisb]

How about letting the increase in property taxes actually go to schools every once in awhile? They could sure use it. Education is the biggest economic development driver of all.