Tax district aims to lure employers to Oklahoma CityPublished: Sunday, January 11, 2009 7:00 am By: Steve Lackmeyer
J.C. Penney Co. Inc. and Boeing represent the dreams of economic recruiters across the country -- companies that were enticed to move their corporate headquarters.
For Plano, Texas, the opportunity to lure J.C. Penney 15 years ago resulted in the arrival of 3,800 employees and construction of a $200 million headquarters. The cost: a 25 percent tax rebate. Boeing, meanwhile, moved its 500-employee headquarters from Seattle to Chicago in 2001 after being offered $60 million in city and state tax breaks.
Could $40 million included in a new Devon Energy Corp. tower tax increment finance district give Oklahoma City hope for a similar success story?
Roy Williams, president of the Greater Oklahoma City Chamber, is among those cautioning that the national recession may make it difficult for any company to consider a move any time soon.
"Right now, there is not much activity in the marketplace, mostly there is downsizing and consolidating, not relocating," Williams said. "The opportunity is not really out there. But when we do recover, there won't be a lot of cities out there in the position to do this."
Such a delay in opportunity, Williams said, is actually advantageous for Oklahoma City. The incentive money, he adds, won't be easily accessible for a few years.
Building the pot
The $40 million incentive pool was added late in the formation of the tax increment finance district.
When Devon Energy Chief Executive Officer Larry Nichols unveiled plans for the company's $750 million new world headquarters, he was quick to announce that instead of seeking the district incentives for his project, he instead wanted to see the money used to improve streets, sidewalks, parks and public spaces.
His goal: to use the new Devon tower and revitalized central business district to lure more headquarters to downtown Oklahoma City.
"Maybe it won't be a giant company, but certainly companies important to Oklahoma City," Nichols said. "What's just as important is the quality of life and business environment of a city. And during the last 10 years Oklahoma City has demonstrated enormous potential for growth and development."
Nichols said his experience as chairman of the chamber and vice president of its economic development committee convinced him a lot of companies are looking to locate branches or relocate operations to "friendly" places. Nichols started out seeking a tax increment financing that would revive "worn out, tired streets" and add new life to downtown. The opportunity for incentives coincided with expansion of the plan.
Assistant City Manager Cathy O'Connor said the amount of money generated by the district increased when the committee that oversees the district agreed to add sales taxes