ENID, Okla. – The city of Enid is once again trying to attract new wind energy businesses, using the popular method of covering development costs with newly created property tax revenues – a process that city officials began nearly two decades ago to eventually achieve mixed results.
The commissioners of the city of Enid have three weeks to consider giving the green light to two more proposals for regions to finance the increase in taxes (TIF) – extending the 10-year term of the current region and creating a new one for 14 years within of the same 6 squares. miles area in eastern Enid.
Under the proposed agreements, the city of Enid will spend a total of about $ 2.4 million on the reconstruction of both roads in the areas leading to the pair of wind farms.
The City of Enid will hold the first of two mandatory public hearings on the two TIF proposals on Tuesday during the regular meeting of the Enid City Commission, which begins at 6:30 p.m.
Nearly 100 jobs will be created by 2028 in the new TIF district № 9, designed to maintain a new wind farm near Tyson Foods, according to the city’s legal counsel for the TIF proposals.
The business proposals for both TIF regions fall under the same umbrella company, the renewable energy service provider Takkion.
“They stand as their own TIF areas, but they are connected in many ways,” company spokesman Greg Haub said during the committee’s first review meeting in April.
The new area will now encourage Takkion to build a facility to restore wind power components, said Lisa Powell, ERDA’s chief executive.
In 2020, Takkion acquired Transportation Partners and Logistics, which operates a wind power component storage warehouse in the existing TIF quarter № 7. The yard is located 66th north of US 412.
The new neighborhood will be located on South 54 of US 412, on the site of the former Chesterfield Cylinder property. Takkion will repurpose the building to rework the windshield and turbine components, as well as build a new 50,000-square-foot storage building, according to the city.
Powell said testing a specific 7-megawatt gearbox would be a new industry for Enid and Oklahoma and would be the only site of its kind in the United States.
“It could be a big advantage to have a place to recycle,” Powell said.
The property is valued at $ 3.4 million in 2022. New developments are expected to increase its value to $ 36 million by 2026, according to the county.
It is then estimated that the property will earn $ 5 million in additional ad valorem income for the 14-year term. More than $ 500,000 would go to Takkion as an incentive for a property inventory.
The city of Enid plans to spend about $ 1.3 million on the reconstruction of the 54th, and another $ 500,000 from the city would pay for a new truck with a fire escape.
Once the value of the property is revalued, the city will be reimbursed with the new dollars of property tax received over the next 14 years.
The remaining $ 2.56 million will go to other state taxpayers with representatives on the review committee – Garfield County, County Health Department, Autry Technology Center and Pioneer-Pleasant Vale Public Schools.
District 7, which will be renewed for another 10 years until 2036, will be Enid’s first TIF district to be extended after its original life.
Enid City Commissioners created the original TP&L neighborhood in 2016 so that the company could develop more than 80 acres as a storage site for wind components brought by rail to the wind industry. The district was to expire in 2026.
The initial agreement contributed $ 800,000 in ad valorem tax revenue to help the city of Enid rebuild 66th from US 412 to Willow, where the distribution yard was to be located.
Powell said TIF-7 was the solution to overcoming the state tax on personal inventory, which would otherwise encourage TP&L to develop a site in Garden City, Cannes.
The city now intends to extend this TIF, this time before the expected federal extension of tax credits for wind power, Powell said.
The city will then spend no more than $ 950,000 to be reimbursed from the new ad valorem tax revenue to expand improvements to the 66th after Willow, according to the resolution.
Once again, Takkion will now decide whether to relocate the new facility to Enid if the new area is approved, Powell said during the commission’s third public meeting on May 27th.
“I think the odds are in our favor,” Powell said.
Wyoming-based TP&L owns 24 acres of 304 S. 54th property from 2016, according to the Garfield County Assessor website.
TIF – what’s in a name?
The area for financing tax increases is a defined geographical boundary that a city or other public entity can create, which captures the increase in new tax revenues as a result of development.
The TIF area establishes an area in which increased ad valorem taxes, sales and accommodation taxes will be deferred for a certain period of time for other public entities. These funds will instead be used to cover the cost of public infrastructure, often to support the development of new business.
