CHICKASHA – The City Council will soon be asked to approve an ambitious “Gateway to Chickasha” tax increment finance district 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 Planning Commission voted July 9 to recommend the plan to the council. The vote by Chairman Mike Mosley and Commissioners Nita Ladd, Brooklyn White, and Eric Anderson was unanimous.
The project would be comprised of two “development components.”
• The first would be downtown Chickasha. “The city has identified potential development interests that propose various redevelopment projects within downtown Chickasha, including but not limited to mixed-use commercial, retail, and residential projects, hotel, restaurants, and other attractions,” according to a draft project plan prepared by the Public Finance Law Group.
The proposed “Downtown Chickasha Project” would encompass approximately 300 properties,” said attorney Nathan Ellis of the Public Finance Law Group, of Oklahoma City. An increment area must be “carefully developed to make sure it includes properties that are projected to increase in value,” he said.
• The secondary component would focus on development of property east of downtown, along U.S. Highway 62 extending to the turnpike interchange. The proposed “Highway 62 Corridor Project” would create a “destination retail development serving the citizens of Chickasha and surrounding communities alike,” according to the economic development plan. 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.
The two components would not necessarily be operated in tandem, Ellis said. “They might run at different times,” Ellis said.
TIF ‘incentivizes’ capital investment A TIF is an economic development tool to “incentivize” capital investment in undeveloped or underdeveloped property to enhance the tax base and increase employment opportunities within the municipality, Ellis related. “A lot of the purpose of a TIF is to create a coordinated effort of development.”
In a TIF, a municipality designates a geographic area to be redeveloped. When the 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.
Total incremental revenues from the proposed dual-component TIF project are estimated at $35.59 million, Ellis said. That would include increased property taxes, higher sales and use tax receipts, and additional revenues from the city’s 8% hotel tax.
Costly improvements would be necessary City officials “recognize the difficulty in development” of the entire proposed redevelopment area “due to significant infrastructure and utility improvements necessary to support the entirety of the project area,” the development plan acknowledges.
“We have some infrastructure deficiencies we’re trying to address,” City Manager Keith Johnson told the Planning Commission.
The city has identified “an aggregate total of $581.6 million in costs associated with the infrastructure improvements and economic incentives,” the TIF development plan states. That includes an estimated $551.6 million in infrastructure improvements and incentive costs of $30 million.
Infrastructure improvements would include $154 million in upgrades of the water system, $141 million in repairs to the sanitary sewer system, $131 million for street and bridge repairs, $33 million in improvements to the storm water drainage system, and approximately $90 million for contingencies.
Those project costs would be incurred in phases “in coordination with specific development projects,” the draft plan states.
“We are not committed to all of this plan,” Community Development Director Rachel Bernish told the Planning Commission.
The City of Chickasha cannot finance expenditures of that magnitude with existing revenues, city officials acknowledged.
To accomplish the TIF proposal, “We’ve got to get creative,” City Manager Keith Johnson told Southwest Ledger. “We can pursue grants, there’s federal infrastructure money, and the national election in November could have some effect on this plan.”
The proposed tax increment finance district would extend over a maximum period of 25 years, Ellis said. During that time it would incur an estimated $650,000 in expenses: approximately $150,000 in organizational expenses and $500,000 in administrative costs over the life of the project.
2 public hearings would be required The next step is two public hearings on the “Gateway to Chickasha” TIF proposal. Tentatively the schedule for those is the Aug. 5 and Aug. 19 City Council meetings, and the council would consider adoption of the requisite TIF ordinances on Sept. 3.
The public hearings may be contentious.
For example, during a City Council meeting last September, Councilman Kelly Boyd asserted that a TIF is merely “financial and tax gadgetry.”
And during a meeting in May 2023, resident Torry Wise told the City Council, “We don’t need another TIF district. We’ve given the Chickasha Industrial Authority two tools to use for economic development. One is a sales tax and the other is the hotel/ motel tax.”
Chickasha’s 2005 TIF ‘moderately successful’ Chickasha’s first TIF was created in 2005 and ended in 2020. It extended “from Tractor Supply Co. on East Grand Avenue to the area across South Fourth Street behind the Jiffy Lube, where Chick-fil-A and Scooters on South Fifth Street are located today,” Bernish said. “We have many businesses in place because of the TIF district. Not every lot was sold or tenant space filled, but we have many flourishing, successful businesses for our community and citizens.”
The 2005 TIF was “moderately successful,” said Steve LaForge of Chickasha, a real estate investor.
“Initial hopes were that we would get a Home Depot or a Lowe’s. A few local businesses objected and delayed full implementation of the TIF for several years, and lawsuits were filed to stop the TIF.
“By the time the dust settled, the 2007 recession was in full stride. Home Depot and Lowe’s were not building any stores anywhere in the country. Walgreens, Interurban, Tractor Supply, Dollar General, the Cotton Patch building and the Tropical Smoothie building did get built as part of the 2005 TIF. Chick-fil-A, Starbucks, Scooters, Burger King and Quick Lube were all built on TIF-developed land but after the TIF had expired.
“I consider the 2005 TIF to be a success but not the home run we had hoped for,” LaForge said.
Creating another TIF has been discussed for several months The subject of whether to establish another TIF “has been studied for some time by the City Council,” Ellis informed the Planning Commission. “We’ve been talking about this since March or April” of 2023, former Mayor Chris Mosley told the Ledger after a City Council meeting last October.
The council took the first steps toward creation of one or more TIF districts on Oct. 30, 2023, when they established a review committee and authorized a contract with the Public Finance Law Group to provide city officials with legal guidance while considering whether to establish another TIF.
The Review Committee was comprised of 10 members, including representatives of six entities which receive tax revenue that’s collected in Chickasha.
The committee included a city councilmember and representatives of the Planning Commission, Grady County, the Grady County Health Department, Chickasha Independent School District, Canadian Valley Technology Center, the Grady County Emergency Management Service District, and three individuals from “the public at-large,” one of whom represented “the business community” in Chickasha.
In addition to the work provided on the proposed TIF district by the Public Finance Law Group, the Chickasha Industrial Authority inked an agreement last year with COalign Group of Oklahoma City to provide consulting services on creation of a TIF.
The Public Finance Law Group’s attorneys include Allan A. Brooks III, a bond counselor who provided the Chickasha City Council with financial advice last year prior to the sales-tax vote on the new water treatment plant.