The Tulsa Forum by TulsaNow

It will be at 5th and 129th East Avenue

Truly curious what this does to Simon and the announced Cherokee mall.  The Cherokees are apparently “shovel-ready” and can mobilize in 5-6 months.

Maybe Tulsa will be known as "Outlet Mall capital of the world."

Not all feasible. I like Simon for traffic and retail viability. 5th and 129th is a bit out of the way for most, but on the way if you're going to the cherokee one, so a slap in the face to them.

I see a lot of designer sunglass stores and custom license plates.

As it sits now, there is ZERO traffic viability for Simon. 

How do you know it will be located at 5th and 129th? They haven't announced the location yet

http://www.newson6.com/story/26831966/another-upscale-outlet-mall-in-the-works-for-tulsa

And there you have it.   8)

Horizon appears to be trying to get the jump on its two competitors by announcing it will break ground next summer.  Looks like all three are in a race and trying to cut off the other two by signing up tenants.  I assume announcing a ground breaking date is intended to help Horizon secure tenant commitments and that without a sufficient number of commitments it will not move forward.  As with so many past announced Tulsa developments, I believe it when dirt starts moving.



Groundbreaking will be next summer for a new outlet mall in east Tulsa, which officials said will provide 1,200 permanent and an additional 1,600 seasonal jobs.

The announcement was made during a news conference on Wednesday at City Hall.



The upscale, deco-style mall — to be built by Michigan-based Horizon Group Properties — is the third outlet mall announced for the Tulsa area in recent months.


The Horizon Group President and CEO Gary Skoien said Wednesday that although there are two other planned outlet malls for Tulsa, "there's no doubt in my mind that this outlet center will be the finest-designed and best location, and provide the most benefits for the Tulsa region."


The mall will be built next to an old Albertsons warehouse between 129th and 145th East Avenues near where I-44 connects with I-244.


Horizon Group is the developer of The Outlet Shoppes at Oklahoma City as well as 11 retail developments throughout the United States.


The planned mall will feature 90 stores and will open in 2017.


The project will also include 355,000 square feet of gross leasable land for restaurants, hotels and additional retail operations development.


Tenants for the new mall will be announced once development is underway, officials said Wednesday.


The 90 retailers will have estimated annual sales of $120 million, officials said.


They estimate the project will provide 1,000 construction jobs, 1,200 permanent jobs and 1,600 seasonal jobs. A breakdown of how many of those jobs would be full- or part-time was not immediately available on Wednesday.


Officials said the mall will have a layout similar to The Outlet Shoppes in Oklahoma City, but the design will reflect the art deco style of architecture that is prevalent in Tulsa.


Horizon’s announcement follows a flurry of recent announcements, including one made last month by Cherokee Nation Businesses, which is bringing a premium outlet shopping and new entertainment district to the Hard Rock Hotel & Casino.


The proposed “Cherokee Outlets,” to be located west of the casino and open by late 2016, will offer more than 300,000 square feet of leasable space with a focus on premium and upscale shops for about 100 retailers.


Woodmont Outlets, an affiliate of Fort-Worth-based The Woodmont Co., plans to invest $80 million in the Cherokee Outlets development.


Also, Simon Property Group, which is the owner of Woodland Hills Mall, recently announced plans to build an upscale outlet mall in west Tulsa to be located north of the Tulsa Hills area near U.S. 75 and 61st Street.

"Upscale outlet mall capital of the world"

Branson ain't got nothing on Tulsa!

On this forum we don't wait around for formal announcements

Deco-style?

Flappers buying BOGO khakis?



Keep in mind even Branson couldn't support more than one. Vegas has two, but only one is a real outlet mall. The other is just crap sold in close proximity to other crap.

Good intel.

When has anyone on the internet ever waiting for confirmation.

Don't these malls need commitments from tenants before they can secure funds and build?  At some point the retailers are going to choose which proposal they want to be a part of and that should thin out the heard.  There is no way there is enough demographics to support three outlet malls.  It seems very unlikely to me that the major outlet retailers (Nike, Gap, etc.) would commit to multiple outlet locations in a market the size of Tulsa.

