Tax Increment Finance is a popular tool used to pay for public (and private) assets. Oklahoma City has had over a dozen TIF projects. Yet OKC did not use TIF to build a new NBA arena. They asked taxpayers to approve a 1% designated sales tax.
Norman has had 3 TIF projects so far,
TIF #1 was a small TIF for campus corner infrastructure upgrades.
TIF #2 - the infamous University North Park project which yielded a power retail strip anchored by Target but no promised "lifestyle Center".TIF #2 split the growth in tax revenues in the increment district - 60% of sales taxes and 50% of the property taxes were diverted to TIF projects.
TIF #3 diverts 90% of property taxes collected in the increment area for upgrades need to replace old infrastructure in central Norman.
The proposed new TIFs are unusual. They would collect tax revenues from the same increment district. TIF #4 would divert sales taxes and TIF #5 would divert property taxes collected in the TIF area. Both would divert 100% of the taxes collected in the increment district in contrast to most TIF projects which split the revenue growth. The contractual taxpayer obligation would be to spend up to $600,000,000 (that's 600 million) or however much is collected for 25 years.
The project costs include $230,000,000 for an arena, parking structure and district infrastructure. The financing costs bring up the price tag to $540,000,000 to $600,000,000.
Arena facilities, themselves are boondoggles - they don't generate enough revenues to pay for construction and finance costs over a 25 year lifespan.
No comments:
Post a Comment