New East Tulsa outlet mall location

[cannon_fodder]

Thanks Conan.

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

[heironymouspasparagus]

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.

[PonderInc]

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.

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.

[Conan71]

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.

[cannon_fodder]

Tenant lmprovements and Recruitment - $4 million

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.

[Red Arrow]

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".

[Conan71]

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.

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.

[Red Arrow]

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. 

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

[PonderInc]

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.

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?

[cannon_fodder]

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

[PonderInc]

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

[Conan71]

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?

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.

[SouthTulsaCountyDude]

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.

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.   

[PonderInc]

...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.

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.