On Dec. 16, the Oklahoma City Council will vote on a tax increment finance district comprised solely of the Devon Energy world headquarters complex. Since the building site, less than two city blocks, is already part of the existing Downtown/Bricktown TIF district, why create a new TIF?
There appear to be two main reasons. The first is that only 16 years remain on the 25-year term of the existing TIF. The city wants to get an extra nine years of diverted ad valorem tax revenue from the $750 million Devon development by creating a new TIF with the maximum statutory life of 25 years, generating $90 million in additional revenue.
Restriction of the TIF proceeds to mostly fund the city's Core to Shore project appears to be the second reason. This would be accomplished by the city entering into a formal contract with Devon Energy, ensuring that the city will only use the TIF revenues for the purposes set forth in the Devon Development Conditions.
Oklahoma Gazette has fully supported all of the economic development issues submitted by the city to the taxpayers for approval and has been instrumental in initiating some of them. Devon Energy is an incredibly good corporate citizen and the Nichols family members are pillars of the community. We are blessed to have them in Oklahoma City.
The Core to Shore development plan is the most significant development plan this city has ever undertaken and adequate public and private financing is essential to its success. The city plans to immediately commit the 25-year revenue stream to funding a bond issue for that purpose.
Therefore, it's extremely important that every care should be taken in the creation of this extraordinary new TIF. Let's make sure it doesn't jeopardize either the continued development of Core to Shore or the public entities giving up revenues during an economically uncertain future.
State law requires the TIF review committee to determine if the TIF will have a financial impact on any of the affected public entities and to include the committee's findings in its recommendation for approval.
The Urban Renewal Authority's impact study of the Devon building sets forth the incredible economic benefits of Devon Energy and its building, but it doesn't address the TIF's financial impact on the affected public entities which provide our public schools, CareerTech, libraries, health services and county government.
These entities and their representatives on the review committee should do their due diligence in this regard before the TIF is approved by the City Council.
The City Council should also carefully review the contractual conditions for the use of the TIF's proceeds required by Devon before approving it. Oklahoma law clearly states legislative intent that no long-term contractual obligation shall be created when establishing a TIF district.
If our local economy is part of a long-term recession or depression, is it prudent to contractually tie up a quarter-billion dollars in tax revenue to specific and irrevocable projects, regardless of their present merit and perceived benefit?
State law also requires the city to make a maximum effort to allow full public knowledge and participation in the implementation of a TIF district. The magnitude of this TIF suggests that engagement of the public in its development is very important, since it would be implemented without an election.
On Dec. 2, the City Council is holding a statutorily required public hearing to provide information to the public and answer questions about the proposed TIF before it is considered by the city Planning Commission Dec. 11 and finally voted on by the City Council Dec. 16.
We're hopeful these issues can be addressed as the TIF is further considered.
Bleakley is publisher of Oklahoma Gazette.