Proposed nonprofit to spearhead economic development in OKC

[Doug Loudenback]

I've not seen a thread here yet so I'll start one. First, read Steve Lackmeyer's April 8 article on this matter which will be put to city council on Tuesday, April 12.

I've just started to think about the matter and, aside from the quickness, if not haste, that this proposal has come to the fore and will come up for vote (which I'm not fond of) I have no particular conclusions or opinions yet. But, considerable thought behind the scenes has obviously been given to the proposal ... not only would a new organization be created, it would come complete with named leaders and members (which strikes me as putting the cart before the horse).

Excerpts from Steve's article:

New nonprofit is established to spearhead economic development in OKC

A new nonprofit organization to be led by current Assistant City Manager Cathy O'Connor is asking for $424,000 in public funding to start a “one-stop shop” for economic development.

The proposal to fund and create “The Alliance for Economic Development of Oklahoma City” will be submitted to the Oklahoma City Council on Tuesday.

The funding includes $56,000 for the last two months of the current fiscal year ending June 30, and another $368,000 for the 2012 fiscal year.

Sources will include tax increment funding overseen by the Oklahoma City Economic Development Trust, the MAPS 3 use tax and the city's general fund. More appropriations would be sought annually under the proposed five-year contract.

Need for ‘fast track'

The proposal calls for additional, unspecified amounts to be provided by the Oklahoma City Urban Renewal Authority, which is largely supported with federal funds and land sale proceeds. Devon Energy Corp. Executive Chairman Larry Nichols, who will chair the new organization, said it is needed to “fast track” development projects.
* * *
Nichols and O'Connor couldn't detail specific projects to be handled by The Alliance other than a convention hotel the Greater Oklahoma City Chamber hopes to attract to downtown in conjunction with construction of a new convention center.

O'Connor said proceedings of the existing public trusts will still be subject to the Oklahoma Open Meetings and Open Records laws. She was unsure whether the expenditures of The Alliance, which will operate with public funding, will be subject to open records laws.

A sidebar to the article identifies others who would be on the committee as well as other matters:

Larry Nichols to be chair

Larry Nichols, executive chairman of Devon Energy, will serve as chairman of The Alliance for Economic Development of Oklahoma City with a board consisting of Roy Williams, president of the Greater Oklahoma City Chamber; businessman Clayton I. Bennett; former Mayor Ron Norick; city council members Pat Ryan and Meg Salyer; City Manager Jim Couch; and representatives of the Oklahoma City Economic Development Trust, the Oklahoma City Urban Renewal Authority, the Oklahoma City Industrial and Cultural Facilities Trust and the Oklahoma Industries Authority.

Duties

Duties of “The Alliance” will include coordination, management, planning and implementation of the following tasks:

• The city's economic development incentives.
• The city's retail incentives.
• Redevelopment traditionally handled by the Oklahoma City Urban Renewal Authority.
• Identification and development of job creation sites.
• Public/private redevelopment opportunities generated by MAPS 3, specifically a new convention center hotel.
• Implementation of required financing associated with projects.

New council member Ed Shadid will be voting on this proposal on the same day he takes office, so he'll need to be a fast learner.

Anyway, what are your thoughts?

[bornhere]

O'Connor said proceedings of the existing public trusts will still be subject to the Oklahoma Open Meetings and Open Records laws. She was unsure whether the expenditures of The Alliance, which will operate with public funding, will be subject to open records laws.

If you're looking for the devil in the details, there it is.

[Doug Loudenback]

I've just taken a look at the City Council agenda. This is item VI. AD.

AD. Agreement for Professional Economic Development Services with the Alliance for Economic Development of Oklahoma City, Inc. and the Oklahoma City Economic Development Trust, to institutionalize existing economic development practices, and consolidate and coordinate existing economic development functions, May 1, 2011 through June 30, 2016.

Two PDF documents are shown although the associated text also reads,

One or more files are marked confidential and are hidden

The 1st PDF file is only 2 pages and is a memo which I've copied below:

Page 1


Page 2


The 2nd PDF file is a 35 page PDF file titled, "Agreement For Professional Economic Development Services With the Alliance For Economic Development of Oklahoma City" is presently at this location. I say, "presently," since OKC PDF files seem to habit of not having persistent links. Today, it works.

I've not read this lengthy document yet, but it is obvious from a quick look that this proposal has been in the works for quite some time ... otherwise, it would not contain the precise detail that it does.

[MIKELS129]

this is very disturbing...

[Doug Loudenback]

Not arguing at all (I'm still trying to hash this out), but what do you find to be disturbing? Your greater detail will help me (and others) think this through.

[barnold]

This is what big money will buy you......votes on the council.

Only one newly elected who isn't beholding to this. Wonder when someone on the shoe will ask exactly how much money has been diverted from the GF to the Economic Development over the past several years?

