Downtown Development Overview

[Conan71]

If the City of Tulsa did it's math right then the total up front subsidy given to the developer is less than the net present value of the increase in property tax receipts on that property (the "increment") over the life of the TIF.  The idea is that if Santa Fe Square requires a $36m subsidy up front but generates revenues with a present value of $50m over the life of the TIF then the city is a winner.  It even gets some extra money to throw around.  

That math is a little bit of black magic that can be massaged, of course, but if the economic development people at City Hall got it figured out then the city shouldn't be losing money on this.  

It also depends on how they structure the TIF financing.... is it a direct cash subsidy?  Is it a zero interest loan so that the city gets back its money minus inflation?  That may be publicly available info but I honestly don't know.  

That's the beauty of a TIF.  No cash changes hands from the city to developer.  In exchange for what is basically a period of partial tax abatement for the developer, the city gets increased property tax value and higher ad valorem receipts from the surrounding area.  The city also realizes the benefit of any transient sales tax generated by the development.  With this being in downtown, near ONEOk Field, and in a major entertainment area, I suspect this will generate a good deal of transient sales tax from the suburbs and from out-of-state business travelers.

A great example is all the other development which the $16 million TIF for Tulsa Hills helped create.  There's been an explosion of new housing development and other retail and commercial development in SW Tulsa as a direct result of that center going in.

One argument we used in the TUWC against Simon's proposed Turkey Mountain development was what was known to be a $30 million TIF request to pay for a new bridge over W. 61st St.  Since Tulsa Hills had pretty well stoked all the other development in the area, it would have been diminishing returns for Simon's project.  Simon is the largest mall developer in the world and the largest REIT in the United States.  For them, they could raise the cash to complete their project without a TIF, but it's simply the game they choose to play.  

If not for the pending TIF request, I might have stayed out of that fight as it would have been a completely private transaction between buyer and seller.  In my opinion, the TIF put it under public scrutiny at that point (unless you were a legit neighbor who had traffic or other concerns).

[TulsaGoldenHurriCAN]

They said in a news piece a while back that they are finishing The Edge first and want it 60% leased before starting on The View.  I get the impression they just don't have the capacity to develop two projects of that size simultaneously. 

Ok that makes sense. Thank you!

Seeing the demolition made me think they had planned to start on it earlier. I guess they got the demolition out of the way early so that wouldn't be a hold up and they can start as soon as the Edge is done.

[dsjeffries]

From News on 6
The Edge is the first of two new properties American Residential is building in the East Village.

Meagan: "Are you experimenting with this before you start on The View at all?"
Ganzkow: "Yeah. This one, The View, which is our next one, is 200 units across from the ballpark is a different concept than this one."

Most likely pricier, he said, but the volatile oil industry is something that can't be ignored.

"Things are going to slow down and we would like to find out exactly what's going to happen with Williams' merger and so forth," he said.

Ganzkow said they have a goal of filling 100 of the 160 units at The Edge before even starting on The View.

[hello]

I hope they adjust their plans to make more affordable (that is, around $900-1200) a month rent. Rents at the Metro are insane.

[heironymouspasparagus]

This one is much more worthwhile in that there is a direct increase in the developed value of the land which will out-strip the annual exemption for the TIF.  Add in new convention business which might come here due to the increased hotel space in the development and you are now importing sales tax dollars.  It also has the "rising tide" effect on all properties within a few blocks and increases their assessed value.

I was skeptical & jaded on this one as well at first, but looking at the wisdom behind it, it's a slam dunk great deal for the tax base and it benefits local rather than out of state developers.  The developers on this have already invested millions upon millions in downtown prior to this and on other current projects they are working on.

I can live with that...am not so wholly invested in being "anti-Santa Fe" that I can't wait and see.  That would be good....no, that would be great!



You almost lost me at the "rising tide", though...that has always been the plaintive bleat of BS'ers everywhere...the Republicontins that started us down the Reagan Fantasy Voodoo Economics Trail.....

[Bamboo World]

These things are used as a semi-private "sandbox" for political patronage.

I'm not "anti-Santa Fe Square" either, but I concur with your previous opinion.  Rising tides aside, these types of deals primarily benefit a few, not the public at large. 

[heironymouspasparagus]

If the City of Tulsa did it's math right then the total up front subsidy given to the developer is less than the net present value of the increase in property tax receipts on that property (the "increment") over the life of the TIF.  The idea is that if Santa Fe Square requires a $36m subsidy up front but generates revenues with a present value of $50m over the life of the TIF then the city is a winner.  It even gets some extra money to throw around. 

That math is a little bit of black magic that can be massaged, of course, but if the economic development people at City Hall got it figured out then the city shouldn't be losing money on this. 