Maybe if Tulsa connected them all with trolley service

Tulsa would try to use those rubber tired things that some people mistakenly call a trolley.  People wouldn't ride them since they want to take their own cars to malls and those things are really only buses anyway.  Then the anti-transit folks would say "see, nobody wants to ride trolleys". 

Yeah...I was being sarcastic.  There won't be 3 malls to connect and there wouldn't be usable public transit.

I actually expected so.

I'm rooting for this mall to actually get built.  Why?  1) Sales tax stays in Tulsa, 2) this helps drive development in a part of the city that could use it and 3) it hopefully kills the mall by Turkey Mountain.  I think the Cherokee's still build a retail development but likely not an outlet mall.

There already is retail development going on across the road East of the Hard Rock Casino, with additional land yet to be developed.  Don't know if the Cherokees are directly involved in that or not.

http://www.tulsaworld.com/news/government/council-approves-tif-district-for-eastside-outlet-mall-project/article_0aef3773-501f-5588-9e36-3224d32def4c.html


Whats next now? 

Horizon has to beat the bushes and start getting leases signed.  Without leases, it won’t happen.  I’m considering the Woodmont/Cherokee deal as dead considering they were supposed to break ground last April.  I believe they thought they could pair up with Simon like they eventually did in St. Louis.

I’ve heard speculation from others that Simon has no intentions to develop in Jenks but is keeping up appearances to help deter lessees from signing with Horizon.  To that end, I do believe Simon is in the permitting process with the city of Jenks at the moment which would tend to make one think they are moving forward.  Only time will tell.

Simon was approved by the Jenks Planning Commission earlier this week and there's a zoning change notice on the site right now. Simon will go to the Jenks City Council here in next couple of weeks. A TIF is already in place and can be reused from the riverfront development that was started and then died back in 2008.

TIF districts for suburban sprawl development make no sense to me.

Here's my best attempt to explain what I know about TIFs.  There are lots of variables, and each one is sort of customized and different, so it's hard to wrap your head around.

First off, you can have TIFs that capture new sales and ad valorem taxes, or just new sales taxes.  Either way, you determine the boundaries of the TIF, and then figure out what your current (baseline) taxes are for that area.  In a pure greenfield development like Tulsa Hills, the baseline for sales taxes is zero, and the baseline for property taxes is whatever they were for the undeveloped land. You continue to collect taxes as usual, but any new taxes that are generated above the baseline go into the TIF funds.

TIFs can be for districts or single-owner sites.  You can have a TIF for an area you want to improve (think Brady and Blue Dome districts, for example), where TIF money is spread throughout the district to improve streetscaping or whatever.  In this case, you have multiple property owners within the district, and you make the improvements as you go (as the taxes are collected).  

In other cases (like Tulsa Hills) you have a single developer building greenfield development.  In this case, you are borrowing money to fund infrastructure improvements, and paying off the bond using money collected through the TIF. Either the city borrows the money up front and pays itself back, or the developer borrows the money, and the city hands the money over to the developer so they can pay off their loans.

With the Outlet Mall TIF that just got approved, it will be a 25 year TIF that will only capture the sales taxes. My understanding is that the developer, not the City of Tulsa, will bond the infrastructure improvements for the outlet mall, and we'll pay them back from the TIF money that's collected.  They expect to capture enough sales taxes to pay off the debt.  So, if they fail to deliver the expected sales taxes (gosh, who's ever failed to make an accurate 25 year prediction?!) they will be on the hook for that money. Not the COT.

Meanwhile, everyone assumes that the ad valorem taxes will multiply and benefit whatever school district this is, as well as the library system, TCC, the health department, the county government, etc.  And I guess we get to poach sales away from the neighboring suburbs. Whatever.

Still, I think greenfield TIFs are silly.  The main justification is to prevent development from going to the adjoining suburbs.  But you have to be careful when you shoot yourself in the foot if you're trying to win a race.

