Oklahoma City voters supported a $75 million measure in a 2007 bond issue intended to bring quality jobs to town and to keep them here.
That effort, which so far has expended about $64 million through the Oklahoma City Economic Development Trust's Strategic Investment Program, appears to have done what it proposed to accomplish.
In June, the program had active agreements worth about $43.1 million with 16 employers that promise to create more than 6,600 jobs.
Just over 1,900 jobs have been created so far, but if all of those jobs are created, it's estimated those companies would spend more than $740 million to bring in workers who would earn about $417.4 million annually.
On Sept. 12, voters are being asked to authorize $50 million in new bond funds for future efforts to continue attracting quality jobs. Another $10 million also would be used to help create incentives for developers to build affordable housing within the city.
The economic development/housing measure is part of an overall bond package of $967 million that would also address streets, bridges, traffic control systems, parks, and needed drainage improvements.
Bond money also would be used to improve firefighting, police and city maintenance facilities, libraries, the city's transit system, the Civic Center complex and the downtown arena.
City officials have said approval of the entire package would not change the city's property tax rate (a person's property tax still could go up, but only if the value of his or her property were to increase). Also, if parts or all of the package were rejected by voters, the city's property tax rate would decrease, over time.
The Sept. 12 election also asks city voters to approve a permanent quarter-cent sales tax increase to hire police and firefighters and a 27-month extension of the 1-cent MAPS sales tax to resurface streets and to put in streetscapes, as well as to build trails, sidewalks and bicycle-related improvements.
When the city held its last bond issue election in 2007, there were 11 propositions on the ballot. All of them passed with at least 78 percent support.
The proposition that received the most opposition, interestingly, was the one proposing to create the economic development trust's strategic investment program. More than one in five voters in that election voted against it.
As for the Sept. 11 election, there doesn't appear to be any organized opposition.
An ongoing concern
Still, as city officials worked earlier this year to develop the bond and sales tax proposals voters will consider, they heard from citizens who were seeking to get education funding on the ballot as well.
In June, those citizens announced they would launch an initiative petition drive seeking an election on a local income tax for public schools in Oklahoma City. The petition effort, launched by Save OKC Schools, officially kicked off earlier this month at a rally attended by about 100 people.
At least one of those involved said he won't support the economic development measure before voters on Sept. 12.
"I will be voting against the economic development portion of the bond for the simple reason that we are incentivizing behavior that was likely to happen (or not) anyway," Nick Singer, an Oklahoma City residents who is involved in the Save OKC Schools effort, explained in an emailed statement.
"It is unlikely that it is having the effects its supporters claim it does."
Singer wrote he believes that nearly all of the large allocations from the strategic investment fund went to very larger corporations to support projects they already were going to do, based on market conditions.
He wrote that those conditions had a larger effect on their decisions than money from the strategic investment fund, and, he also noted that many of the companies also received support from Oklahoma's Quality Jobs program, too.
"That tax money should be used for the collective purpose of building road, public infrastructure or development that benefits those not served by the private sector like low income housing or small businesses struggling to get capitalized and who can really grow the local economy, not a Boeing who can get capital from a thousand different places and doesn't need the money anyway," Singer wrote.
Singer also expressed his continuing disappointment that the city council resisted calls to rejigger the temporary sales tax to help public schools.
Plus, he wrote he worries temporary sales tax money set aside for road improvements won't have the same oversight as the road improvement bond funds voters are being asked to approve in the same election.
"I am concerned how this will get spent and it forces other needs, like our schools, to wait so we can fill potholes. I'm skeptical voters actually prefer that," he wrote.
Accomplishments
When looking at what Oklahoma City has achieved through its 2007 economic development bonds, the leader of the city's nonprofit economic development organization said she believes city voters have much to be proud of.
"These are all very good things for the city's economy," said Cathy O'Connor, president and CEO of the Alliance of Economic Development for Oklahoma City. "We are one of the few cities in the country that has its own local economic development fund."
Of course, as Singer noted, many of the companies involved in projects with the Oklahoma City Economic Development Trust's program also received incentives from other governmental entities and programs to bring jobs here.
