CHICKASHA – After a contentious meeting at which city officials were criticized – Mayor Zach Grayson and City Manager Keith Johnson in particular – the City Council, in a split vote, narrowly approved an ordinance that adopted the “Gateway to Chickasha Economic Development Project Plan.”
Gateway to Chickasha is an economic development plan featuring two Tax Increment Finance districts that would encompass much of the downtown business district and most of the U.S. 62 corridor leading into town from the H.E. Bailey Turnpike.
The project would consist of two “development components.”
• Tax Increment District “A” would encompass downtown Chickasha. The proposed “Downtown Chickasha Project” would encompass approximately 300 properties,” said attorney Nathan Ellis of the Public Finance Law Group, of Oklahoma City According to the Public Finance Law Group, District A would include 179,030 square feet of retail, restaurant and service industry space; 205,500 square feet of office space; and approximately 75 units of hotel space with average occupancy rates of $170 per night, with a 50% occupancy factor.
• Tax Increment District “B” would be the Highway 62 Corridor. It would focus on development of property east of downtown, along U.S. Highway 62 extending to the turnpike interchange. That project would encompass properties along the north and south sides of the highway, with the exception of the Grady County Fairgrounds and tribal property at the southeastern corner of the targeted area, Ellis said.
District B would include approximately 200,000 square feet of retail and service industry space, and 41,500 square feet of office space.
A TIF is designed to “incentivize” capital investment in undeveloped or underdeveloped property to enhance the tax base and increase employment opportunities within the municipality. “A lot of the purpose of a TIF is to create a coordinated effort of development, said Nathan Ellis of the Public Finance Law Group, in Oklahoma City.
When redevelopment occurs, property values go up and so do ad valorem tax receipts, sales taxes and hotel/motel taxes. When that happens, the tax receipts are split into two streams.
The first tax stream, tied to the original property value before redevelopment – the “baseline value” established by the county assessor – continues to go where it always went: schools, roads, parks, sanitation, fire and police departments, etc. The additional ad valorem taxes tied to the increase in property values – the so-called “tax increment” – are used to fund eligible project costs. Those can include land acquisition, infrastructure, parking, financing and assistance in development finance.
Major landowners ‘were not consulted’ George Thomas asserted that the Lowe and Thomas families own “80% of the area” encompassed in TIF District B, the Highway 62 Corridor, but “were not consulted” about “potential development plans” that might “include our land.”
That, he complained, was “rude and insulting.” Furthermore, “This scheme is not a good fit for us” and “certainly does not build trust.”
The council was informed that the Lowe family lost some of their land when the state exercised eminent domain for construction of the H.E. Bailey Turnpike “which cut the family farm in half,” and then some more of their land was seized for turnpike access ramps.
“The trust isn’t there,” Councilman Brian Gerdes said, “because of the property that was taken previously.”
The Gateway to Chickasha project “doesn’t lead to eminent domain,” Councilwoman Erica Alexander replied.
Thomas recalled when the town of Ninnekah planned to “annex up to Chickasha’s then-existing southwest city limits.” At the request of Chickasha’s then-city manager, “we agreed” in 2001 to voluntary annexation of a 330-foot strip along the south and west sides of our ranch” in order to “block Ninnekah’s ambitions to enter Chickasha’s back yard.”
Thomas asked the council to “return the favor by granting” the request of himself and his wife and Bud Lowe to have their property “deleted from the Gateway TIF plan.”
Public notice provided by newspaper, radio, and City Hall website Bertha Thomas said the state statute that created the Local Development Act requires “maximum effort be made to allow full public knowledge and participation in the local use of this act.”
Mrs. Thomas stated, “The city manager and attorney Nathan Ellis actually said, ‘We are not required to notify landowners.’” City Manager Keith Johnson responded, “We gave public notice but did not contact every individual property owner” in the two affected TIF districts.
• Legal notices announced special sessions of the Tax Increment District Review Committee on June 12, 2023, and on Jan. 24, 2024, and minutes of those meetings were prepared.
• The Chickasha Planning Commission held a public meeting July 9, 2024, at which they endorsed a resolution recommending the City Council approve the Gateway to Chickasha project development plan.
• A legal notice “regarding the adoption of Tax Increment Districts A and B: Gateway to Chickasha Economic Development Project,” was published in the local newspaper on July 18, 2024, paid for by the City of Chickasha. That notice contained a list of each and every parcel of property that would be encompassed in the two TIF districts, and the legal description of each of those properties.
• Public notices of the meetings of the Review Committee and the city Planning Commission discussions about the TIFs were broadcast on local radio station KOOL 105.5 FM.
The city’s website includes a hyperlink to the draft of the Project Plan and can be viewed in the City Clerk’s office in City Hall.
TIF eked by on 5-4 vote “Just consider a few facts,” said Jim Cowan, president of the Chickasha Economic Development Council.
“I believe a TIF is an important tool for economic development,” he said. “It provides a way to attract matching state funds. It does not raise or lower tax rates. It doesn’t force or require a property owner to develop if they don’t want to; it’s just an option. It doesn’t place on individual property owners any restrictions. It doesn’t obligate the city to spend any money; the City Council makes the decisions.”
Councilman Kelly Boyd asked why the Lowe and Thomas properties were not excluded from the TIF after they announced they didn’t want to be included. “It seems like arrogant overreach on our part,” he said. “I think we should honor their request.”
“The process does not encumber individual property owners,” Johnson said.
Landowners in a TIF district “are not obligated” to do anything with their property,” echoed Councilwoman Georgianne Hebblethwaite.
“Nothing is concrete yet,” Mayor Zach Grayson said. “This is a tool in Chickasha’s economic development toolbox.”
“We’re not trying to be Oklahoma City or Norman,” Hebblethwaite said. “A TIF would provide us with some funds to finance capital improvements.”
The City Council has 10 years to decide whether to commence either, both, or neither of the proposed TIF districts. That clock started ticking on Sept. 3, 2024.
There was some speculation that a TIF district could continue indefinitely. Nothing in state statutes nor the Chickasha Project Plan indicates that.
If activated, a TIF district will exist for no longer than 25 years from its commencement date, the Project Plan stipulates. An exception is this: if any portion of the principal or interest on any TIF bonds issued in the Gateway to Chickasha project remain unpaid “as of the expiration date,” the TIF district “shall not terminate” until the debt is retired even if that is “subsequent to the expiration date.”
The City Council was as divided as the audience; the TIF proposal eked by on a 5-4 vote.
NO: Boyd, Gerdes, and Councilmen John Smith and Charlie Burruss.
YES: Hebblethwaite, Alexander, Councilwoman Kea Ginn, Grayson, and Councilman Oscar Nelson. Afterward, Grayson quickly apologized to Nelson for leaving him to cast the deciding vote. “I thought you had already voted,” the mayor explained.