In case of the Outlet Mall, here's what makes no sense to me:

In 25 years, we will begin capturing the full taxable value of whatever is being generated within the (now expired) TIF district. (That's assuming that outlet malls even still exist 25 years from now.  I doubt it.  Remember 1990. Yeah, things have changed in a quarter century.)  By then, guess what, all that new infrastructure that was built in 2016 (roads, water, sewer, etc) will no longer be brand new.  It will require maintenance, repair and replacement right around the 25 year mark.  And it will be the city's responsibility to maintain this public infrastructure.  To do this we will use.... wait!  We haven't been saving any tax dollars for the past 25 years, because we used it to pay off the debt to build this place.  So where will that money come from?  It will come from other developments and businesses throughout Tulsa that have been dutifully submitting their tax dollars all along.  But all those other places have their own infrastructure needs, so all the tax dollars are taken.  (Because, face it, we don't generate enough tax dollars to maintain what we already have, much less the new stuff we keep adding.)  So we can either have crappy infrastructure, or take out new debt to pay for the upkeep.

So we get an outlet mall that will be obsolete before you can say "Amazon delivers via drone" and we get the burden of maintaining a bunch of new infrastructure that was built to support something we don't really need.  Because, really, how many shopping districts can our population support?  It's not like we're growing in leaps and bounds. So it's possible that other shopping districts within the city limits will have decreased in value, causing their taxes (which we actually would receive for the next 25 years) to drop off.

This does not even include my problem with wasting resources on car-centric development, which will be even more ridiculous 25 years from now.

It's just a circle that goes round and round and makes no sense.  This is not the worst TIF district ever, since we will at least get some boost to property taxes for schools, county, etc.  But is it worth it?  I just don't think so.

I thought the justification for the thing was that we needed more sales tax revenue? What percentage of the revenue is going to the TIFF? If 100% of revenue goes to the TIF for 25 years, and the development spec is 25 years (standard spec for box stores) --- isn't it likely a total wash? At best we will gain ad valorem tax and milk the development 25 years from now. Most likely is that we spent all our sale tax revenue on the infrastructure for 25 years, and then 50% of future revenues goes to replacing infrastructure?

Jobs are not a very relevant factor. It will bring jobs, but adding jobs that require government subsidy (medicaid, section 8, etc.) probably don't make economic sense to subsidize. If there are 40 stores, there will be ~110 decent jobs.

Not being critical, I'm really trying to figure it out. What is the expected cash flow and ROI?

Well, the land appears to be completely undeveloped, so I would assume our sales tax baseline is zero. (There's an existing McDonald's, but I don't think it's part of the TIF district.)  Supporters assume that the outlet mall will attract other new businesses to the vicinity, and that would "increase" tax dollars.

It's funny b/c they assume that there's some pent up demand for shopping goods that we're not currently able to meet.  Only with a heavily subsidized development will we be able to meet our needs!  ("Did you hear you can buy an orangutan in that store over by the new outlet mall? I'm going to buy one today!") In reality, most of us are buying the things we need--shampoo, shirts, pogo sticks--at existing stores in town... and we can buy any specialty items on the internet.

So, yeah, I still don't get it. (I do sort of understand TIFs used to revitalize existing, strategic locations in the central core.  I also believe they should not exceed 15 years.)

Here's a nice staff report related to the outlet mall TIF district:
http://www.tmapc.org/Documents/Agendas/11-18-15/Admiral%20Place%20Com.%20Dev.%20Plan.pdf (http://www.tmapc.org/Documents/Agendas/11-18-15/Admiral%20Place%20Com.%20Dev.%20Plan.pdf)

The length of the payback would indicate the city will be getting a reasonable share of funds.  It was estimated that Simon was going to net the city $4m a year in sales tax (either our esteemed Mr. Bird’s numbers or Simon’s, not sure).  Let’s assume just the outlet mall on this location will generate $4m a year.  The TIF is for $20M with a 25 year payback, which means the city will end up receiving 80% of the normal sales tax collected.

