OG&E Energy Center

[hoya]

No one except JTF is saying "no TIF at all". But the amount of money they're requesting is way too high. These appear to be very nice towers and will add to downtown significantly. But they aren't something worth giving up all property taxes on. If all the market will support are two Continental Resources-level buildings, then so be it.

[bchris02]

No one except JTF is saying "no TIF at all". But the amount of money they're requesting is way too high. These appear to be very nice towers and will add to downtown significantly. But they aren't something worth giving up all property taxes on. If all the market will support are two Continental Resources-level buildings, then so be it.

Truth be told, I am sure OKC can support the proposed buildings. It's just OKC is an unproven and untested market and too many developers try to stay on the safe side and develop something far below what the market will really support. Best case scenario these towers will be built and will be successful and will forever change outside developer perception of what's possible in OKC.

[hoya]

Truth be told, I am sure OKC can support the proposed buildings. It's just OKC is an unproven and untested market and too many developers try to stay on the safe side and develop something far below what the market will really support. Best case scenario these towers will be built and will be successful and will forever change outside developer perception of what's possible in OKC.

I agree with that. I'm just saying that ClayCo is acting like there's this huge immense risk here, which neccessitates the TIF award. I'm saying if they think that, then they should build more conservatively, not ask for a huge handout.

[bchris02]

I agree with that. I'm just saying that ClayCo is acting like there's this huge immense risk here, which neccessitates the TIF award. I'm saying if they think that, then they should build more conservatively, not ask for a huge handout.

I would rather them just build the north parcel and forgo the south than to scale down both sides of the development. This needs to be done right.

[Paseofreak]

Are you kidding?!? Go to the top of the page and look at where this site lies. Immediately adjacent are MBG, The Devon Energy Center, the Preftakes block(which he's already into for $23MM and will certainly develop nicely), an elementary school, the planned Convention Center and very likely convention hotel. It is arguably the best chunk of land in the state for development of the type proposed.

It is an island surrounded by high quality development and amenities resulting from private investment by others and massive amounts of public investment. It's an immensely valuable piece of dirt and you think we should cut someone a $140MM discount to acquire and make a profit from? If we're forfeiting taxes at this point it should not be on a prize chunk of land in the center of a furnace of development, it should be for a pioneer willing to take the first steps in C2S or along E. 23rd Street. This site will develop nicely by itself or with very modest assistance from local government.

[Motley]

Good point, and I would like to see what could be done with modest government assistance to understand if that is ambitious enough. However, I feel this site is worth making absolutely grand. Same for the Cox site. It has to be bold and commanding as the strip from the school to the transit building will be the centerpiece of the city. I would go for dramatic and world class and it will be worth every penny spent. It should set the standard all other developments in the city strive to match. If you don't start thinking big, it will never come on its own; it's too easy to play safe and stay in the middle.

[gopokes88]

There is a difference between starting high in the negotiation process or giving a number so high that is becomes offensive.

Standard is what 10% from what I've read? Clayco came in at 35%ish. They probably actually want in the 20% range. They'll argue such a big project requires big risk for both parties and this isn't a standard project that's why it gets to break the records. That would be my guess based on the many negotiations I've had to go through.

There's half a billion dollar development on the line here with a project that will dramatically change the skyline. Clayco knows they've got some leverage.

[Just the facts]

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.

It might be new revenue but it comes with new expenses as well. Those expenses have to be paid for by local government. Why should they get to keep all the revenue and not contribute to any of the expenses? Plus, why is there this assumption that this project doesn't happen without the TIF funds? Is Clayco pulling a Cabalas and threatening to build these in Edmond?

[Pete]

Also saying this is "new revenue" ignores the fact someone will develop these properties, even if Clayco doesn't.

[BoulderSooner]

It might be new revenue but it comes with new expenses as well. Those expenses have to be paid for by local government. Why should they get to keep all the revenue and not contribute to any of the expenses? Plus, why is there this assumption that this project doesn't happen without the TIF funds? Is Clayco pulling a Cabalas and threatening to build these in Edmond?

