CHICKASHA — A tax increment financing district downtown is being mulled over, “but the boundaries have not been determined,” Jim Cowan, director of the Chickasha Economic Development Council, told Southwest Ledger last week.
In a TIF, a municipality designates a small geographic area to be redeveloped, often but not always at the request of a corporation or a developer. When the redevelopment occurs, property values go up and therefore ad valorem taxes will be higher. When that happens, the property tax is split into two streams.
The first tax stream, tied to the original property value before redevelopment — the so-called “base value” — continues to go where it always went: schools, roads, parks, sanitation, fire and police departments, etc. But the additional ad valorem taxes tied to the increase in property values — the so-called “tax increment” — are diverted elsewhere.
One option under consideration is a TIF district in the “Old Town” area downtown where California businessman Chet Hitt is progressing on his previously announced plans to invest up to $5 million in multiple development and redevelopment projects.
In a TIF such as that, perhaps the extra tax revenue could be used to finance at least some of the cost of building a proposed pedestrian bridge over the railroad tracks to connect “Old Town” Chickasha and the Grady County Fairgrounds.
Mayor Chris Mosley said an individual who wishes to remain anonymous for now has offered to donate funds for development of a miniature train and a playground in the new 8.5-acre downtown park where the iconic leg lamp statue is located.
Another proposal under consideration is construction of a hotel that would serve as a hospitality industry training center while providing temporary lodging for visitors to Chickasha and for people who participate in the myriad events held at the fairgrounds.
Or, Cowan said, maybe the surplus tax proceeds could be used to finance improvements to water lines downtown if Hitt follows through with his plans to build a distillery that would produce 500,000 to a million 750-milliliter bottles of whiskey, bourbon and vodka each year.
The Chickasha Industrial Authority inked an agreement in May with COalign Group of Oklahoma City to provide consulting services on creation of a TIF.
COalign founder Cathy O’Connor informed City Manager Keith Johnson that the TIF study would take three to four months to complete.
The evaluation includes meeting with the CIA, city officials and other stakeholders to collect information about the proposal; and developing information about the proposed TIF boundaries, valuation of property within that district and its potential for redevelopment, plus desires goals and outcomes for the TIF district.
Her fee is $30,000, one-third paid upfront and the balance due “upon completion of the work even if the City determines not to move forward with the TIF creation.”
O’Connor was founder and president of the Alliance for Economic Development of Oklahoma City for 10 years. She helped design the nonprofit corporation to coordinate public participation in economic development projects.
In a related matter, Mosley indicated he and some others are eyeing an “opportunity zone” north of Choctaw Avenue. Redevelopment projects in that area could be financed in part with tax credits such as those that were sold to help finance renovation of the formerly rundown Chickasha Hotel downtown, he said.
The U.S. Internal Revenue Service defines an opportunity zone as “an economic development tool that allows people to invest in distressed areas in the United States.” Their purpose is to spur economic growth and job creation and to revitalize distressed neighborhoods.