Boardwalk at Bricktown / Dream Hotel

[Plutonic Panda]

JR Article: https://journalrecord.com/2023/08/01...anda@gmail.com

[onthestrip]

A $200MM TIF package. Jeez.. I can't remember reading about a development in OKC happening without our schools paying for a big chunk of the development. We want to whine about insufficient money for education, but we want to pass out free ad valorem money to developers.. we probably can't have it both ways.

Add in the sales tax rebates and Leverage Act (what is that?) funds and these guys are almost getting 40% of their apartment project paid for. Omni has to not love this, Im sure the numbers are being gamed to show they're for the apartment towers but in reality are probably helping pay for the hotel tower. The TIFs continue to not just get larger as a whole but larger as a % of the total project. As soon as the 25 year TIF expires, you will see the taxable value of this property lowered significantly after the owners protest the valuation when they have to start making ad valorem payments.

[Shortsyeararound]

There are a lot more wealthy people in OKC than you realize. Just saying. See all the engineering jobs near or at Tinker. They all pay very well. And a lot live downtown.

You just assumed that I don’t think there are more wealthy people here than I realize - I never said that and you would be wrong. What I said is that if the FNC is 2/3 rented then there might be a little concern with 900 more units around the same cost. If the golden rule of renting is to not spend more than 30% of your bring home salary (13k is needed monthly) which equates to a total bring home of $156k a year after taxes, etc to rent a whole apt. I know there are high paying jobs but at that point in salary, wouldn’t the better option be to buy their own place vs renting. The benefit to Okc for someone of that salary vs another city is that pretty much every option is open to them. I like downtown but don’t think I would enjoy paying 4k for sharing walls with someone not being my wife or child and the fact that there is not a true grocery store option (besides Homeland) makes this option limited for me. You can live in a 2 bed apt in Malibu with ocean views for 4500-5k, just saying.

[Pete]

^

Yes, the hotel can't be included in the proposal but if they get the $200 million you can bet some of that will go toward the hotel.

[Midtowner]

Add in the sales tax rebates and Leverage Act (what is that?) funds and these guys are almost getting 40% of their apartment project paid for. Omni has to not love this, Im sure the numbers are being gamed to show they're for the apartment towers but in reality are probably helping pay for the hotel tower. The TIFs continue to not just get larger as a whole but larger as a % of the total project. As soon as the 25 year TIF expires, you will see the taxable value of this property lowered significantly after the owners protest the valuation when they have to start making ad valorem payments.

And that would probably be correct re property values. Especially in an historic building like that. I imagine many of the systems installed aren't going to have much more than a 20-year operational life they aren't likely to invest heavily in it towards the end fo that time, and a commercial property loses a lot of its tax advantages after 20 years, so a 25-year time frame is particularly problematic for a TIF. But what's problematic for the taxpayer is usually profit for the developer.. and O'Connor (or whomever) isn't on the taxpayer's payroll.

[Laramie]

^

Yes, the hotel can't be included in the proposal but if they get the $200 million you can bet some of that will go toward the hotel.

Pete, you are 100% correct. How in the world can they monitor itemize costs of $200 million spread over a $736 million development.

[Mesta Parker]

“The development will include 132 units of workforce housing and a 2,000-square-foot workforce development center in partnership with the nonprofit Aspiring Anew Generation. Carras said workforce training will be available to the entire community.

In other locations with the program, residents generally exit the housing after two years to make way for others to come in, Carras said. The rent will be about $1,800 per month for a two-bedroom apartment, based on U.S. Housing and Urban Development figures.“

Where does Aspiring Anew Generation get its funding?

Even though the workforce house is substantially less expensive than the apartments at market, the rent at $1800 is still well above the average apartment rent in OKC. Does “Aspiring” pay the rent or the participant? If “Aspiring”, wouldn’t they be able to provide services to more people in a lower rent location? If the workforce participant must pay, how will they afford it?

Just trying to understand.

