A second public hearing on the “Gateway to Chickasha” economic development plan will be held Aug. 19 at City Hall, and the City Council is scheduled to vote on the proposal Sept. 3.
The proposed project was unveiled July 9 to the Chickasha Planning Commission, which voted unanimously to recommend it to the City Council. The details were presented to the council during its Aug. 5 meeting, a fourhour stemwinder.
The ambitious Gateway to Chickasha tax increment finance district 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 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, he said. “They might run at different times,” Ellis said.
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 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.
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.
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.
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.