Norman Arena TIF Will Harm School and City Budgets

Many promoters of the University North Park Arena TIF project have tried to argue that there is no harm to the schools because the TIF district is not generating tax revenue today.  This, of course, misses the crucial question: would that area generate tax revenue without the TIF?

In the case of the proposed new Arena TIF Increment district is shared by TIF #4 (sales tax) and TIF #5 (property tax). The increment district is the area where taxes collected are used to pay for project costs. 

There is no credible reason that spending up to $600 million for an arena project is necessary for growth to happen in the TIF district.   

Is it realistic to think that nothing at all would happen in the University North Park area over the next 20 or 25 years without an arena?  This claim is ridiculous. 

The Young Family Athletic Center is already drawing tournaments and a lot of activity.  Nearby restaurants have noted the uptick in business. The properties surrounding the YFAC are site ready and already for sale. These sites are probably the most valuable land in Norman today. 

The figure below shows the YFAC and the current year's property taxes for the Surf Bar - just across the road from the YFAC. The School taxes for the current year are a little under $11,000. 

The lots with yellow X's are included in the tax increment district - from which tax revenue growth would be used to pay for the arena TIF costs.  If we multiply the property taxes paid by the Surf Bar by  10 or 11 for 20 to 25 years, we are talking real money that the school district won't get (even accounting for school air formula).

In addition, the sales taxes from these properties would not go the city general fund (3%) but instead be used for TIF project costs.  

These properties south of Rock Creek were in the original University North Park TIF district (TIF #2). The increment from TIF #2 was ended by a restated and amended project plan.  The logic behind TIF is that taxing jurisdictions give up revenues for a period of time and then get higher tax revenues after the costs are paid for. 

By putting this land from the original TIF #2 into the new TIF district, the City and Norman Schools are going to miss out on revenue growth that was tied to TIF #2.  The original TIF was a 60-40% split in advalorem tax revenues between the TIF project and the original taxing jurisdictions The proposed new TIF would be a 100% apportionment to the TIF. It is worse for the original taxing jurisdictions than the original one.

The bottom line is that the proposed UNP Arena TIF plan WILL take revenue growth from the City of Norman and Norman schools because there WOULD absolutely be some development in the area even if an arena is not built.