[BoulderSooner]

How in the world can they monitor itemize costs of $200 million spread over a $736 million development.

universitys gov org's business' all do this every day ..

[Teo9969]

Add in the sales tax rebates and Leverage Act (what is that?) funds and these guys are almost getting 40% of their apartment project paid for. Omni has to not love this, Im sure the numbers are being gamed to show they're for the apartment towers but in reality are probably helping pay for the hotel tower. The TIFs continue to not just get larger as a whole but larger as a % of the total project. As soon as the 25 year TIF expires, you will see the taxable value of this property lowered significantly after the owners protest the valuation when they have to start making ad valorem payments.

I haven't seen that OK County does a lot of overvaluing. I'm no fan of the 25 year TIF, but assuming this gets built as advertised, the market valuation of this after 25 years will likely be no less than $700M in 2023 dollars (so over $1B in 2045 dollars) and they won't succeed getting that lowered that will be nice for the county when that comes online.

[Mr. Blue Sky]

Let’s hope there isn’t wide and systemic fraud. Expectations that there will be misuse of government funds, as per the $200 mil, says a lot. It must happen frequently or smart people wouldn’t just casually expect this to happen.

[Rover]

Pete, you are 100% correct. How in the world can they monitor itemize costs of $200 million spread over a $736 million development.

Companies do it all the time.

[HOT ROD]

I honestly can't believe all of the complaining going on here with regard to this development. We say we want OKC to be in the big leagues of cities yet complain CONSTANTLY when big development is announced - too much TIF, not enough folks to fill it, Omni will be unhappy. WHO GIVES A F! excuse my english.

Guys, in case some of you haven't realized, OKC is in a new building boom and chapter in its life. We've passed 700,000 residents and are very likely to remain a major league city for the next 30+ years (5 year lease already extended, 25+ year lease to be approved). This attracts development that we all have been screaming for, here it is in real like. Like it or not, development like this needs help. Yes, the buildings may not fill immediately and that's why it's being phased and why they need TIF. It's not a hand-out, they wont get a dime of the 90% ad valorem until it's built and open for business.

Crying over the amount is childish in my opinion. These developers are building a massive project in a very unproven Oklahoma City upscale housing market. They believe the market is there, as do I when you consider the cachet that OKC has achieved. First National is 2/3 full, perhaps there are folks that want to live downtown in a new tower not an old one. Perhaps there are folks that want to be downtown but not in the CBD. Earlier in threads people are screaming about OKC not having any high-rise residential yet HERE IT IS and now there's doubt?

I appreciate constructive criticism but I disdain the constant cynicism of developer aspirations. There's confidence to build Oak and OKANA, why would there NOT be confidence to build this - especially given the new arena coming online which IM SURE the developers where aware of when they put this together last year (just probably didn't know the size/price tag). Now that it's known to be $1B, having this project seems to be a natural expectation - again, cachet of a major league city on the rise.

Again, let's constructively criticize TIF where necessary but they haven't even approved anything yet and as I see it, they are safeguarding the city this time UNLIKE what they did with Omni - which they gave the key (including massive $85m TIFF) to the city for 15 years to build a 17 floor hotel that most of us would agree is underbuilt. This development will have more than 900 units, over 130 units under-market and a workforce center. $1600 is the US HUD approved amount for a 2 br downtown unit, it's downtown guys, not in the suburbs where $1400 gets you a 4 Br house. If anything, FNC is proving the market for $3900 otherwise they'd have to lower it, right? 2/3 full after a year is somewhat to be expected, especially for an unproven upscale market in a historic (old) building in the CBD. These guys have done the performas and comps and I bet some of my argument has played into their analysis that OKC is a good bet. They're the FIRST to build a highrise tower, let alone a new highrise district actually. I for one, am delighted with their proposal and to me THIS is what TIF should be used for. I only wish we had done similar with Omni and had them build residential above or next to the 17 floor tower they did build, with the TIF we gave them. To me, it is Omni that is holding OKC back for 10 more years, but the city did that and to me it was a mistake.