Boeing, for example, enjoys state income tax breaks both for the company and aerospace engineers it has brought to Oklahoma City as it has expanded.
But still, promised funding from the Oklahoma City trust to Boeing worth nearly $12 million has so far created nearly 1,300 new jobs involving maintenance work it does on the C-130 and the B-1. And more jobs likely are on the way.
The incentives helped the firm build a new $80 million, 290,000-square-foot facility at its current southeast Oklahoma City location, including more than 150,000 square feet of cutting-edge lab space, according to the city.
City officials estimated Boeing's expansion would have a positive impact of $637.7 million on Oklahoma City's economy during its first four years, according to city documents.
Companies such as General Electric, Tapstone Energy, Enable Midstream, Paycom and others received incentives from multiple sources including the city trust, as well.
Recently, the city used money from its strategic investment fund to land an aircraft maintenance center being built at Will Rogers World Airport by SkyWest.
Plus, there also is a case where strategic investment program money from the city trust played a significant role in landing a major economic plumb.
The under-construction maintenance center at Tinker Air Force Base for the KC-46A Pegasus, a new generation of aerial tanker Boeing is building for the U.S. Air Force, is an example.
This project, which the city estimates will cost a half-billion dollars to build, initially will consist of taxiway, parking area and two maintenance hangars on Tinker Air Force Base's southwest end.
Tinker's civil engineers say the current work, which should be completed next year, is just the start of a project that the city predicts will bring at least 1,321 quality jobs to town.
Engineers say they anticipate the complex will grow in the future as the numbers of KC-46A aircraft in service climb.
The city trust pitched $23.5 million into a deal to buy 158 acres of land owned by Burlington Northern Santa Fe Railway that previously had provided rail service to the old General Motors manufacturing plant south of the base.
Other entities contributing money to acquire the land were the U.S. Air Force, which contributed $8 million, and Oklahoma County, which contributed $12.5 million.
The deal helped the base both because it provided room to maintain and overhaul the tanker, plus, it connected the base to the old General Motors building, which Tinker also owns.
"It is important because it allows the base to expand the work it can do in an efficient way ... and gives it the ability to be competitive with other air force bases across the country," O'Connor said. "It also positions Tinker to be less susceptible to base closure.
"And these jobs are critical. This project could add 3,000 or more jobs to the local economy."
Housing component
Another aspect that makes the 2017 measure different from the one voters approved in 2007 is that $10 million of the $60 million being sought would be used as an incentive to encourage developers to build affordable housing for the city's population.
Ian Colgan, an assistant executive director of the Oklahoma City Housing Authority, has made presentations on the issue, observing more than 20,000 households in Oklahoma City pay more than half their gross incomes for rent.
By consensus, "affordable" housing should cost no more than 30 percent of a family's income.
"Oklahoma City always has touted its affordability in its growth of economic development, and that's been a key part of its recipe for success," Colgan said.
"But the flip side of that is, with the rental boom that is happening, we are building a lot of product that it is at the top end of pricing points."
That causes rental rates to rise across the area, and Colgan said Oklahoma City has seen some of the biggest increase in rental rates in the country the past decade.
He said increasing construction and land costs are making it hard for developers to build housing they can price affordably.
"There are very, very few resources available to build affordable housing," he said. "We need to provide assistance to developers to create more of this product, and this money would help attract them to build mid-price projects they couldn't otherwise do."
Accountability
Like with the money allocated from the 2007 bond issue, economic development money from the 2017 election would be allocated only after the trust and involved companies negotiated agreements, and only after the involved companies created the jobs they promise.
Those agreements typically also include claw back provisions authorizing the trust to seek a return of economic development dollars used to buy land or make infrastructure improvements when a company changes its plans.
The existing program (and the one before voters on Sept. 12) are regularly audited, plus, O'Connor said this type of economic development essentially pays for itself because of increased property taxes those new projects generate.
"Even with the Tinker project, which doesn't pay property tax, the money still comes back through spinoff businesses and the houses and cars these new employees buy once they get here," she said.