What new expenses. Would you rather they build on memorial?

[Pete]

It seems a fair compromise here would be 10% of the development amount, or $55 million or so.

That's still a ton of money, but at least that way $90 million will still go into the coffers and the development would hopefully still get done.

Or, just give them TIF on the south half and not the north, which would cut it down to $70 million or so.

[Just the facts]

What new expenses. Would you rather they build on memorial?

How about the roads these people will drive on, the extra maintenance park use brings, police and fire protection, etc... You really think local government doesn't have expenses related to new developments?

To address hoyasooner's comment, I'm not saying no TIF dollars, but those dollars should only be used on public assets related to the project or other public improvements within the boundary of the TIF district. Let's not forget that P180 got underfunded because Devon Tower came in lower than expected - well here are the dollars to properly fund P180 and complete the streets that got cut back, or cut out completely.

[bchris02]

I think OKC needs to attempt to negotiate Clayco down, but if it comes to having to either grant the TIF or them packing up and leaving, I think OKC will need to bite the bullet and grant it. The Stage Center block is too important and it needs to be done right. If this deal falls apart, something else will get built but its very unlikely it will be anything close to as ambitious or as nice as what is proposed here. Furthermore, it will likely be years down the line before all the pieces can fall into place to make something else happen. If this deal falls apart, it will be a monumental setback for OKC and the development of the western portion of downtown.

Just something to think about.

[Just the facts]

I think OKC needs to attempt to negotiate Clayco down, but if it comes to having to either grant the TIF or them packing up and leaving, I think OKC will need to bite the bullet and grant it. The Stage Center block is too important and it needs to be done right. If this deal falls apart, something else will get built but its very unlikely it will be anything close to as ambitious or as nice as what is proposed here. Furthermore, it will likely be years down the line before all the pieces can fall into place to make something else happen. If this deal falls apart, it will be a monumental setback for OKC and the development of the western portion of downtown.

Just something to think about.

I think the exact opposite. Granted the next developer might not propose towers but there are plenty of developers out there that would love to have this land - especially now that Stage Center is gone. That building alone probably scared off most local developers just because they didn't want to have to deal with that issue.

If the City grants this do you think OKC should also grant the Preftakes building a 94% rebate (kickback) on their property taxes as well?

[Just the facts]

Okc doesn't get a dime from property taxes

I guess this brings up 2 questions.

1) Where is OKC going to get the money to repay the loan from Devon that was borrowed against Devon future property tax?
2) Where did OKC get the authority to exempt developers from Oklahoma County property taxes?

[Paseofreak]

And to the developers of every other parcel OCURA controls along the C2S park? Either OKC is a great place to develop or it's not. Civic investment needs to make OKC a great place to develop, not actually do the development.

[Pete]

^

Right, you could argue the Core to Shore area needs much more economic stimulus than primo property in the heart of the CBD.

There is still tons of property to develop in the urban core, and every bit of it is less desirable than these parcels.

So, if we award a ton of TIF dollars for this project, on what basis can we possibly reject similar requests for far more difficult/out-lying properties, and/or those with all types of contamination or utility problems? If anything, those developers should get more.

[catch22]

^

Right, you could argue the Core to Shore area needs much more economic stimulus than primo property in the heart of the CBD.

There is still tons of property to develop in the urban core, and every bit of it is less desirable than these parcels.

So, if we award a ton of TIF dollars for this project, on what basis can we possibly reject similar requests for far more difficult/out-lying properties, and/or those with all types of contamination or utility problems? If anything, those developers should get more.

I agree -- using the funds for turning bad situations into positive ones are great uses of the money. There's neither environmental nor infrastructure issues with either of these blocks. One of the blocks is even a pretty useful lot, with several businesses and a somewhat popular restaurant.

I don't disagree with giving them money -- they are taking a pretty big financial risk...however, what they are asking for is completely outrageous.