[soonerguru]

This will pass and I support it.

[Mr. Blue Sky]

Rod, I support the project, but it’s perfectly fine for people to voice their opinions on TIF, the amounts, and anything else in opposition. Most members are taxpayers who live here and we’re talking a ton of money, I get that. Respectfully, your post came across as a lecture to those who have an opinion different from yours, and that lecture coming from someone who doesn’t even live here probably doesn’t sit well with more than a few members who do live in Oklahoma City, pay taxes here, etc.

[HOT ROD]

appreciate your position and respect it. however, i was not intending to do a lecture but more of a 'welcome to the league of big cities' with examples I've seen on this forum. I mentioned constructive criticism in my 'lecture' as what could be appreciated but often I just see people upset or whining about the amounts expecting developers to foot the entire bill for projects in an otherwise unproven market or on-and-on about what they can or can't afford or a suburban house get this so therefore there isn't a potential market in this downtown city.

This is the first, large scale, residential downtown highrise district in OKC's history. DISTRICT = more than 1 residential tower, most cities only have one at a time. I'd expect a residential district to warrant assistance, and the city was smart in crafting it as a rebate rather than upfront (which it was upfront with Omni, with no strings and no requirements and restricts the city from other highrise hotels).

TIFs are common in other growing cities, even those that are proven markets for projects. Agree with me or not, but let's be constructive. Again, OKC welcome to the big leagues.

[BimmerSooner]

What’s the typical ft/floor for residential of this type? 13.5?

[jdross1982]

I understand the argument against using TIF or the amount but OKC has constantly used public funds to inject life into downtown/bricktown. Due to the size and amount of undeveloped land downtown/bricktown this will continue to happen for another 10-15 years until more of downtown/bricktown area has filled out with more infill like this project. Surface parking lots need to be developed into parking garages or 10-15 story buildings. More retail, more restaurants and increased delivery of groceries in the area as I don't see a grocery going in downtown.

[Pete]

What’s the typical ft/floor for residential of this type? 13.5?

Probably more like 12.5.

That is the average floor height at the Omni and hotels and residential tend to be similar, with office buildings employing taller floor heights to allow for large, open floor plans.

[onthestrip]

I haven't seen that OK County does a lot of overvaluing. I'm no fan of the 25 year TIF, but assuming this gets built as advertised, the market valuation of this after 25 years will likely be no less than $700M in 2023 dollars (so over $1B in 2045 dollars) and they won't succeed getting that lowered that will be nice for the county when that comes online.

Its not overvaluing when the developer can show they spent $550 million on it, then collect the big fat TIF rebates. The higher the value the quicker they get their full TIF allotment back. Then when they are on the hook for the payments themselves, I will guarantee you they get their taxable value reduced. When a million or two are is the line, they will hire lawyers and anyone else to fight for a lower property tax, and will get it. Even Devon tower had its taxable value reduced by $90 million 3 years ago.

[BoulderSooner]

I will guarantee you they get their taxable value reduced. When a million or two are is the line, they will hire lawyers and anyone else to fight for a lower property tax, and will get it. Even Devon tower had its taxable value reduced by $90 million 3 years ago.

devon had the taxable value reduced while in is fully in a TIF period?

[onthestrip]

devon had the taxable value reduced while in is fully in a TIF period?

Yes I was curious about that. Or maybe their TIF includes an area and not just their property? But wanted to show how big valuable properties can easily get their values reduced down the road.

This played out with windmills. The state gave large property tax rebates, essentially a tif, to wind farm developers. When those ran out or expired, the wind mill owners came back to county assessors arguing their windmills were worth way less, and ended up getting their taxable values reduced along with their ad valorem bills being reduced.

[Pete]

The Devon TIF does not expire until 2033. Until that time, all property tax on the Devon Energy Center (the only property that is included) will be funneled to the TIF. That money can only be spent downtown; most of it has gone toward Project 180 at Devon's insistence.

