OG&E Energy Center

[Pete]

I'm with you Pete. I'm a fan of transparency. But you know how some of this stuff is. It's all confidential during negotiations for obvious reasons. I'm holding out to see what the TIF proposals look like.

The biggest issues I have with the process is that the information is almost never presented in a way that is easy to understand (as this thread demonstrates), the few people involved have their own biases (as all humans do) and then when it does come time to make the info public, there is usually a very short timeframe -- often only a few days -- between that and when a final vote is cast by the council.

And keep in mind, the Alliance is still relatively new and one of the huge concerns was that it is not subject to open meeting and open records laws. It was purposely formed the way it was (as a non-government nonprofit) to get around these requirements.

So, I think it's necessary to be especially diligent because we are venturing into uncharted waters in many ways and I'm a bit suspicious of anyone who tries to cast this situation as in any way 'typical' because it absolutely is not.

And having followed the Project 180 stuff closer than probably anyone, I have good, documented reasons to be less than completely trusting of how some of this stuff gets done.

[Pete]

They did choose the Clacyo proposal, though, with this specific TIF request.

So, there is at least a chance something near that amount will be granted. And since we won't know the final amount until a few days before it actually goes to a council vote (which is the usual way) you can't assume anything.

I can already see evidence of trying to portray their request as somewhat typical and "within range".

[Spartan]

Don't forget though that Milhaus actually had a higher TIF ask...

[hoya]

Don't forget though that Milhaus actually had a higher TIF ask...

Doesn't mean either should be approved as is.

[city]

[Pete]

Milhaus asked for $21 million on a $80 million investment.

That's 26% and pretty much what Clacyo is asking for BOTH parcels and a total of $143 million.

[Spartan]

I just mean that as a matter of fact, not to argue that Clayco should push the envelope on subsidy when they've been awarded our best development site. I agree that there should and will be negotiation, with OKC having the upper hand given the site and that we don't need excessive "public realm improvements" to succeed here.

I just can't help but think it funny that we balked at $15-20M for Stage Center (who knows what that negotiation would have yielded), and now here we are, and oh wait Milhaus is still a go for a residential high-rise, and this is what kind of public assistance they have in mind. There exists the potential to lose control of this potentially great economic development tool..

This is what we get by not connecting the demo and building permit processes. This is insane and if we don't fix this tomorrow, this could happen a lot more times in the next two years (every time a big project pops up). The divide and conquer of priorities is how developers get us to keep subsidizing mediocre projects.

[soonerguru]

For the record, if the City declines to provide TIF assistance to this project it won't mean a single additional penny would somehow makes its way magically to the schools instead.

You did read my post, right? I didn't say "all or nothing."

[hoya]

They shouldn't need any TIF funds for the OG&E tower. They have a tenant. I'm fine with the city giving them a lot of low interest loans. That would be fine. And I understand there needs to be some amount of public funding here. Let's say 50 or 60 million. But 147 is crazy.

[Spartan]

Milhaus asked for $21 million on a $80 million investment.

That's 26% and pretty much what Clacyo is asking for BOTH parcels and a total of $143 million.

Higher %

$80M is not out of place for a development right now - most of the whole-block developments we have are in that range (Edge, Steelyard, FNC, Metropolitan, LIFT, GE, 21c, MidtownR). They typically get $5-10M in TIF help, usually loans is my understanding.

[Pete]

My gut feeling is that the grant will be somewhere north of $100 million.

Closer to the Clayco ask ($143 million) vs. the more typical 10% ($53 million).

[Spartan]

My gut feeling is that the grant will be somewhere north of $100 million.

Closer to the Clayco ask ($143 million) vs. the more typical 10% ($53 million).

Right, that's fine as long as we keep talking in ranges. As soon as we publicly identify a specific amount other than $143 million, that's a counter. Right now the counter offer needs to be 10%, and then as you go up from there, the city gains more assurances over design and completion timeline. Most developers will do that trade every time, because they want financing and to finish the job.

[soonerguru]

If we're going to subsidize them to the tune of 26%, let's demand they make them for-sale units. Also, let's subsidize quality downtown retail and a grocery store. If we're going to make it happen, let's make it happen.

[Spartan]

Exactly. I'm fine with us crossing a line into major subsidy, but if we go there we had better get something good for it.

[Rover]

If we're going to subsidize them to the tune of 26%, let's demand they make them for-sale units. Also, let's subsidize quality downtown retail and a grocery store. If we're going to make it happen, let's make it happen.

