Norman Oversight Committee rejects Arena TIF Project Plan

The University North Park TIF #2 oversight committee met on June 18, 2024. Six members were present representing a quorum.  The committee discussed the proposed Rock Creek Entertainment District Tax Increment Finance Plan which would create two new TIF districts to pay for the costs of an arena + parking structure + district infrastructure. 

The project costs are estimated to be $230 million with up to an additional $370 million in financing costs.

The TIF structure is unusual for two reasons. First, the Texas developer, Rainer, LLC would take out a loan and the City would commit to paying off the principal plus interest costs. Second, 100% of the sales and advalorem taxes collected in the increment district would be used to pay off the debt. TIF usually split revenue growth in an increment district so that taxing jurisdictions share in the growth for the entire life of the project.  

Here is a summary of some of the key points: 

1. The committee approved the PUD and rezoning that went through the planning commission last week. The general sense was that this was an issue for the planning commission and that the Tax Increment Finance plan was what the TIF committee should focus on.

2. The committee rejected approving the Rock Creek Entertainment TIF project plan by a vote of 3 no to 2 yeahs with one abstention by the soon-to-be-new CFO of Norman Schools. Notably, the NPS Superintendent votes yes to the exact same plan at the statutory review committee last month. The superintendent had commented that his vote did not represent the opinion of the school board which had not discussed the matter yet. The school board did discuss the plan at their June meeting and expressed concerns about the impact on the school budget. The four members who were present 3. City council approved putting the arena TIF project plan to a public vote last week. The ballot language has been submitted to the county election board for an August 27th vote. There have been no lawsuits challenging that action to dates according to city attorney Walker. 4. Committee members asked for analysis of how including the lots south of Rock Creek by the Young Family Athletic Center and the industrial lots at the far north of the district would impact the project financing. These are not related to the arena or new housing development. Such estimates have not been done. City Finance Director Anthony Francisco estimated that 5 lots of fast food might generate about $250,000 in general fund sales tax revenues. There are approximately 12 lots in the south area. 5. Committee members pointed out how cannibalization is not just moving businesses but also moving where people shop and spend their entertainment dollars. This sort of shifting means less tax revenues would accrue to city, county and schools from outside the TIF leaving less money for public services - police, fire, public works, etc. 6. TIF consultant pointed out that if all the possible yet to be developed sites are not included, the project won't make. Committee member pointed out that the committee is supposed to look beyond whether the financing works but also at how the city as a whole is impacted. You can find the agenda packet here Development Oversight Committee for TIF District No. 2 Meeting-AMENDED | City of Norman Oklahoma Meetings (municodemeetings.com)