[soondoc]

Good point, and I would like to see what could be done with modest government assistance to understand if that is ambitious enough. However, I feel this site is worth making absolutely grand. Same for the Cox site. It has to be bold and commanding as the strip from the school to the transit building will be the centerpiece of the city. I would go for dramatic and world class and it will be worth every penny spent. It should set the standard all other developments in the city strive to match. If you don't start thinking big, it will never come on its own; it's too easy to play safe and stay in the middle.

I agree with you Motely! This needs to be grand for sure.

[Paseofreak]

I don't disagree with giving them money -- they are taking a pretty big financial risk...however, what they are asking for is completely outrageous.

Those lots are completely and entirely developable into a profitable, high quality, location appropriate development without a cent of tax relief. If Clayco (or any other developer) wants to go above and beyond to enhance their profits through more leasable units or higher quality and higher revenue generating facilities with the added assurance that their expenses will be lower for 25 years, it seems to me that they are asking the city to make an investment with a 100% loss downside (i.e., the demand is not there and the project fails completely) and a fixed upside in terms of revenue from that site. That just doesn't seem fair to me because a) the city will have very little control over the management of the facility once it's built; and b) the city is as much at risk as the developer (prorated by the percent of total cost), but has no opportunity to enjoy the windfall if the project is an enormous success and generates far more profits than anticipated. Shouldn't the amount of tax relief be related to the success of the development we've invested in?

Also, bear in mind, the city has already invested untold millions in creating the cozy, attractive, business friendly environment that this spectacular little parcel is surrounded by. We absolutely must not sell short the attractiveness of this site and all the work that's been done to make it so attractive before Clayco ever responded to the RFP with their hand out.

[soondoc]

Looks like the jury is out and the consensus is guilty verdict for Clayco. Not sure if what he is doing is exactly fair but I know it would sure be good for the city in terms of jobs, appeal, future growth and expansion of companies, exposure to tv's across the nation, etc. Also, not sure how any of this is going to come out of anyone on here's pocket book. Lets just quit griping about it and fold and stare at an empty lot for a few years, it might be more fun than listening to all this negativity on here on why this shouldn't be done. OKC may just have to do this now but that doesn't mean they will have to in the future. The city is coming on the national scene but HAS NOT arrived yet. Keep the projects coming and the demand will be there in the future for us to be a little more selective. Have any of you in the business world ever heard of the term "fake it until you make it"? Sometimes you just gotta play the game until you no longer have to. Some people see the big picture (long term benefits) some just want to see the glass half empty despite it not effecting your pocket book one bit if this was done as proposed.

[Plutonic Panda]

I think the exact opposite. Granted the next developer might not propose towers but there are plenty of developers out there that would love to have this land - especially now that Stage Center is gone. That building alone probably scared off most local developers just because they didn't want to have to deal with that issue.

If the City grants this do you think OKC should also grant the Preftakes building a 94% rebate (kickback) on their property taxes as well?

Any other development on this site should be required 25 stories minimum.

[Spartan]

^

Right, you could argue the Core to Shore area needs much more economic stimulus than primo property in the heart of the CBD.

There is still tons of property to develop in the urban core, and every bit of it is less desirable than these parcels.

So, if we award a ton of TIF dollars for this project, on what basis can we possibly reject similar requests for far more difficult/out-lying properties, and/or those with all types of contamination or utility problems? If anything, those developers should get more.

While I am in favor of the TIF for a development that elevates what is possible in OKC, at this level of public subsidy we need assurances that they will deliver. After all, a year ago we were forced to resign ourselves to the demolition of Stage Center because A, we couldn't afford a development subsidy; and B, the Stage Center site is the most viable development site we have.

Funny how a year later we are asked for an unprecedented subsidy, five times over what it would have cost if the public bore the entire cost for saving Stage Center. But instead we didn't even have that conversation.

[Rover]

Was SC going to create more tax revenue or just needing to take money without creating any?

[NWOKCGuy]

This thread is the epitome of OKCTalk group think.