What we know and don't know about the proposed Arena TIF

Norman Development has posted a detailed discussion of the evolution of the proposed new arena and bar/restaurant strip in northwest Norman north of Robinson and south of Tecumseh along I 35 (aka the University North Park district). -  https://www.facebook.com/share/p/vSM78CRVY8CFicE9/. 

Who is TEAM NORMAN - The group of land owners and special interest (OU Foundation, Norman Economic Development Coalition which is funded in part by OU foundation, OU, OU Athletics) - to promote the arena plan. TEAM Norman is not a citizen led initiative. Note also that ALL the info and projections are based on the conceptual plan provided by OU Foundation and developers. There is NO certainty that all the housing and bars and shops will get built as planned. We don't know how much OU will contribute to the arena construction costs or who would own the facility once built. The only discussion of the impacts of diverting tax revenues from original taxing jurisdictions - city, county and schools, was done at a school board meeting. At that meeting the CFO said there was too much uncertainty to know the impact on the school budget. However, it is possible to back end out just how much the schools give up during the tax diversion period.

Now on to Norman Development's article:

Norman’s Planning Commission will finally hear rezoning and Tax Increment Financing (TIF) Project Plan details for the proposed Rock Creek Entertainment District proposal next week, following five postponements.

The plan has been much anticipated since Team Norman first announced the plan September 6, 2023. At that time the $1 Billion plan was expected to be 20% funded through public investment.

Though the Project Plan and rezoning requests are two separate items, and appear as such on the Planning Commission’s agenda, the two items are inherently intertwined and one will likely not exist without the other.

Prior to review by Planning Commission, the plan was reviewed by the Statutory Review Committee composed of a representative from the City of Norman and the Norman Planning Commission; a representative from each of the affected taxing jurisdictions: Cleveland County, Norman Public Schools, Cleveland County Health Department, Pioneer Library System, and Moore Norman Technology Center; and 3 At-Large members.

The Committee was created by resolution of the City Council in November 2023 and held their first meeting April 5, 2024. The group met on April 25th, May 13th and May 16th before approving the plan at their May 23, 2024 meeting.

𝐓𝐡𝐞 𝐑𝐞𝐳𝐨𝐧𝐢𝐧𝐠 𝐑𝐞𝐪𝐮𝐞𝐬𝐭

New site plans to be presented to Planning Commission are similar to those first obtained by Norman Development in November 2023 with some modifications. Both are almost identical to plans proposed by the University of Oklahoma Foundation in 2018 that Team Norman calls “vaguely similar.”

The 90-acre site is broken up into 3 development areas: urban residential, high density residential, and commercial.

An extension of Radius Way midway through the site divides the residential areas from the arena and associated commercial developments.

The urban residential has shrunk from 96 lots to 37 lots tucked to the north west corner of the site. Typical lots are 40 feet wide and span 3,000 square feet. The neighborhood has OU-themed streets: Crimson Lane, Cream Terrace, Cream Circle, and Live On Lane.

A portion of the single family residential lots from the November plan have been reallocated to multi-family development.

According to the Hunden Partners Market Demand, Financial Feasibility & Impact Report, it is projected that 14% of residents in the Entertainment District will be new to Cleveland County,

Over 750 apartments and 24 townhomes are spread across 5 platted lots spanning over 25 acres of the site.

The site plan south of Radius Way has remained untouched from the November plan. The 7,000-9,000 capacity arena is surrounded by commercial, office, hotel, and conference center buildings to the north and east with a parking garage and surface lots to the northwest and south.

The Rainer Companies, who purchased a large majority of University Town Center in 2019 for $63 Million, are a part of the development team for the Entertainment District.

Developers anticipate the retail component of the Entertainment District to be small scale shops, restaurants, and entertainment focused businesses rather than large big-box stores found in the developments south of Rock Creek Road.

The Hunden Partners report stated 17% of retail anticipated will be new to Cleveland County.

A phased approach will be used in developing the project, with the arena and commercial developments in phase 1, multi-family housing in phase 2, and the single-family housing in the final phase.

𝐓𝐡𝐞 𝐏𝐫𝐨𝐣𝐞𝐜𝐭 𝐏𝐥𝐚𝐧, 𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐞𝐫’𝐬 𝐀𝐬𝐤

TIFs are used to capture and reinvest new tax dollars created in an increment district back into projects that benefit the TIF area as dictated by the Project Plan.

