The ambitious “Gateway to Chickasha” project would comprise TIF 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 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 19-page 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.
According to the Public Finance Law Group, District A would include 179,030 square feet of retail, restaurant and service industry space having annual retail sales of $36 million; 205,500 square feet of office space with an estimated $23.25 million project investment; and approximately 75 units of hotel space with average occupancy rates of $170 per night, with a 50% occupancy factor, generating $2.3 million in annual taxable sales.
• 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. 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.
District B would include approximately 200,000 square feet of retail and service industry space having $40 million in annual retail sales, and 41,500 square feet of office space with an estimated $4.15 million in project investment. TIF explained 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.”
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 socalled “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 Chickasha’s 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.
Formation of the two proposed TIFs should result in no net loss to the City of Chickasha in sales and use tax revenues nor hotel/motel tax collections, the Project Plan states, because those tax receipts “will continue to accrue to the City.” Project costs “It is expected that project costs” would be paid from proceeds of TIF bonds, the Project Plan states. The principal and interest payments on those bonds would be made “from available TIF revenues.”
Additional TIF revenues “may be realized through state matching incentive payments,” the Project Plan states. State payments of perhaps $30 million could be made to offset project costs, “although … only a portion of the taxable transactions may qualify for state matching incentive payments.”
It is estimated that the time frame for incurring most of the project costs “will be within 10 to 12 y ears from the date of approval” of the project plan. However, “certain project costs will not be incurred until appropriate development projects within the increment district are identified” by the city. “It is anticipated that most project costs will be paid from proceeds of TIF bonds,” but certain costs “may be directly paid or reimbursed from apportioned TIF revenues,” the project plan states.
5 taxing jurisdictions would be affected Ad valorem taxing jurisdictions that would be affected by the “Gateway to Chickasha” proposal would include Grady County, the Grady County Health Department, Chickasha Public School District, Canadian Valley Technology Center, and Grady County Emergency Management Service.