[soonerguru]

I think we need to get a rest from "outside entities" giving their economic development assistance. Frankly, as much as I love the guy, Larry Nichols can go screw himself right now for falsely injecting himself into this disturbing city council smear campaign against Ed Shadid, a good man.

"Build yer freakin' skyscraper and shut the hell up" is my generic viewpoint right now. No, I'm not a big populist, but I think Sir Larry has acted like a huge richard and should take a timeout before he uses our tax dollars to prop up his divisive agenda. He's turning into a huge political operative. Fine. Just don't use our tax dollars to do it.

[Larry OKC]

It sounds like a good idea on the surface. But I am uncertain on this. Some obvious questions come to mind.

1) Why does the City need a 3rd party to co-ordinate City incentives (wouldn't that be one of the job functions of the City Manager/Staff?
2) If they are just "out sourcing" the job currently being done by City employees, will there be a reduction in City Staff as a result?
3) Why the further co-mingling of Chamber and City personnel?
4) According to Steve's article the City is already paying the Chamber an unspecified amount for economic development, why aren't we using that money?
5) Seems like duplication of efforts (existing trusts etc will continue to exist). To the "consumer", this may be streamlined, but looks like just another level.
6) Good, bad or indifferent, it seems the thing behind this is to secure the funding for the Convention Center hotel (mentioned in the article and the memo).

Again, just don't know. Without more info would be inclined to decline it or at least postpone it until more details come forth.

[Midtowner]

Sounds like the Oklahoma Industry Authority reincarnated. Some may remember that. Things didn't go well.

[swilki]

It sounds like a good idea on the surface. But I am uncertain on this. Some obvious questions come to mind.

1) Why does the City need a 3rd party to co-ordinate City incentives (wouldn't that be one of the job functions of the City Manager/Staff?
2) If they are just "out sourcing" the job currently being done by City employees, will there be a reduction in City Staff as a result?
3) Why the further co-mingling of Chamber and City personnel?
4) According to Steve's article the City is already paying the Chamber an unspecified amount for economic development, why aren't we using that money?
5) Seems like duplication of efforts (existing trusts etc will continue to exist). To the "consumer", this may be streamlined, but looks like just another level.
6) Good, bad or indifferent, it seems the thing behind this is to secure the funding for the Convention Center hotel (mentioned in the article and the memo).

Again, just don't know. Without more info would be inclined to decline it or at least postpone it until more details come forth.

Agreed.

Also, the whole line about not knowing if the financial records would be open to public disclosure is a litte weird IMO. I am not a financial guy by any means, however, I do work for a nonprofit. I know that our 990 Tax Form is open to the public (as should any 501(c) organization) and it in the last year the IRS has changed the form and made it much more detailed. So, to a certain extent their records would be open to the public.

This whole thing sounds like a giant waste of money.

[Spartan]

No, if you want "devil is in the details" or the "ah-ha! holy crop" point, it's that they want tap into M3 use tax. They need a new clubhouse I guess.

[soonerguru]

This has creepy overtones, and yes, it does smack of the Oklahoma Industries Authority shell group that ultimately empowered the nitwits at Urban Renewal. We need to get someone less politically charged to work on professional economic development than Larry Nichols.

[Doug Loudenback]

This item has been continued from today's council agenda for two weeks.

[Kerry]

You guys are going to soil yourselves if Shadid votes Yes. In my opinon anything that takes OCURA out of the redevelopment loop I am for.

[Midtowner]

This has creepy overtones, and yes, it does smack of the Oklahoma Industries Authority shell group that ultimately empowered the nitwits at Urban Renewal. We need to get someone less politically charged to work on professional economic development than Larry Nichols.

The group would very arguably be unconstitutional (as the OIA was held to be).

"A. Except as provided by this section, the credit of the State shall not be given, pledged, or loaned to any individual, company, corporation, or association, municipality, or political subdivision of the State, nor shall the State become an owner or stockholder in, nor make donation by gift, subscription to stock, by tax, or otherwise, to any company, association, or corporation." Oklahoma Constitution, Art. X, section 15.

(and there's not an "otherwise provided" which is applicable).

And further, "The Legislature shall not authorize any county or subdivision thereof, city, town, or incorporated district, to become a stockholder in any company, association, or corporation, or to obtain or appropriate money for, or levy any tax for, or to loan its credit to any corporation, association, or individual." Art. X, section 17.