Problem with "for sale" properties in OKC is how hard it is to get loans for condos here.

[Motley]

what is the issue with condos in OKC? I was surprised they weren't condos when this was announced.

[Plutonic Panda]

Problem with "for sale" properties in OKC is how hard it is to get loans for condos here.

Why is that?

[Rover]

The condo market is very thin and hasn't historically done well. Banks are very slow to change their views. I had this discussion with a deep deuce developer just a few weeks ago regarding building flats vs. townhomes.

[ChrisHayes]

I would say negotiate them to a lower amount and go forward. We need to remember it's a period of tax relief. We're not writing a check. No buildings, no money. Or we can have a vacant lot. Someone noted what this development could do for the area. And that's something to look at. It could really drive up property values and pull more people into downtown.

[Spartan]

I would say negotiate them to a lower amount and go forward. We need to remember it's a period of tax relief. We're not writing a check. No buildings, no money. Or we can have a vacant lot. Someone noted what this development could do for the area. And that's something to look at. It could really drive up property values and pull more people into downtown.

"Or we can have a vacant lot."

If only we'd been told that a year ago.

[HOT ROD]

They shouldn't need any TIF funds for the OG&E tower. They have a tenant. I'm fine with the city giving them a lot of low interest loans. That would be fine. And I understand there needs to be some amount of public funding here. Let's say 50 or 60 million. But 147 is crazy.

^ I tend to agree with this. The OGE Tower is NOT speculative since there is a ready tenant, so there hsouldn't be a need for TIF for that building unless the funds would be tied to overall public investment (utilities overall, sewer/water, underground parking covering the entire site, retail podium, etc). I would agree that a significant TIF might be necessary for the second Office Tower which is totally speculative at the moment, along with both Residentials; but I'd only approve the TIF as long as the towers are BUILT to the approved designs (or better). Scale back and Pay back!

Wouldn't removing OGE bring us closer to the magical 10% 'rubber stamp' mark?

[Motley]

Are we even sure that this plan does not include a substantial public component? Looking closely at the design, I see CA St, becoming a meandering pathway with a glass sky bridge over it. There appears to be a large plaza directly across from the park. Maybe those coupled with parking, and ongoing maintenance of these things amount to a good bit of the TIF. I know the pedestrian bridge from the Hilton to Petco park in downtown S.D. costs $30million dollars alone and was funded by the city/state. Hilton refused to pay for it and said the $350 million for the hotel was their part and the city could fund the bridge.

[HOT ROD]

Yes, that's my point - I'd be more comfortable with TIF if it was for additional public improvements to the site vs. discounting construction costs of the towers. ...

I'd be in favor of grant type of TIF for the Office Tower but low interest loans for the Residentials. Surely it all will be a success, so it isn't fair for OKC to subsidize the residential without some sort of equitable return. Clayco will make $$ on the residential that WILL sell, so there shouldn't be as much TIF and what's granted should be paid back. Office? well, I could stomach a grant just because of the influx of jobs such a speculative tower will bring. This would be a true 'seed' that when sprouted will have significant benefit far beyond the TIF to all involved.

This is why I would not support TIF for OGE Tower because this is an upgrade for them and they are already downtown and already a tenant, so it should be more of a Devon situation with regard to OGE Tower IMO vs. the other towers htat are new and truly spec.

[Spartan]

^ I tend to agree with this. The OGE Tower is NOT speculative since there is a ready tenant, so there hsouldn't be a need for TIF for that building unless the funds would be tied to overall public investment (utilities overall, sewer/water, underground parking covering the entire site, retail podium, etc). I would agree that a significant TIF might be necessary for the second Office Tower which is totally speculative at the moment, along with both Residentials; but I'd only approve the TIF as long as the towers are BUILT to the approved designs (or better). Scale back and Pay back!

Wouldn't removing OGE bring us closer to the magical 10% 'rubber stamp' mark?

OCURA doesn't do clawback. Look at Deep Deuce and Lower Bricktown.

[Motley]

I could imagine parking with an underground link to the new cc since the cc is partly underground. I am sure they are aligning utilities to work with it as well. Some of the TIF may be used to offset the cost of dramatic lighting and architecture that would be scaled back but will provide an overall improvement in the look of downtown. I am sure Clayco has a list of improvements that justify the TIF and then another justification for risk in a test case for the city. I mean if banks are hesitant to loan money for condos, it tells you the thought of residential towers in OKC is risky beyond most investor/lenders.