A TIF, TIF Number 2, was used in the development of University North Park south of Rock Creek Road beginning in 2006. TIF funds were used for the development of Legacy Park, roadway improvements around the UNP area, building the I-35 frontage road between Robinson and Tecumseh, among other projects.

TIF Number 2 has since ended though it is estimated that the developments a part of the TIF generate $13.4 Million in sales tax revenue annually, according to the 2024 Project Plan.

The objectives of the Rock Creek Entertainment District TIF Project Plan are “to retain or expand employment, to attract major investment in the area, and reverse economic stagnation; preserve and enhance the tax base and make possible investment, development, and economic growth that would otherwise be difficult without the Project and the apportionment of incremental tax revenues; [and] to stimulate private commitments to invest and reinvest in the area,” according to the Project Plan.

The project would be carried out by two TIF districts that would be formed. Both TIF Districts encompass the Project Area set in the Project Plan: a portion of the undeveloped land south of Rock Creek Road along with all undeveloped land north of Rock Creek Road.

First, TIF Number 4 would be a sales tax increment district and begin increment collection on May 1, 2025. The TIF would divert 100% of the sales tax collected in the increment district and is expected to generate $151 Million in incremental revenue.

Second, TIF Number 5 would be an ad valorem, or property, tax increment district and begin increment collection on December 31, 2026. The TIF would divert 100% of the ad valorem tax collected in the increment district and is expected to generate $151 Million in incremental revenue.

Entire project costs from both TIFs are limited to $600 Million, up from the original pitch of a $200 Million public investment. TIF increments are statutorily limited to 25 years.

According to the Project Plan, $190 Million of the increment would be used for the construction of the arena and parking garage. An additional $40 Million would be used towards public infrastructure to support the arena and parking garage.

𝐓𝐚𝐱𝐢𝐧𝐠 𝐣𝐮𝐫𝐢𝐬𝐝𝐢𝐜𝐭𝐢𝐨𝐧𝐬 𝐜𝐨𝐮𝐥𝐝 𝐬𝐞𝐞 𝐢𝐧𝐜𝐫𝐞𝐚𝐬𝐞

Once the entire build out is complete, and after the increment has ended, the area is projected to generate an additional $30 Million in annual tax revenue.

Of that increase, Norman Public Schools could see $7.9 Million annually; Moore Norman Technology Center, $2.9 Million annually; Pioneer Library System, $1.1 Million annually; Cleveland County, $1.9 Million annually; Cleveland County Health Department, $495,000 annually.

In addition, the City of Norman could see benefit of over $32 Million in sales taxes outside of increment. This are projected to include $23 Million for the Public Safety Sales Tax Fund, $8 Million in hotel room taxes, $5.8 Million to City of Norman’s Public Transit Fund, and $3.3 Million for Norman Forward.

𝐂𝐨𝐮𝐧𝐜𝐢𝐥 𝐚𝐧𝐝 𝐂𝐢𝐭𝐢𝐳𝐞𝐧 𝐂𝐨𝐧𝐜𝐞𝐫𝐧𝐬

While the Project Plan has been working its way through City processes, public perception of the project remains mixed.

Some feel the project could be a once-in-a-lifetime opportunity for the city, while others feel the project is not a good financial investment for the city.

Talks circulated in 2018, and have come up again with the 2024 version of the plan, regarding putting the issue to a vote of the people.

Three City Councillors invoked a rarely-used “Rule of 3” to require the City Manager to place an item on an agenda when requested.

Councilmembers Lauren Schueler (Ward 2), Michael Nash (Ward 5), and Elizabeth Foreman (Ward 6) made the request on May 29, 2024.

The request of the Councilmembers is to hold a special election on August 27, 2024 for residents of Norman to vote on the proposed TIFs 4 and 5. The item will be heard at Council’s Tuesday evening meeting.

Due to the requirements in the Local Development Act, the state statute that governs TIF Creations, the vote would only be advisory and the ultimate decision to approve or deny the TIFs would still rest upon Council.

“After discussing the potential legal issues with an ‘advisory’ special election with Councilmember Schueler, the request was changed to a resolution directing the City Manager to hire a qualified firm [...] to conduct a scientific survey of the community as a way to gauge community knowledge and sentiment on the proposed project and tax increment financing as a funding mechanism for the public contributions to the project,” the staff report for the item read.

This second item would consider approving an allocation of $15,000 to conduct the public engagement survey. Both the citizen vote and engagement survey items appeared on the agenda as of Friday June 7th.

If the question of TIF approval should not go to vote, the earliest Council could hear the Project Plan is at their July 23, 2024 meeting.

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