Chickasha committee hears consultant on proposed TIF for airport-area industrial development; data-center incentives discussed

Chickasha’s TIF Review Committee heard an overview of tax increment finance (TIF) districts and tax incentive districts (TID) and discussed a proposed TIF aimed at encouraging industrial development near the Chickasha Airport.

Kathy O’Connor of the Co Align Group led the presentation, describing TIF as a tool authorized under the Oklahoma State Constitution and the Local Development Act. She said the mechanism ‘‘apportions the increment of new tax revenues, which means it’s the new tax revenues generated by new investment, within the District to finance identified project costs.’’ O’Connor emphasized that ‘‘It is not a tax increase. It does not raise taxes in the area where the TIF District is created, or in any other part of the community.’’

O’Connor and city staff described a proposed TIF that would focus on industrial or primary-job development around the municipal airport. The presentation used an illustrative build-out of about $600 million in private investment and an illustrative revenue-sharing structure in which 75% of the tax increment would be used to finance project costs and 25% of increased tax revenues would be distributed to the county, school district, EMS and other taxing jurisdictions. A staff member provided preliminary calculations, saying a full build-out on the order of $600 million ‘‘might result in on the order of about $6,000,000 a year in ad valorem taxes,’’ of which roughly $4,500,000 a year would be available for project costs and about $1,500,000 would flow to taxing entities under the example presented. Staff characterized these numbers as rough estimates subject to refinement in a project plan.

The committee also discussed tax incentive districts for data centers, which the presentation described as a separate statutory option that provides exemptions from local taxes for a limited duration. O’Connor noted that an amendment to state statute allows for a 25-year exemption in some data-center arrangements; communities commonly pair such exemptions with in-lieu-of-tax or pilot-payment agreements so local jurisdictions receive some payments back from developers even when large abatements are granted.

Questions from committee members focused on geographic boundaries, land ownership, the timing of property transfers, annexation requirements for parcels outside city limits, and how the school district would be affected. Staff said much of the initially proposed TIF area lies inside the city and in a designated enterprise zone; areas that remain outside city limits would need annexation before being included in a TIF or TID. Staff also explained a preference for creating a 100% TIF and allocating 25% back to taxing entities so the school district could treat the distribution as ‘‘other revenue,’’ potentially increasing local revenue without reducing the amount of state aid they would otherwise receive.

Statutory constraints were reviewed: staff cautioned there are aggregate limits on the total land area and net assessed valuation included in TIF/TID districts (examples discussed included a 25% cap on city land area and a 35% cap on net assessed valuation across all districts, and a 25% cap for school district valuation in the aggregate). Staff stated the city is not close to those statutory ceilings in aggregate at present.

The consultant said staff will prepare a draft project plan and reconvene the TIF Review Committee to examine a near-final draft. O’Connor suggested the review and Planning Commission steps could be completed in November–December with possible City Council adoption early next year if the timeline holds. Committee members tentatively scheduled a follow-up meeting for December 1 at 1:30 p.m. to review materials.