The assessor’s web site shows the combined parcels of land (@130 acres total) owned by I-244 Admiral Land LLC is currently taxed at about $32K per year.  I would assume since the TIF is alleged to be via sales tax collection, that the property tax assessment on this parcel will be a good deal higher after there’s $80+ million in improvements.  The Crossroads Warehouse Center which is the fence line neighbor of this place is valued at $23M and paid $225K in property tax last year.  (Whoops, just found another 15 acre parcel belonging to same group that paid $3300 or so in PT last year.)

Now, consider that this project is much more than an outlet mall.  It will also have pad space for restaurants and space for hotels.  All told, this development group holds around 145 acres and the outlet mall should take less than 40.  As far as it being auto-centric, it’s right near the intersection of an interstate and interstate spur, there’s really no hope of pedestrian-friendly development right off a major interstate, especially when there’s a fair amount of warehouse space, trucking companies, tractor/trailer dealers, etc. in the immediate area this is not going to be any place we’d consider pedestrian-friendly in yours or my lifetime.

Somehow TPS and the COT own land that is hemmed in on the north and east by the I-244 Admiral property which currently nets no property tax.

East of the property on 145th, AEP/PSO is sitting on a 70 acre parcel that is netting $81 a year in property tax.  To the south of that, the tract pays $52 for 20 acres.  To the south of that is another fallow parcel of 20 acres paying $49 in taxes.  To the east of that is another 42 acres paying $56 a year in property tax.

There are a couple of churches in the area that pay no property tax.  If property values get hot enough, those might just be temped to relocate.  Over to Catoosa where they wouldn’t pay property tax either would be great!  Perhaps people living in some of the older housing additions in the vicinity might think about selling out.  

I’d say the upshot is there.  Granted, I will never believe the city can sales tax it’s way to prosperity.  Our needs and wants have always seemed to outstrip our means, at least in the last 20-30 years.  I also don’t care for sprawl nor corporate welfare, but the Tulsa Hills TIF appears to have been a really sound investment considering all the residential and commercial development it has helped catalyze.  I hate to see the great 5 and 10 acre mini-ranches in west Tulsa sub-divided, but that is what happens when people wish to live in suburbia and suburban property is becoming more scarce.

One advantage I do see this has over the previously-proposed Simon site on Turkey Mountain (aside from it wrecking great recreational space) is its access from the interstates is good and it’s in the eastern gateway to Tulsa which makes it attractive for people from western Arkansas and SW Mo.

I’d personally rather take a head-long dive into a tree shredder than go to an outlet mall.  The couple of times I’ve been in the last five years, I was unimpressed with the offerings and found nothing special about the pricing.  MC and I aren’t very materialistic and we try to support local retailers and eateries any time it’s possible to do so.  I generally hate big box retail shopping so bad, if I were to buy a Christmas or birthday gift from say Target or Best Buy, I’ll go on line just to avoid having to: park, dodge moving cars in the parking lot, screaming kids, and people with bad hygiene habits.

That would be too quick.  How about being thrown in feet first?
 
 ;D

That would rank right up there with a root canal without novocaine or a hot cheese enema.

Thanks Conan.

What I was missing is the finite payback. It isn't 100% for 25 years.

It's a backdoor way for the powers that be to support a new church - the outlet mall in Broken Arrow was there for a couple years with subsidies by the city, then after they went out of business, let it set for a while, then got a new church in there - Church at Battle Creek.  Avoid those pesky lawsuits and court events like the Ten Commandments on the state capital site generated.


I was just a little surprised that Rhema and the new First Baptist of BA didn't protest the competition, but I then realized that it will help draw to them, too.

Looks like the TIF will get about 2/3 of Tulsa's sales tax from the area to be developed, if I'm understanding this correctly.

Tulsa's normal portion of the sales tax is 3.1% of the total 8.5 ish% that we pay.  It appears that this TIF will capture 2.1%, leaving COT with 1%.

This is from the staff report previously linked to:
The sales tax increment is a portion of the City's sales tax attributable to investment and development within lncrement District No, 7, The sales tax increment shall be two and one tenths percent (2.1%) of the gross proceeds or gross receipts derived from all sales in lncrement District No. 7 that are taxable under the sales tax code of Oklahoma (including any and all amendments thereto and revisions thereof), regardless of whether the City modifies its sales tax rates.

