ENID, Okla. - The city of Enid is once again trying to attract new wind energy business using a popular method of covering development costs with newly generated property tax revenues - a process that city officials began nearly two decades ago to eventually deliver different results.
The commissioners of the city of Enid have three weeks to consider giving the green sign for two more proposals of the district for financing the tax increase (TIF) - extending the 10-year mandate for the current district and creating a new one for 14 years within the same 6 square meters. mile area in eastern Enid.
Under the proposed agreements, the city of Enid would spend a total of about $ 2.4 million on reconstruction twice in counties leading to a pair of wind power facilities.
The city of Enid will hold the first of two mandatory public hearings on both TIF proposals on Tuesday during the regular meeting of the Enid City Commission, which begins at 6:30 p.m.
Almost 100 jobs will be created by 2028 in the new TIF district no. 9, intended to support a new wind energy recovery plant near Tison Foods, according to the city’s legal adviser for TIF proposals.
Business proposals for both TIF counties fall under the same umbrella company, renewable energy provider Takkion.
“They stand as their own TIF districts, but they are connected in many ways,” company spokesman Greg Hubb said during the first meeting of the audit committee in April.
The new district would now encourage Takkion to build a plant to renew wind energy components, said Lisa Powell, ERDA’s executive director.
In 2020, Takkion acquired Transportation Partners and Logistics, which operates a warehouse for wind energy components in the existing TIF district. 7. The shipyard is located at 66. north of US 412.
Cranes lift a wind turbine blade from a wagon at a TP&L plant in South 66. August 27, 2020 (Billy Hefton / Enid News & Eagle)
The new district would be located on the south 54th of US 412, on the site of the former Chesterfield Cylinder estate. Takkion would repurpose the building to rework wind turbines and turbine components, as well as to build a new 50,000-square-foot storage building, the city said.
Powell said that testing on a specific 7-megawatt gearbox will be a new industry for Enid and Oklahoma and will be the only location of its kind in the United States market.
“It could be a great advantage to have a site for renovation,” Powell said.
The property is estimated to be valued at $ 3.4 million in 2022. Its new development is projected to increase in value to $ 36 million by 2026, according to the district.
It is then estimated that the property will receive $ 5 million in additional ad valorem revenue over a 14-year period. Over $ 500,000 would go to Takkion as an incentive for 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 be paid for by a new truck with ladders for firefighting.
After reassessing the value of the property, the city would be reimbursed for new property taxes over the next 14 years.
The remaining $ 2.56 million would go to other public tax entities with representatives on the audit committee - Garfield County, the County Health Department, the Autry Technology Center and Pioneer-Pleasant Vale Public Schools.
District 7, which would be rebuilt for another 10 years by 2036, would be Enid’s first TIF district to be extended after its initial lifespan.
In 2016, the commissioners of the city of Enid created the original TP&L district for the company to develop over 80 hectares as a yard for the storage of wind components that are brought by rail to the wind energy industry. The county was due to expire in 2026.
The car is driving north on the 66th near Willow on Friday, June 3, 2022. The Enid road will get further improvements next to Willow if the existing TIF district is extended. (Alexander Evald / Enid News & Eagle)
The original agreement contributed $ 800,000 in collected ad valorem tax revenues to help the city of Enid reconstruct 66th from US 412 to Willow, where the disposal yard was to be located.
Powell said that TIF number 7 is a solution to overcome the state imposition on personal inventory that would otherwise encourage TP&L to develop a location in Garden City, Cannes.
The city now intends to extend the deadline for that TIF, this time ahead of the expected federal extensions of tax credits for wind energy production, Powell said.
The city would then not spend more than $ 950,000 to reimburse it for new ad valorem tax revenues, in order to expand the improvements to 66 after Willow, according to the resolution.
“Once again, Takkion will now decide whether to move the new facility to Enid if the new district is approved,” Powell said during the committee’s third public meeting on May 27.
“I think the chances are in our favor,” Powell said.
TP&L, based in Wyoming, owns a 24-acre property at 304 S. 54th from 2016, according to the Garfield County Assessor website.
TIF - what’s in a name?
A financial district for tax increases is a defined geographical boundary that a city or other public entity can create and which includes an increase in new tax revenues as a result of development.