It also depends on how they structure the TIF financing.... is it a direct cash subsidy?  Is it a zero interest loan so that the city gets back its money minus inflation?  That may be publicly available info but I honestly don't know. 

Ok, so let's give them 36, they give us back 50 over a long time.  Sounds like a small, but real net return.  Hopefully.



So, with that in mind - giving $3.6, and getting $5 back - let's take a little trip away from Crazytown, USA where so many "group-think" Republicontins live and take a quick ROI glance at something that Oklahoma as well as most of the nation have resisted mightily for eternity.  If we wanna get something back for a public investment of funds, then why not do something time proven and absolutely reliable.  As well as being good for many more members of society than just the truly "entitled few" - the 1%'ers?  

If giving $3 and getting $5 is good, then one would logically understand that giving $1 and getting back $7.5 would be an even BETTER trade... wouldn't one?   Unless, one were of that pesky, under-educated, ignorant masses of Republicontins who are fighting so hard to resist the idea of paid college tuition.  The "Long Live Trump/Cruz" crowd.  And spewing lies, hatred, accusations, and calling derogatory names....

THIS is the "rising tide" that floats ALL boats!!

https://www.reddit.com/r/SandersForPresident/comments/44oi29/evidence_shows_free_college_pays_a_613_return_on/

[heironymouspasparagus]

I'm not "anti-Santa Fe Square" either, but I concur with your previous opinion.  Rising tides aside, these types of deals primarily benefit a few, not the public at large.  

Whoa!!  I have just stepped into a Bizarro World that I am not sure I understand....I think I kind of like it, but it is so strange and different, I am not now exactly sure how to react...

Someone agrees with me!!!

How weird is that....?

Thanks!  It's a good feeling.

[Bamboo World]

Thanks!  It's a good feeling.

O frabjous day!   

[TulsaGoldenHurriCAN]

Ok, so let's give them 36, they give us back 50 over a long time.  Sounds like a small, but real net return.  Hopefully.



So, with that in mind - giving $3.6, and getting $5 back - let's take a little trip away from Crazytown, USA where so many "group-think" Republicontins live and take a quick ROI glance at something that Oklahoma as well as most of the nation have resisted mightily for eternity.  If we wanna get something back for a public investment of funds, then why not do something time proven and absolutely reliable.  As well as being good for many more members of society than just the truly "entitled few" - the 1%'ers?  

If giving $3 and getting $5 is good, then one would logically understand that giving $1 and getting back $7.5 would be an even BETTER trade... wouldn't one?   Unless, one were of that pesky, under-educated, ignorant masses of Republicontins who are fighting so hard to resist the idea of paid college tuition.  The "Long Live Trump/Cruz" crowd.  And spewing lies, hatred, accusations, and calling derogatory names....

THIS is the "rising tide" that floats ALL boats!!

https://www.reddit.com/r/SandersForPresident/comments/44oi29/evidence_shows_free_college_pays_a_613_return_on/

If everyone had access to free tuition, would those numbers stay the same? Would the value of a degree remain what it is now? Degrees seem to be declining in value and increasing in price. Still far better than no degree (depending on which degree).

[Conan71]

I'm not "anti-Santa Fe Square" either, but I concur with your previous opinion.  Rising tides aside, these types of deals primarily benefit a few, not the public at large. 

I disagree this doesn't benefit the public at large.

This is one though which manages to:

-Eliminate two city blocks worth of surface parking and adds stacked parking for public use in addition to tenant use
-Benefits local developers so profits go back into Tulsa's economy, not Dallas, Charlotte, New York, etc.
-More shopping, dining, hotel space, and convenient living space for people who wish to live and work within the IDL
-Creates denser development which (in an ideal world) means less money spent to maintain sprawling infrastructure and more money for education and public safety.

Here's where it could hurt: higher property values and demand to live in the IDL may mean there may not be affordable housing in the IDL any longer.

[erfalf]

Ok, so let's give them 36, they give us back 50 over a long time.  Sounds like a small, but real net return.  Hopefully.



So, with that in mind - giving $3.6, and getting $5 back - let's take a little trip away from Crazytown, USA where so many "group-think" Republicontins live and take a quick ROI glance at something that Oklahoma as well as most of the nation have resisted mightily for eternity.  If we wanna get something back for a public investment of funds, then why not do something time proven and absolutely reliable.  As well as being good for many more members of society than just the truly "entitled few" - the 1%'ers?  

If giving $3 and getting $5 is good, then one would logically understand that giving $1 and getting back $7.5 would be an even BETTER trade... wouldn't one?   Unless, one were of that pesky, under-educated, ignorant masses of Republicontins who are fighting so hard to resist the idea of paid college tuition.  The "Long Live Trump/Cruz" crowd.  And spewing lies, hatred, accusations, and calling derogatory names....

