Referendum to put the Arena TIF plan to a vote

This article has information about the petition process. 
Norman residents want public vote on arena and entertainment district (newsbreak.com)

Once filed, petitioners will have 30 days to collect signatures.
6200 signatures are needed to put the project plan ordinance to a public vote.
Signatures must be from registered voters who live in Norman.

A nonprofit has formed to organize the referendum petition.
See Oklahomans for Responsible Economic Development for more information (responsibleok.com)

About 40 people attended a training on how to collect signatures.
Women In Action for All Norman organized the training.
There will be a second training event on Tuesday, September 24th.

I will be at the training to answer questions about the Arena TIF plan, how it impacts the city and school budgets, and how it displaces activity from nontif businesses. 

 

Articles on how TIF works (and doesn't work)

 Does Tax Increment Financing Really Work? Usually, No. - Bloomberg

Your Questions Answered: Is TIF Always Bad? (strongtowns.org)

Trouble with UNP Arena TIF: Slides explaining how TIF hurts City Budget

 

OU Foundation owns most of the proposed UNP Arena TIF district

 

It is always good to check the facts when developers bring projects forward asking for large amounts of public tax spending. 

The City of Norman has brought in the Center for Economic Development Law and also CoAlign to "run" the TIF numbers. O'Connor from CoAlign gave the city's presentation at the first public hearing for the proposed Arena TIF project in the north half of the University North Park. 

 O'Connor tried hard to make it seem like the difference between the City's independent analysis by HVS and Hunden was how much Land OU controls.  HVS was hired by the Center for Economic Development Law to do economic impact analysis of the project. The performed estimates for a project that was significantly smaller than the original ones provided by OU Foundation and Rainier Partners done by Hunden Partners. 

FACT CHECKING SHOWS THAT OU FOUNDATION OWNS MOST OF THE LAND

The bulk of the project spending would be for an arena and parking structure in the "improvement area" outlined in yellow. This is ALL owned by OU Foundation. 

OU Foundation controls 159 acres if the data at the assessor's office is correct.

Of the land in the larger project area, the stuff outlined in red is already set to pop.

Southwest Wire has an industrial site and has stated it does not want to be included in the TIF district.

What about the remaining lots that might be developed in connection with the arena?

Norman Economic Development Coalition and Moore-Norman Vo-Tech are the primary land owners of the "larger" project area

The taxes paid in the larger increment district will be used to funnel public spending on OU Foundation land.  OU Foundation and OU don't even pay property taxes making it interesting that they want to grab taxes paid by other businesses. 

If you think of it this way, it is a shell game - where do the tax dollars flow?  From one budget to another.  

UNP TIF #2 Oversight Board REJECTS arena TIF district

 

At the June 18, 2024 meeting, the UNP TIF #2 Oversight Board voted 3- 2 to reject the Rock Creek Entertainment Tax Increment Finance District Project Plan Ordinance. You can find the meeting minutes here: Minutes.

Voting against were Dr. Greg Burge, Attorney Rob Norman, and local builder William "Bill" Wilson. 

Dr. Burge is the Oversight Board Chair and the Economics Department Chair at the University of Oklahoma. Dr. Burge is a nationally recognized expert in housing, public finance (impact fees), and real estate economics. https://sites.create.ou.edu/gregburge1978/curriculum-vitae/

Robert Norman who was a leading advocate for Norman Forward Quality of Life special purpose sales tax program. Attorney Norman has a high level of understanding of legal aspects of development agreements as well as displacement effects which result when you bring new stuff in one area of town causing consumer spending to shift from other areas of town. 

William "Bill" Wilson was first appointed to the board in 2015 and is the longest serving member. He has observed the challenges of holding UNP developers/OU Foundation accountable for completing promised development. Mr. Wilson has developed projects in Norman, including a building in downtown Norman.

Voting in favor of the plan were banker Kurt Lee and accountant Kamie Kellis. Mayor Heikkila appointed both in 2022.  

The overriding concerns of the majority of the Committee, included

(1) The amount of future City sales tax and multi-jurisdictional property tax revenue that would be pledged toward the project for up to 25 years; 

The sales tax pledge is $151 million and the property tax pledge is $389 million.  These tax revenues won't go to original taxing jurisdictions. 

(2) the inclusion of properties in University North Park that lie outside of the proposed Entertainment District within the tax increment area;

The increment district includes properties south of Rock Creek Road which were in the original UNP TIF #2 increment district.  These were part of that original project which has spent about $74 million in tax dollars for project costs. 

(3)  The potential negative impact on Norman businesses and the City's General Fund and Capital Sales Tax Fund through "cannibalization" and diversion of customers from areas of the City outside of the Entertainment District to businesses in the Entertainment District.