C. The increment of the sales taxes generated by lncrement District No. 7 may be used to pay Project Costs authorized by Section Vlll of this Project Plan for a period not to exceed twenty-five (25) fiscal years from the effective date of lncrement District No. 7, as provided by law or the period required for payment of the Project Costs authorized by Section Vlll, whichever is less. During the period of apportionment, the sales tax apportionment fund (1) shall be available to pay Project Costs under Section Vlll, (2) shall constitute special funds of the City, or, at the direction of the City, the Tulsa lndustrial Authority, a public trust, or another public entity designated by the City, and (3) shall not be subject to annual appropriation as a part of the general fund of the City.

I know that for the first time ever, the COT is requiring an economist to review TIF proposals, which makes me happy.  But I still struggle with this.

Unless there are a lot of people who will travel from out of town to shop at an outlet mall in Tulsa (who don't already travel to Tulsa to shop), this still just appears to shift purchasing from one part of town to another.  Everyone who shops online is still going to shop online.  Everyone who already buys stuff in Tulsa will continue to buy the same amount of stuff in Tulsa (unless they suddenly have more buying power thanks to their part-time, low-wage job at the new outlet mall?).

In the meantime, we're incentivizing car-oriented growth in an area on the outskirts of town, where transit will be ineffective.  For this honor, we will accept 2/3 less sales tax dollars for 25 years.  And if the mall is wildly successful, we will certainly be told in 5 or 10 years that we need to add lanes to all  the adjacent streets that are used to access this land.

It appears that $6 million of the TIF funds will go towards a stormwater retention facility. That's nice, but guess what? Near downtown, we've got the Elm Creek stormwater plan that still hasn't been funded after decades of waiting.  This plan would allow a massive amount of currently undevelopable space to come alive and create walkable, bikable, transit-friendly urban development, near our city's core. 

In the meantime, $4 million of the TIF funds will go towards "Tenant Improvements and Recruitment."  Really?

Here's the breakdown:

Regional Detention Facility - $6.5 million
Public Infrastructure lmprovements   - $4.5 million
Landscape and Streetscape Improvements - $4 million
Public lmprovements Contingency - $1 million
Tenant lmprovements and Recruitment - $4 million
Project Preparation and lmplementation - $ 200k
Total: $20 million

We have been building sprawl for decades while receiving a full portion of the generated sales taxes.  And yet, we are still unable to provide basic services, maintain our roads, operate transit, or build/maintain critical public infrastructure.  Why do we think that offering a tax discount for 25 years for more car-oriented sprawl will somehow be more successful?

Still don't get it.  Still think it's dumb.

You make really valid points, however, I doubt this ends up being a 25 year payback if the TIF is capturing roughly 2/3 of the 3.1% the city gets from sales tax receipts.  At least using the anticipated sales tax revenue projections from the Simon proposal of $4M/year, this TIF would pay out in 9.6 years or so.  Add in the expected hotels and restaurants on the remaining 100 acres of land and the payback will end up being even quicker.  To my knowledge, Tulsa Hills either has paid out already or is very close and ahead of schedule. 

I was told the Simon proposal assumed a 50% scavenge rate at its location on Turkey Mountain.  My personal opinion is this site in East Tulsa will be more attractive to people from the region as access will be somewhat more simple than that of the site on Turkey Mountain.  It will also be far more visible to travelers along I-44 than the west Tulsa location and the Casino complex a couple of miles away helps with it being somewhat of a destination.

I have to agree that there will be more infrastructure needed in the future as other properties in the vicinity develop out and chances are we will still find ourselves 20 years from now just as broke and out of developable space.  Forced density infill may be the only thing that finally ends up stanching this trend of costly sprawl.

Something else hinges on this: Horizon’s ability to out-lease Simon to make this actually happen.  I’m curious what the recourse is if we get millions into this process and Horizon only has 20 leases and shutters he project.  That’s my main concern.