The TIF District establishes an area in which increased ad valorem taxes, sales taxes and accommodation taxes will be deferred for a certain period of time to other public entities. These funds will instead be used to cover public infrastructure costs, often to help develop new business.
Ad valorem dollars fund public services such as local school districts and district work. Meanwhile, the city of Enid is mainly financed from sales tax revenues.
None of the public entities represented in the current city TIF audit committee reported any negative financial impact expected from the two proposed TIF projects, according to two TIF resolutions.
This slide from the presentation of the city of Enid, which is planned for Tuesday, shows the process of ad valorem tax value and collection in the district to finance tax increases.
As development progresses, assets are revalued and revalued to higher dollar amounts, after which related property taxes will also increase.
The TIF then does not include the basic ad valorem tax before the assessment, but an increase in the lifetime resolution of the TIF district.
The city of Enid has three active TIF counties, from May 2022: the TP&L facility, Roosevelt Park Apartments on the 9th and the Park and Flour Mill Archer Daniels Midland Milling on the North 4th.
Roosevelt’s TIF, created in 2007, expires 15 years after construction is completed; the apartments were opened in 2009. ADM Mill District, created in 2017, has a deadline of 2028.
“They are good tools that cities use, including the city of Enid,” Gilbert said of the TIFs. “I’d say that’s probably pretty common.”
Of the approximately 100 current TIF counties in Oklahoma, only the cities of Jenks, Clermore, Stilllot, Village and Hevener have three or more working at the same time, according to a 2022 State Department of Commerce update released in May.
The TIF district makes the city more competitive for potential projects, said city manager Gerald Gilbert.
After this developed business is started, Gilbert said, the projects have a “cumulative effect” on the city’s population.
“That job employs new people and those people get paid, and those people, if they don’t already live in Enid, come to Enid because of that (and) spend their money here,” Gilbert said.
Roosevelt Park Apartment House (Enid News & Eagle File Photo)
Almost all eight TIF districts of the city of Enida are located on the easternmost side of the city - the area without housing in which numerous companies for production, processing and packaging operate.
As a result, most of these counties aimed to encourage new industrial and retail businesses in Enid, city officials said.
But half of the planned economic development projects were not realized, after the approval of the Enid city commission - TIF district for two ethanol factories and one rapeseed factory, as well as the “de-malling” of the Oakwood shopping center.
“TIFs are great tools for us, but in the end it’s up to the company or whoever goes to private development to do the project,” Gilbert said. “From a city perspective, I think we will do everything we can to do everything in our power to help the company make that expansion or make a development that benefits us all.”
The city quickly began to create TIF districts starting in the mid-2000s, but it also quickly encountered several obstacles.
The city commission approved the creation of the first city district in 2005, an 18-year contract for the then Advance Food Co. to build its current production facility in Garfield County Industrial Park in 66th place.
A second TIF district approved a year later in 2006 would reportedly create Oklahoma’s first ethanol plant, located again in northeastern Enid. Six months later, another ethanol factory was approved.
However, both plants were delayed within a year due to reported downtime in the ethanol industry.
Koch Nitrogen officials plan to build a new urea plant and “renovate” existing production processes, with an investment of over $ 1.2 billion, a company spokesman said.
Current Roosevelt Apartments TIF District no. 4 - with whose funds a housing complex with affordable housing of 48 units was built - was OK in 2007, despite widespread outcry from the neighboring community on the east side.
In 2011, Enid created a TIF neighborhood with the intention of renovating, or “de-mall”, the Oakwood shopping center, turning it into an open-air shopping center, while destroying all but three stores. An increase in the value of the property of 18 million dollars was expected.
In the same year, the commissioners approved the creation of a district for the 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.
By 2016, the TIF districts in the rapeseed factory and the two ethanol factories were closed down at the same time, during the same meeting as the second, TP&L Facility District.
And as the deadlines for completing any work on the mall have passed, the TIF district resolution was repealed in May 2017 - again, during the same city commission meeting when the city’s newest TIF district was created, with ADM Milling.
In April, city commissioners took the first steps to create a new district (and expand the existing one), approving a TIF review commission that would meet three times with city officials and legal advisers before drafting current resolutions.
After the Urban Area Planning Commission votes on whether to recommend the proposals on June 20, a second, final public hearing will be held at the commission’s June 21 meeting. At the same meeting, the city commissioners will make the final decision on whether number 7 will be extended and number 9 will be created.