The shifting of customer spending from outside the TIF to TIF stores negatively impacts the city general fund.  Estimates of these impacts have not been clearly spelled out in the Hunden Partners study which informed the project plan.  The recent HVS study provides estimates which can be used to evaluate the annual impact on the city general fund.  The Statutory Review Committee and the Oversight Board did not have such analysis when they were asked to evaluate the plan.

(4) Who will own and operate the proposed arena and parking garage? 

Mr. Francisco mentioned that this has not been decided. There have been discussions about some sort of city-county authority. The City has no plans to be the owner/operator.  

UNP TIF #2 Oversight Board Meeting clarifies Issues with Development Agreement

The minutes of the University North Park TIF (#2) Oversight board meeting held on July 16, 2024 spell out problems with the arena TIF development agreement. UNP TIF #2 Oversight Board Minutes

The Economic Development Agreement does not define project or commit developer to completing minimal development beyond an arena.

Comments by City Finance Director, Anthony Francisco:

“Before the recommendation will go before Council formally, we want to have an Economic Development Agreement that basically puts meat on the bones if you will, that makes all the contractual parties bound for what is in that Project Plan,” Francisco said. The Economic Development Agreement has been in negotiations for several months. There have been what Francisco describes as the following “sticking points” which have been communicated by City Council and the City Attorney’s Office to the developers and the developer’s counsel:

1. There needs to be an obligation to do a specific and defined project;

2. The project needs to name a specific party that is the main developer;

3. The developer’s counsel proposed changes to the draft Economic Development Agreement that makes the TIF revenue payments to the developer dependent only on construction of the Arena and not the entire District, leading to default concerns. "



Access to I-35 is not under design. 

The proposed East-west Access Oklahoma Turnpike put a stop to the design of the interchange which would serve the arena entertainment district. 

City interim public works director Scott Sturtz commented:

“There is a big circle on the map that basically says that ‘this (Rock Creek and I-35 intersection) needs further study.’ They did not get far enough along to make recommendations,” Sturtz said. “Again, this is all preliminary. They are pretty good concepts, they’re laid out pretty well, but I wouldn’t say there’s anything that’s definite at this point.”

TIF Project Plan does not detail developers' obligations to build anything

The first of two public hearings for the proposed Arena entertainment district in northwest Norman is scheduled for September 3.  Incredibly, the actual project details beyond an arena and parking structure have not been clearly defined.  The ask is for up to $600 MILLION tax expenditure to repay the financing costs of $230 MILLION for the arena and public infrastructure.

What will City taxpayers get for that huge 25-year spending project?

The TIF Project plan details taxpayer legal obligations via establishing the TIF increment district, and the diversion of tax revenues collected in the increment district to the TIF fund for authorized TIF projects (up to $600 MILLION).

What is included in the development? The Arena project plan gives only the vaguest of details about what is planned.

"The project includes the development of a multi-purpose arena to be used by the University Oklahoma basketball and gymnastics teams and the venue for high school and other sports activities as well as concerts and other performances. The development also includes commercial, and retail uses with restaurants and bars and a public festival plaza street, a public parking garage, as we as over 1000 residential units."   https://www.normanok.gov/sites/default/files/documents/2024-08/project_plan_entertainment_district.pdf

What are the Texas developers, OU Foundation, and OU legally required to do to get the $600 Million in financial assistance?

The developer obligations are established in the Economic Development Agreement? The EDA has not been released to the public presumably because it is still being negotiated. 

Will OU be locked into a 25-year lease??

Will the Texas Developer be locked into building at least 750 apartment units? What if only 500 get built, will the arena costs still be covered?  

Will OU be locked into providing some up front $ to cover part of the $330 million arena+parking costs? 

Will OU Foundation be on the hook for part of the costs?

What is the minimum retail needed to get repayment of the arena costs?  The Hunden partner's analysis projected 240,000 square feet of retail/restaurants but the lastest city-funded analysis by HVS only projected 120,000 square feet.  

Who will OWN the arena?  Private? Public? If public when will "the public" get the deed? 

Who will borrow the money to build the arena?

The bottom line is that the project plan sets out taxpayer costs/payments but NOT developer commitments.  

You wouldn't agree to house mortgage without knowing what house you are buying. This is a similar situation, folks  

Also notice the 3-2 NO vote by the UNP TIF oversight Board does not seem to be included with the agenda or project plan documents.  Oversight? Intentional?  

Don't Yum Center my Norman! 
The Yum! Center provides a useful cautionary tale about how mega projects centered around university sports can fail.   Getting STIF[ed]