Like all OKC TIF districts, the Devon version is 25 years, the absolute maximum allowed by the Oklahoma constitution. It started in 2008.

[BoulderSooner]

Yes I was curious about that. Or maybe their TIF includes an area and not just their property? But wanted to show how big valuable properties can easily get their values reduced down the road.

This played out with windmills. The state gave large property tax rebates, essentially a tif, to wind farm developers. When those ran out or expired, the wind mill owners came back to county assessors arguing their windmills were worth way less, and ended up getting their taxable values reduced along with their ad valorem bills being reduced.

do you have a link to this?

[Shortsyeararound]

I honestly can't believe all of the complaining going on here with regard to this development. We say we want OKC to be in the big leagues of cities yet complain CONSTANTLY when big development is announced - too much TIF, not enough folks to fill it, Omni will be unhappy. WHO GIVES A F! excuse my english.

Guys, in case some of you haven't realized, OKC is in a new building boom and chapter in its life. We've passed 700,000 residents and are very likely to remain a major league city for the next 30+ years (5 year lease already extended, 25+ year lease to be approved). This attracts development that we all have been screaming for, here it is in real like. Like it or not, development like this needs help. Yes, the buildings may not fill immediately and that's why it's being phased and why they need TIF. It's not a hand-out, they wont get a dime of the 90% ad valorem until it's built and open for business.

Crying over the amount is childish in my opinion. These developers are building a massive project in a very unproven Oklahoma City upscale housing market. They believe the market is there, as do I when you consider the cachet that OKC has achieved. First National is 2/3 full, perhaps there are folks that want to live downtown in a new tower not an old one. Perhaps there are folks that want to be downtown but not in the CBD. Earlier in threads people are screaming about OKC not having any high-rise residential yet HERE IT IS and now there's doubt?

I appreciate constructive criticism but I disdain the constant cynicism of developer aspirations. There's confidence to build Oak and OKANA, why would there NOT be confidence to build this - especially given the new arena coming online which IM SURE the developers where aware of when they put this together last year (just probably didn't know the size/price tag). Now that it's known to be $1B, having this project seems to be a natural expectation - again, cachet of a major league city on the rise.

Again, let's constructively criticize TIF where necessary but they haven't even approved anything yet and as I see it, they are safeguarding the city this time UNLIKE what they did with Omni - which they gave the key (including massive $85m TIFF) to the city for 15 years to build a 17 floor hotel that most of us would agree is underbuilt. This development will have more than 900 units, over 130 units under-market and a workforce center. $1600 is the US HUD approved amount for a 2 br downtown unit, it's downtown guys, not in the suburbs where $1400 gets you a 4 Br house. If anything, FNC is proving the market for $3900 otherwise they'd have to lower it, right? 2/3 full after a year is somewhat to be expected, especially for an unproven upscale market in a historic (old) building in the CBD. These guys have done the performas and comps and I bet some of my argument has played into their analysis that OKC is a good bet. They're the FIRST to build a highrise tower, let alone a new highrise district actually. I for one, am delighted with their proposal and to me THIS is what TIF should be used for. I only wish we had done similar with Omni and had them build residential above or next to the 17 floor tower they did build, with the TIF we gave them. To me, it is Omni that is holding OKC back for 10 more years, but the city did that and to me it was a mistake.

Thanks Dad for the lecture.
I support the idea. If it succeeds great, if it doesn’t then the prices come down. I was stating an opinion on the price. The FNC from what I can find has 193 residences and only 2/3 full and then we are going to add 900 more around the same cost. I hope it fills up, I really do. All I was showing was the math and how if this could be problematic at that price. My wife and I could afford it but at our age would not choose to live in an apt even with kids leaving the nest. I would prefer to be in a tent on the beach. So to reiterate- I want this to work. I’m a skeptic by nature and having been born and raised in Okc I love the development going on. I love it.

[onthestrip]

do you have a link to this?

Heres one that popped up after a search.

https://www.kxii.com/2022/01/20/wind...ublic-schools/