I'm guessing this is partially in response to the TIF for the Santa Fe Square. I am also skeptical if this will really help Tulsa.
In this case, the before-and-after make it look like a no-brainer: Take a run-down building and a couple city blocks of parking lots worth about $60k/year in taxes and turn them into a bunch of huge buildings and a parking garage worth a couple million a year in taxes. Other businesses and developments are going to try the same thing ("why them and not us??").
The initial ask for this was very high and for 20 years! I wish the counsel would've counter-offered a bit lower at least.
I am happy about this development moving forward, but wonder will they put other projects on hold to move this one forward (e.g. delay the "Boxyard") as this one provides a much higher incentive to finish and take advantage of the tax savings. Why turn the dirt lot at the planned Boxyard into a 6-figure a year tax burden when they can expedite this one and have those tenants move here at such a discount?
Yes, this TIF should ultimately spur more development, but the big things Tulsa has already paid for with taxpayer money downtown (BOK Center, Drillers Stadium, Convention Center, tax credits for tons of remodels, 1st st lofts, etc etc!) are a big reason this was even proposed. This development is piggy backing on all of those others and the new tax revenue from something like this should be one of the big payoffs for all of the taxpayer money invested into downtown.
At what point will the city get any ROI for hundreds of millions of tax dollars spent to help downtown and private businesses? I know tax revenue downtown is much higher than what it was 10 years ago, but many downtown places have drastically discounted tax rates and TIFs as-is.
I worked out the math for this on the Santa Fe Square thread. I’m somewhat of a skeptic of this one but did arrive at what I think are some positive conclusions:
Current tax assessment on this parcel is just under $20K per year. The 20 year repayment of the TIF works out to about $1.44 million per year. Looking at the assessed value of the Williams Center development of about $90 million, that property pays about $1.3 million per year in sales tax. With this being a $160 million development, I’m assuming that would be the assessed cost and the property will be assessed in the range of $2 million per year, it will bring in about $560,000 per year in new net property tax or $11.2 million over 20 years. Figure in additional demand for infill in the area and all property values for several blocks will rise.
Let’s also assume more hotel rooms will help Tulsa compete for more convention business, there’s real sales tax importation. At least that’s always the reason we weren’t getting conventions was not enough hotel rooms and not proper convention space.
The best conclusion of all is this is home-grown development. We are not giving a hand out to some wealthy out of state developer who got that way from gaming the system all over the country and for whom it’s an expected cost of having the honor of their crappy development.
I could see where focus on this project might slow down any unannounced expansion plans for McNellie’s Group restaurants but no reason for this to slow down any other Nelson-Stowe development that is already on the books. They have tenants signed for the Box Yard, there’s no reason to delay getting a revenue stream coming in from that.
In a way, I find it somewhat fitting that a project Elliot is involved with would get a TIF for that area. He took huge risks developing in that part of downtown which was still somewhat derelict and he nearly went broke with McNellies and El Guapo’s early on. A lot of what has happened in the Blue Dome since 2004 owes somewhat of its existence to Elliot’s (and a few others) vision.