THIS is the "rising tide" that floats ALL boats!!

https://www.reddit.com/r/SandersForPresident/comments/44oi29/evidence_shows_free_college_pays_a_613_return_on/

SO because all these more people will go to college they will also get jobs that pay commensurate with the current graduating flock and at the same time make available all these extra seats that would be desired? I've got a bridge to sell you buddy.

Belongs in the politics section. However, you make a good point on another front. An entity like the city/state claiming this is a good investment usually makes me think it is just the opposite. And it usually is.

[heironymouspasparagus]

O frabjous day!  

Hah!!   You have been peeking at the little picture under my name!


Yassss.... dino yassss!

https://www.youtube.com/watch?v=emA-IK2RcKY

[Bamboo World]

I disagree this doesn't benefit the public at large.

What heironymouspasparagus posted (with a couple of my grammatical/spelling corrections):

In general, TIF [districts] don't seem to be much more than corporate welfare (like BKDotCom facetiously stated.)  Santa Fe in particular, I suspect there would be much better/greater return to society on that investment (and more), over a much longer time if money used for a public transit, or education funding.   It is likely a big benefit to the insiders getting the break.  Will it help the city?  Probably some.  Will it hurt the city?  Probably some - a little more.  At best, I think it is a small loss.

These things are used as a semi-private "sandbox" for political patronage...

What I posted, in general agreement with heironymouspasparagus's post above:

I'm not "anti-Santa Fe Square" either, but I concur with your previous opinion.  Rising tides aside, these types of deals primarily benefit a few, not the public at large.
 

I'm not saying that the public at large will not benefit from the Santa Fe Square development.  But the prime beneficiaries are the few people directly connected with the development, not the general public.

A few more comments/corrections:

This is one though which manages to:

-Eliminate two 1.44 city blocks worth of surface parking and adds stacked parking for public use in addition to tenant use
-Benefits local developers so profits go back into Tulsa's economy, not Dallas, Charlotte, New York, etc.
-More shopping, dining, hotel space, and convenient living space for people who wish to live and work within the IDL
-Creates denser development which (in an ideal world) means less money spent to maintain sprawling infrastructure and more money for education and public safety.

Here's where it could hurt: higher property values and demand to live in the IDL may mean there may not be affordable housing in the IDL any longer.

-Parking:  In the designs I've seen, the proposed parking garage along Greenwood Avenue is not wrapped with pedestrian-friendly frontage.  It ought to be, especially if the project is using TIF.

-Benefits local developers:  I agree!  A few developers and their associates will benefit!

-Creates denser development which (in an ideal world) means... 

In my opinion, Frankfort ought to be re-opened to vehicular traffic, especially if the project is using TIF and if 1st and 2nd remain as one-way streets. 

In one of the project renderings, I counted about thirty acorn lights.  Thirty -- and that's just along Elgin and Second.  Thirty more acorn lights might be planned along Greenwood and First, too, as far as I know.  The streets surrounding the development ought to have zero acorn lights, especially since its funding is relying on TIF.

In one of the project brochures, a "brick-paved pedestrian plaza" is touted.  I'm not saying that won't work or can't work in Tulsa, but brick (and brick-like) pavements for pedestrians have failed almost everywhere they've been installed here.  The bricks subside, creating uneven/hazardous walking surfaces.  The sidewalks around Guthrie Green are some of the best quality brick pavements installed for pedestrians in Tulsa.  But even at Guthrie Green, some of the bricks are failing already.  They wouldn't pass an ADA standards test because they're too uneven.           

[cannon_fodder]

Riding past OneOK field last night it occurred to me: In the 7 years since the City/TDA took control of land for and around the stadium, I don't think any of the City owned land has been developed for anything other than reconciliation park. Rusty Crane opened. Redevelopment of the old bar across from the stadium is ongoing. The new apartments were built. A lot has gone on in the Brady, but I don't think any of the land that was transfer to the City/TDA as part of the stadium deal has been developed at all.

Is that accurate?

I see the TDA has issued a RFP on the lots between Rusty Crane the the stadium:
http://www.tulsadevelopmentauthority.org/wp-content/uploads/2016/04/Block-44-RFP.pdf



- - - - - -
re college graduates:  Boston, Manhattan, the research triangle, San Fran, Minneapolis, etc. all seem to do just fine with high levels of college graduates. So does Norway, Sweden, Denmark, Belgium, etc. I don't think you hit a magic number of college graduates and suddenly wages drop because there are too many educated people. The available examples seem to indicate otherwise.