At any rate, if no one recalls, the OIA was a Public Trust. The beginning of their end was State ex rel. Cartwright v. Oklahoma Industries Authority, 1981 OK 47, 629 P.2d 1244. The OIA consisted of the Gaylords, the Kerrs, etc., basically, the same old money crowd that'd probably be in charge of this non-profit. At that time, they were a public trust and had refused to hold their records open to inspection, and to further hid them from the Attorney General, they kept them in 13 different offices, none of which kept regular hours, and had basically ignored the AG's request for copying. They also claimed that certain bank accounts of the OIA were off limits because they were just used to "funnel money" (no discussion was given regarding the to and from ends of said funnel).

http://www.oscn.net/applications/osc...sp?CiteID=4995

This case essentially unraveled the OIA and held its records open to the public. The AG's next move would have been to criminally charge all of the conspirators, and he would have succeeded, but for a despicable campaign by the Daily Oklahoman, consisting of many first page editorials filled with absolute falsehoods and mischaracterizations, calling the AG "anti-business" (and worse). Mike Turpin beat Cartwright in the primary and promptly shut down the investigation. Had it continued, the political makeup of Oklahoma would probably look a lot different today as some of the power brokers would have emerged from this thing with felony records and prison stays.

So now, we're looking at replacing the OIA with a non-profit, which unlike the OIA, wouldn't be subject to the sunshine laws which govern public trusts. And we're wanting to allow them to give away the public's money (which is clearly unconstitutional) for the nebulous purpose of "economic development." This does not sound like a good idea at all.

Perhaps the powers that be suspect that they'll have a complicit Attorney General, and that no citizen will have the knowledge or chutzpa to challenge their little arrangement. Two words come to mind... two potentially very profitable words to an attorney in private practice if this sort of arrangement was to be realized: "qui tam."

[Hunt4Mayor]

This is going to get fun. Glad people are waking up a little 'round here.

[Hunt4Mayor]

Thanks to Steve for the article, and Doug for all the information. Proof we need serious media reform in this town. If we had stuff like this on the radio and tv on a regular basis, they couldn't get away with this stuff. Have a look at this thread, it's never too late to think about these issues... http://www.okctalk.com/showthread.ph...ighlight=shunt

[Midtowner]

To be clear, Steve, there's nothing obviously inappropriate about that contract. They are going to pay a private not-for-profit company to do administrative tasks previously delegated to public trusts. That's totally legal and above board. Further, consolidating economic development entities under one umbrella is probably a smart move from an administrative point of view. It might help for the functions of OCURA and OCEDT to be performed under one roof to set up packages to lure in out-of-state entities.

At any rate, there is adequate whistleblower protection, if someone will just pay attention. Two AG opinions seem to indicate that all will be alright with the world:

1) http://www.oscn.net/applications/osc...?CiteID=413183
2002 OK AG 37; and
2) http://www.oscn.net/applications/osc...id=49110&hits=
1981 OK AG 109.

I think the tinfoil hat business is a little premature. Sorry to come off that way earlier. This does smack of something in our recent history which was highly corrupt, and certain power brokers should have gone to prison. We should wait and see (and I believe there are adequate remedies at law to make sure we can see what these guys are doing with our money) whether this entity serves the public or serves special interests. I'd revise my above statement that I didn't think the Open Meetings/Open Records Act could apply to these guys, because it looks like there's a colorable argument that they do.

That said, we have an Attorney General who rather than prosecuting anything illegal here, would probably be more likely to be complicit in it.

[rcjunkie]

This is going to get fun. Glad people are waking up a little 'round here.

Moth balled for months, and still clueless.

[Spartan]

By the way, Steve Hunt, the Chamber and CVB certainly work together a lot, but the money that the CVB gets from the city is spent managing the convention center and advertising OKC as a destination for conventions, horse shows, and tourism. That's what that money goes toward.

[OkieDave]

Here is the full contract 27 pages laying it all out.

Why not just hire a person or 2 in the city manager's office to do just this and save $500,000+ a year? Seems like it is about doing an end run on accountability. If the deal is worth it for all parties, it will happen.

http://www.okc.gov/agendapub/cache/2...1100635903.PDF

[soonerguru]

I haven't studied this in depth, but I do understand the need for secrecy when dealing with corporate relocations. We also need to act swiftly when it comes to offering incentives. Apparently, this has been kicked down the road a while, which will allow for more time to study the proposal.

[Hunt4Mayor]

I haven't studied this in depth, but I do understand the need for secrecy when dealing with corporate relocations. We also need to act swiftly when it comes to offering incentives. Apparently, this has been kicked down the road a while, which will allow for more time to study the proposal.

Documented perfectly in Greg LeRoy's fine book The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation

[OkieDave]

OKC.gov does have a problem with keeping the url for pdfs this should probably work to see both documents, Ed Shadid asked good questions, he is obviously independent of special interests and wants openness. http://www.okc.gov/agendapub/agdocs....a&itemid=49145

[OkieDave]

Jim Couch was dealing with Continental Resources for months and kept it quiet what is the need for extra secrecy? If it makes sense it will happen.