Ad valorem dollars fund public services such as local school districts and county operations. Meanwhile, the city of Enid is financed mainly by sales tax revenues.
None of the public entities represented on the current TIF Review Committee in the city has reported on the adverse financial impact expected from the two proposed TIF projects under the two TIF resolutions.
With the onset of development, properties are revalued and revalued to higher amounts in dollars, after which the related property taxes will also increase.
The TIF then captures not the pre-assessment basic ad valorem tax, but the increase in the lifetime resolution of the TIF area.
The city of Enid has three active TIF districts as of May 2022: the TP&L facility, Roosevelt Park Apartments at 9th and Park and the Archer Daniels Midland Milling flour mill at North 4th.
TIF Roosevelt, established in 2007, must expire 15 years after construction is completed; The apartments were opened in 2009. The ADM mill, established in 2017, has a mill until 2028.
“They are good tools that cities use, including the city of Enid,” Gilbert told TIF. “I’d say that’s probably quite common.”
Of the approximately 100 current TIF neighborhoods in Oklahoma, only the cities of Jenks, Claremore, Stillwater, Village and Haven have three or more working at the same time, according to a 2022 State Department of Commerce update released in May.
The TIF area makes the city more competitive for potential projects, said city manager Gerald Gilbert.
Once this developed business starts, Gilbert said, the projects have a “cumulative effect” on the city’s population.
“This business hires new people and these people get paid, and these people, if they don’t live in Enid anymore, come to Enid for that (and) spend their money here,” Gilbert said.
Almost all of Enid’s eight TIF districts are located in the easternmost part of the city, a homeless area with many manufacturing, processing and packaging companies.
As a result, most of these neighborhoods were aimed at stimulating new industrial and commercial enterprises for Enid, city officials said.
But half of the planned economic development projects did not materialize after the approval of the Enid City Commission – TIF neighborhoods for two ethanol plants and one rapeseed plant, as well as “de-maling” at Oakwood Mall.
“TIFs are great tools for us, but ultimately it’s up to the company or anyone in private development to do the project,” Gilbert said. “From the point of view of the city, I think we will do what we can to do everything we can to help the company make this expansion or make development that benefits us all.”
The city quickly began to build TIF neighborhoods, starting in the mid-2000s, but just as quickly encountered several obstacles.
The city commission approved the creation of the first district in the city in 2005, an 18-year deal for the then Advance Food Co. to build its current production facility at Garfield County Industrial Park on 66th.
The second quarter of TIF, approved a year later in 2006, would set up the first ethanol plant in Oklahoma, again located in northeastern Enid. Another ethanol plant was approved six months later.
However, both plants were delayed within a year due to reported failures in the ethanol industry.
Koch Nitrogen employees plan to build a new urea plant and “upgrade” existing production processes with an investment of more than $ 1.2 billion, a company spokesman said.
The current Roosevelt Apartments TIF-4 district – which funded the construction of a 48-unit affordable housing complex – was good in 2007, despite much dissatisfaction with the neighboring eastern community.
Enid created the TIF neighborhood in 2011, intending to renovate, or “de-mall”, Oakwood Mall, turning it into an open-air shopping area, while destroying everything but the three anchor shops. The value of the property was expected to increase by $ 18 million.
That same year, commissioners approved the creation of an area for a proposed rapeseed processing plant with Northstar Agri Industries. However, the property was put up for sale in 2015 due to drought and a lack of rapeseed, city officials said.
Until 2016, the TIF areas of the rapeseed plants and two ethanol plants were closed at the same time, during the same meeting when another was established, the TP&L facility area.
And as the deadlines for completing any work on the mall expired, the TIF district resolution was terminated in May 2017 – again during the same city committee meeting when the city’s newest TIF district was established. with ADM Milling.
In April, city commissioners took the first steps to create a new neighborhood (and expand the current one) by approving a TIF review committee that will meet three times with city officials and legal advisers before drafting current resolutions.
After the Sofia Regional Planning Committee votes on whether to recommend the proposals on June 20th, a second, final public hearing will be held at the commission’s June 21st meeting. City commissioners will make the final decision on whether to extend number 7 and create number 9 at the same meeting.