The Norman Transcript

December 11, 2013

Norman City Council votes 8-1 for job development measure in North Park TIF district

By Joy Hampton
The Norman Transcript

NORMAN — Norman City Council member Greg Jungman took aim Tuesday night at the University North Park Tax Increment Finance District.

Jungman said he is not convinced that the TIF is a successful venture and voted against a measure that would allow the use of TIF funds to help secure a loan by the Norman Economic Development Coalition to build infrastructure in the corporate center and industrial park on the north end of the development.

NEDC has been working to bring jobs to Norman through developing the corporate center and industrial park on 60 acres of land. One potential client who is bringing quality jobs is expected to sign by the end of the year.

The retail portion of the TIF brought in $2.1 million in new sales tax dollars to Norman’s city general fund last year over and above the sales tax diverted to pay for the infrastructure in the development.

Jungman criticized the money set aside through the TIF for “dancing fountains” and other aesthetic amenities of the developing Legacy Park and the surrounding upscale shopping district along 24th Avenue Northwest.

“I have to stop supporting this scheme,” Jungman said. “Since we’ve adopted the TIF, there’s been no indication of sales tax growth. We’re not adding to the financial situation of the city; we’re actually taking away from it.”

Jungman said the city is paying for park amenities from a special pot while cutting funds to social services.

“It’s time to stop,” he said.

The measure was approved in an 8 to 1 vote.

The city council approved the University North Park TIF District on May 23, 2006, according to city staff notes.

The plan authorized public improvements within the TIF, including infrastructure improvements such as roads and intersection improvements and amenities to serve a hotel conference center, retail development, Legacy Park and a corporate center with an industrial park to foster and support employment opportunities for Norman.

The TIF works by setting aside a portion of the sales tax and ad valorem tax generated by the new business coming to Norman in the district to pay for the infrastructure to support that business development.

Once the infrastructure and the park are complete and all debts related to the development are paid off, the full tax amounts will revert to the partnering entities that benefit from those taxes.

In the meantime, a portion of the sales taxes still are going straight into the city's general fund — $2.1 million last year alone — and some property taxes are still going to the schools.

Additionally, all of the Public Safety Sales Tax money is paid to that city fund. No PSST money is diverted to the TIF fund.

Prior to establishing the TIF district, public schools and other entities affected by the tax had to agree to have a portion of those future taxes diverted to pay for the development.

Dozens of restaurants and retail stores have filled the area north of Robinson Street along 24th Avenue Northwest. The Embassy Suites Norman Hotel and Conference Center has brought multiple conferences and conventions to the city, and additional hotels being built near the Embassy Suites will expand the conference opportunities available for Norman, stakeholders said.

On the north end of the development, the NEDC purchased land from the UNP developer — the OU Foundation and its subsidiaries — at below-market prices in an effort to provide incentive tools for attracting employers to Norman who meet the criteria of the Oklahoma Quality Jobs Act, according to city staff notes.

The NEDC has received a grant from the Economic Development Authority to help with the cost of the business park development and infrastructure.

“We believe a bid for the infrastructure should be go out by the end of this year,” City Attorney Jeff Bryant said during discussions of the item during the city council study session Tuesday.

It will take six to nine months to get the infrastructure in to have pad-ready sites to market to interested businesses and industries.

“This is a really big project,” NEDC Executive Director Don Wood said.

The EDA grant and the business park’s first sale will offset the investment cost of the infrastructure.

One local company is looking to expand and move to the new industrial park. That business has looked at various sites, including Moore and Oklahoma City, Wood said.

“They have great plans for their company and the growth potential,” Wood said. “This company has 30 employees. They are keeping those, but they are just getting credit for the new jobs.”

The company will get a cost break on the land as an incentive for bringing new jobs to Norman. Those jobs will pay $50,000 or more per year, Wood said.

“It’s a health care-related industry and should generate five additional jobs per year,” he said. “That’s part of the test; they have to create at least 35 percent more jobs. This project is here to create jobs.”

There are penalties if the business does not meet its end of the bargain. Any investment risk is on the part of NEDC and would not fall on the city.

In other city business, the council unanimously approved zoning changes to allow the redevelopment of the Sooner Mobile Home Park into a multi-family residential area to include two restaurant sites and a grocery store, likely to be a Neighborhood Walmart.

Attorney Hal Ezzell representing the applicant said all multi-family projects do not serve the same demographic, and projects of this magnitude must go through an extensive vetting process to gain the lender support needed.

Ezzell said the grocery store is expected to generate $1.5 million in sales tax revenue for the city.

According to the U.S. Census Bureau, Norman has had a 4.2 percent increase in population since April 2010, beating state and national levels, Ezzell said.

The apartments will be marketed to the student population. The developer will provide financial support for residents currently in the mobile home park who will be displaced.

Council member Stephen Tyler Holman said he hopes the city and the university will work to make improvements along Constitution Street to support more bicycling and pedestrian traffic to the university from that area.

Joy Hampton

366-3544

jhampton@

normantranscript.com

 

Breaking news, severe weather alerts, AMBER alerts, sports scores from The Norman Transcript are available as text messages right to your phone or mobile device. You decide which type of alerts you want to receive. Find out more or to signup, click here.