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Trust reviews administrative updates to 2008 retail incentives policy; adds thresholds for large destination retailers
Summary
Staff proposed administrative updates to the city-Trust retail incentives policy, moving from SIC to NAICS codes, clarifying approval authority and funding source intent, and adding provisions to include very large retailers and destination entertainment under specified sales and size thresholds.
The Oklahoma City Economic Development Trust on July 29 considered a joint resolution to amend the city/Trust retail incentives policy originally adopted in October 2008. Staff framed the proposed changes as administrative clarifications and two substantive additions to eligibility criteria.
Kenny Sutil, presenting staff recommendations, said the policy’s core goals remain unchanged: support new sales tax through destination or regional projects, increase the tax base and quality of life, and focus incentives on projects that generate new sales tax rather than replacing existing taxable activity. “This policy is not an entitlement,” he said, and staff reiterated that incentives should be performance-based and not exceed new taxes generated.
Administrative updates recommended include replacing the older Standard Industrial Classification (SIC) system with the North American Industry Classification System (NAICS) to define retail categories, clarifying that applications typically come through the Alliance and the Chamber, and stating that incentives must be approved by both the Trust and City Council. Staff also said the intent is to use the general fund portion of sales tax for these incentives and to avoid dedicated sales taxes where possible.
Two policy additions were described. The existing regional destination category (250,000 square feet and 50% of sales from outside a 25-mile radius) and the destination retail threshold (at least $20,000,000 in annual sales and a product/good new to the market) remain. Staff proposed adding a category for retailers generating $75,000,000 or more in annual sales that would be eligible regardless of novelty to the market. The policy would also allow inclusion of “destination entertainment” projects outside retail categories only if they generate more than $25,000,000 in sales and are part of a mixed-use development offering a unique experience.
Sutil noted the policy has been rarely used and listed prior recipients such as Costco, Cabela’s, the outlet mall and Von Maur. He said the intent is to limit use of incentives to projects that are competitive with other communities and likely to anchor additional development. The Trust took a motion to adopt the resolution; the transcript records a motion, second and passage without a recorded roll-call tally.
The modifications would change how staff screens future retail applications and expand the narrow set of projects eligible under the policy. Any final incentive agreements for specific projects will still require separate Trust and City Council approvals.
