Tax Increment Financing

Town Center ProjectMidwest City, OK

Pre Development

1970 Comprehensive Plan

1985 Comprehensive Plan

Midwest City Millennium Implementation Plan

Midwest City Downtown Redevelopment Plan

2004 Report on Area Conditions

Public Participation

Local & Regional Void For Commercial & Retail

I-40 Frontage with Multiple Access Points

Adjacent to Tinker

Limited Interstate Frontage

Eastern Oklahoma County as Market Area

90 Acre Development

240 Lots to Assemble the Property

Timing was Right

Major Project Aspects

3 Main Project Goals

Create a People Place -Downtown/Town Square

Improve the Image of Midwest City

Economic Development/New Retail Center

Design Guidelines

Process for Designers

Philosophy

Site Access and Traffic Flow

Utilities Layout

Site Lighting

Architectural & Landscape Design

Signage

Site Plan

Phase I - 329,400 sq ftPhase II - 96,150 sq ft

Phase III - 203,104 sq ft

Retail Total 629,000 sq ft

Plus 11 Outparcels

Town Center West

Existing Site Conditions Site Improvements

Funding7 Million in Tax Increment Financing (TIF)

27 Million Midwest City Hospital Authority for Land Acquisition

TCSP Highway Administration Funds

Numerous Smaller Grants

Partnership with Sooner Investment

RFQ & RFP Process

TIF – Project PlanAdopted August 2002

DESCRIPTION OF PROJECT

•Redevelopment & revitalization of original downtown•90 acres•Major commercial redevelopment•New private investment of $50,000,000•500 to 1000 jobs over 7 year implementation•Annual sales tax $1 to $2 million over 10 year period•Direct payroll $15,000,000

TIF – Project PlanAdopted August 2002

ELIGIBILITY OF PROJECT

•Project area is unproductive, underdeveloped and blighted•An area where investment, development and economic growth has not occurred•Area is and was blighted and detrimental to the public health, safety and welfare

TIF – Project PlanAdopted August 2002

OBJECTIVE OF INCREMENT DISTRICT

•Revitalize original downtown area•Promote economic development to increase sales tax revenues, raise property values, improve economic stability•Retain jobs and create new ones•Preserve and enhance tax base•Make possible development that otherwise would be difficult without apportionment of ad valorem taxes

TIF – Project PlanAdopted August 2002

FINANCIAL IMPACTS

•Proposed private redevelopment will generate tax increments necessary to pay authorized public costs of the project•Project does not create a measurable increase in demand for services or costs

TIF – Project PlanAdopted August 2002

STATEMENT OF PRINCIPAL ACTIONS

•Property acquisitions•Negotiation, preparation, execution and implementation of development and redevelopment agreements•Site preparation, planning and construction of public improvements•All other actions necessary and appropriate to carry out project

TIF – Project PlanAdopted August 2002

ESTABLISHMENT OF DISTRICT #1•Increment of ad valorem may be used to pay project costs for a period not to exceed 20 years•Increment is divided into 2 parts

Part A: that portion of the increment generated by values up to the equalized assessed value of all real property and all personal property in the district for the year 1999 which is deemed to be $1,458,062 shall be allocated to affected taxing entities

Part B: the balance of the increment generated within the increment district (the portion generated by values in excess of the 1999 value) shall be allocated to payment of project costs

TIF – Project PlanAdopted August 2002

ESTIMATED PROJECT COSTS•Category A:

• Demolition $ 1,500,000• Street Improvements $ 1,900,000• Park Improvements $ 200,000• Utility Improvements $ 1,500,000

•Category B:• Organizational, administrative

and professional services $ 300,000• Contingencies $ 550,000• Capitalized Interest $ 1,050,000

$ 7,000,000

TIF – Project PlanAdopted August 2002

FINANCING REVENUE SOURCES

•It is estimated that between $400,000 in the near and $900,000 over the longer term will be generated annually

TIF – Project PlanAdopted August 2002

ACTUAL RESULTS

•1999 Assessed valuation $ 1,458,062 (generated $107,769 in property tax)

•2011 Assessed valuation $10,326,826 (excludes value of land - $107,769 + $997,735 = $1,105,504 in property tax)

•TIF Note Payoff $7,000,000 - Borrowed from City Sewer Fund• 2007 $ 343,175• 2008 $ 568,106• 2009 $ 907,416• 2010 $ 1,110,557• 2011 $ 981,193• 2012 $ 1,007,703 (est.)

TIF – Project PlanAdopted August 2002

ACTUAL RESULTS – CONTINUED

•Sales tax generated from site:

Fiscal Year 2010-2011 $6,250,000

•Number of jobs created:

Estimated: 1000

Actual: 1150

Supreme Court Ruling – Condemnation under Local Development Act versus Urban Renewal Authority

• If you are going to condemn for economic development purposes, you have to use an Urban Renewal Authority.