There’s little doubt if the land is not developed now, it will be at some point in the future.  There’s also little doubt that a tech park or high end industrial park would have a better permanent economic impact on the city, though it doesn’t guarantee that wages earned in the city limits of Tulsa won’t end up circulating back in Catoosa, BA, Owasso, Jenks, or on Amazon, etc.

This is nothing more than a kickback to the developer.  Clearly whoever develops the property will have most tenants in place before breaking ground...but if you can get the  public to pay $4mil of your operating costs, sweet!

I want a TIF to help with my firm's client improvement and recruitment. $40k would be nice.

Then ask for $80K.  That way you can give a "discount".

I meant to touch on this line item in my previous post.  TIFs, as I understand, are only intended for public infrastructure improvements such as access roads in and out of the development, stormwater retention ponds, sewer lines, etc. so I’m puzzled how this got past the council unless I’m incorrect on what TIF money can be spent on.

My understanding of how the $16M TIF came about for Tulsa Hills was the site prep ended up being a good deal more expensive than anyone expected due to all the rock substrate and almost killed the project.  Rather than the money being earmarked for “site prep” it went to laying out and paving Olympia Ave. through the site, sewer lines, storm water retention, etc.

Rocks, what a surprise.  I cannot believe the rock substrate was really unexpected.

I think this falls under the category of "attracting job generators," which I think is allowed for TIF usage.

One of the other failures of this project is that a TIF should support community planning and policy goals. The comp plan strongly suggested that new development should create walkable places.  Even when they were located outside the center of town, the goal was to create new mixed-use, walkable pods that could connect to other such places via transit.  People strongly rejected the status quo of car-centric sprawl and demanded a change towards more thoughtful types of development.

I realize that inertia and developer habits will continue to build lousy, car-oriented development for a while, even after the public has voiced their desire for an alternative.  Fine.  But we should be using incentives like TIFs to achieve our long-range goals, rather than to achieve the same old crap we've been doing for decades.  Why offer an incentive to get something no better than what we've been doing?  Why offer incentives that contradict a stated, citizen-driven policy goal?

What doesn't count as "attracting job generators?" Seriously, back to my idea of a TIF for my firm...

Funny, it doesn't say anything about retaining them...

I’ve not looked at the small area plan for the mile or so around here to see what was originally conceptualized.  Again, this backs up to a large warehouse and other businesses in the area are warehouses, tractor truck and trailer dealers, car repair shops, etc.  This area is a mix of industrial, pocket neighborhoods that popped up in the middle of nowhere 40-50 years ago and over-sized lots with a more rural feel.  Honestly, I doubt many people from this part of Tulsa participated in Plani-Tulsa.

An outlet mall appears to be inevitable for the Tulsa area.  I’d far rather see the design, sprawl, and activity on the outskirts of town than something more toward a population center.  Sometimes you have to choose your battles wisely.  Our time is better spent trying to influence parking and design standards and getting denser infill toward the center of the city and keeping the city from paving over green space than complaining about a project like this.  After awhile, city officials begin to think people with progressive development ideas are against all development if every new major development is met with criticism. 

I get why there is huge suck factor in this for you, but if we must have one of these in the city, be glad it is out east an in an area where it actually may become a catalyst for an improvement in property usage in the area and better ad valorem tax generation.  There’s better economic potential here than an REI, bank, and El Chico at 71st & Riverside, at least in terms of importing sales tax and enhancing property taxes.

Simon was in front of the Jenks City Council last week.   The City Council approved.   This Simon site seems to be further along than the others.   

I agree.  Fingers crossed that a lot of people who are traversing the country on I-44 are inspired to jump off the interstate and spend money in T-Town.  It's a much better location than on the slopes of Turkey Mtn.  (Although, really, the one planned by the Hard Rock Casino makes the most sense to me.)

My only concern is giving tax breaks to a development that's not in accord with the city's vision / development goals.  Personally, I'll never shop there or probably even see it unless I'm driving to STL and it's visible from the highway.