DUNCAN — A tax increment financing district near the intersection of Plato Road and U.S. Highway 81 in Duncan would benefit the community by bringing new businesses to town, said Nathan Ellis, an attorney with the Public Finance Law Group who is advising the city on the project.
“The impetus of this is to try and enhance the sales tax base of the city,” he said. “Try and create new retail opportunities, things that don’t already exist in Duncan.”
Ellis presented the city’s proposal for a TIF district Tuesday night to the Duncan City Council, which hosted the first of two public hearings on the project.
The council will not vote on whether to move forward with the project until after the second public hearing, set for June 9 in the council’s chambers.
Site development
City officials have proposed establishing a TIF district on the property north and east of the intersection of Plato and U.S. 81. The district would not include the First Bank Trust and Co. site on the northeast corner of the intersection.
The developer Acre Partners has approached the city about turning the property near Plato and U.S. 81 into a retail zone. That development would include a national grocery store chain and other retailers, which have not been named publicly.
But Acre Partners has identified several obstacles to developing the site, including drainage issues, Ellis said. Consequently, the developer has proposed an $18 million incentive to cover the costs of improving the site, which would be paid out of the tax revenues generated by the TIF district.
“That $18 million would go to offset some of the physical infrastructure and site development costs that are necessary in order to bring that project to fruition,” Ellis said. “Without that incentive, effectively, they would not be willing to move forward with the project.”
If a TIF district is established at that site, the city would capture 90% of the sales tax revenue and 50% of the property tax revenue from the district, Southwest Ledger reported earlier this month. Those dollars would be spent on district-related projects, such as public improvements.
The remaining 10% of sales tax revenue from the district would be allocated to the city and could be spent on items outlined in the city’s sales tax ordinance, the Ledger reported. The remaining 50% of property tax dollars from the district would be divided among the taxing jurisdictions affected by the project – Stephens County, the Stephens County Health Department, Duncan Public Schools and the Red River Technology Center.
The TIF district would continue for about 16½ years and is expected to generate about $24.5 million in tax revenues during that time. But the city could dissolve the district earlier if it generates at least $18.3 million in revenue – the amount of the developer’s incentive – before it reaches the 16½-year mark.
The balance of the $24.5 million – approximately $6 million – would be returned to the county and divided among the other taxing jurisdictions.
Participating in the TIF district
The council heard from Joshua Albert, a Duncan- based financial advisor who is planning to construct a 5,000-square-foot commercial building on property that will adjoin the proposed TIF district.
Albert said he would like to open discussions about whether that property would be included in the district.
“I would just love the opportunity to present for the opportunity to participate,” he said. “Because I believe I have a really good case to participate in it.”
Mayor Robert Armstrong said city officials will not determine which properties will be part of the TIF district until after the district is formed. He added that the council will discuss the issue again on June 9.
“So, we’ve got plenty of time to discuss and talk,” Armstrong said. “Obviously, you’ll need to submit your project site, your plans – all of the applicable stuff.”
The TIF plan was proposed to help bring a new grocery store and other potential retailers to Duncan, Community Development Director Nate Schacht said in a Wednesday email. However, he said, attorney Nathan Ellis’ calculations concerning how much tax revenue the TIF district would generate did not account for Albert’s project.
“That is why the City of Duncan has indicated that Mr. Albert’s property is not officially part of the proposed TIF district being used to recruit the grocery store and other commercial entities to the
Eric Swanson is an award-winning journalist with more than 20 years’ experience covering local government and criminal justice in Oklahoma, North Dakota and Kansas. He can be reached at eric.swanson@ swoknews.com.