ENID, Okla. — The city of Enid is again trying to entice a new wind energy business using the popular method of covering development costs with newly generated property tax revenue — a process city officials began wielding nearly two decades ago to ultimately mixed results.
Enid city commissioners have three weeks to consider giving the go-ahead to two more Tax Increment Finance (TIF) district proposals — extending the 10-year term on a current district and creating a new one for 14 years within the same 6-square-mile area in eastern Enid.
Under the proposed agreements, the city of Enid would spend roughly $2.4 million total to reconstruct the two roads in the districts leading to the pair of wind energy facilities.
The city of Enid will hold the first of two required public hearings on both TIF proposals Tuesday during the Enid City Commission’s regular meeting, which begins at 6:30 p.m.
Nearly 100 jobs would be created by 2028 in the new TIF District No. 9, intended to support a new wind energy remanufacturing facility near Tyson Foods, according to the city’s legal counsel for the TIF proposals.
The business proposals for both TIF districts fall under the same umbrella company, the renewable energy service provider Takkion.
“They stand along as their own TIF districts, but they are related in a lot of ways,” company representative Greg Haub said during the review committee’s first meeting in April.
The new district would now incentivize Takkion to build a wind energy component remanufacturing facility, said Lisa Powell, executive director of ERDA.
In 2020, Takkion acquired Transportation Partners and Logistics, which operates a lay-down storage yard for wind energy components in the existing TIF District No. 7. The yard is located off 66th north of U.S. 412.
Cranes lift a wind turbine blade from a rail car at the TP&L facility on South 66th on Aug. 27, 2020. (Billy Hefton / Enid News & Eagle)
The new district would be located on South 54th off U.S. 412, on the site of the former Chesterfield Cylinder property. Takkion would repurpose the building for remanufacturing wind energy gearbox and turbine components, as well as build a new 50,000-square-foot building for storage, according to the city.
Powell said testing on a specific 7-megawatt gearbox would be a new industry to Enid and Oklahoma, and be the only site of its kind in the United States market.
“It could be quite a feather in our cap to have a remanufacturing site,” Powell said.
The property is estimated to be valued at $3.4 million in 2022. Its new developments are projected to raise its value to a peak $36 million by 2026, according to the county.
The property is then estimated to gain $5 million in additional ad valorem revenues over the 14-year term. Over $500,000 would go to Takkion as a property inventory incentive.
The city of Enid plans to spend about $1.3 million reconstructing 54th, and another $500,000 from the city would pay for a new firefighting ladder truck.
After property values are reassessed, the city would be reimbursed with the resulting new property tax dollars over the next 14 years.
The rest of the $2.56 million would go to the other public taxing entities with representatives on the review committee — Garfield County, the county Health Department, Autry Technology Center and Pioneer-Pleasant Vale Public Schools, as well as a member of the city planning commission.
District 7, which would be renewed another 10 years until 2036, would be Enid’s first TIF districts to be extended beyond its initial lifespan.
Enid city commissioners created TP&L’s original district in 2016 for the company to develop over 80 acres as a lay-down yard to store wind components brought in by rail for the wind energy industry. The district was set to expire in 2026.
A car drives up North 66th past Willow on Friday, June 3, 2022. The Enid road is set to receive further improvements past Willow if an existing TIF district is extended. (Alexander Ewald / Enid News & Eagle)
The initial agreement contributed $800,000 in captured ad valorem tax revenue to help the city of Enid reconstruct 66th from U.S. 412 to Willow, where the lay-down yard was to be located.
Powell said the No. 7 TIF was the solution to overcome the state’s levy on personal inventory that would’ve otherwise encouraged TP&L to develop a site in Garden City, Kan.
The city now intends to extend the term of that TIF, this time ahead of expected federal extensions on wind energy production tax credits, Powell said.
The city would then spend no more than $950,000, to be reimbursed from new ad valorem tax revenue, to extend improvements on 66th beyond Willow, according to the resolution.
Once again, now Takkion would decide whether to relocate 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 odds are in our favor,” Powell said.
TP&L, based in Wyoming, has owned the 24-acre property at 304 S. 54th since 2016, according to the Garfield County Assessor website.
TIF — what’s in a name?
A Tax Increment Finance district is a defined geographic boundary that a city or another public entity can create that captures the increment of new tax revenue as the result of development.
A TIF district establishes an area in which increased ad valorem, sales and lodging taxes will be delayed for a specific period of time to other public entities. Those funds will be used instead to help defray public infrastructure costs, often to assist a new business development.
Ad valorem dollars fund public services such as local school districts and county operations. The city of Enid, meanwhile, is funded by mostly sales tax revenue.
None of the public entities represented on the city’s current TIF review committee have reported any adverse financial impact that is expected with the two proposed TIF projects, according to the two TIF resolutions.
This slide from a city of Enid presentation planned for Tuesday shows the process of ad valorem tax value and capture in a Tax Increment Finance district.
As development occurs, the properties are reassessed and revalued at higher dollar amounts, after which associated property taxes will also increase.
The TIF then captures not the base ad valorem tax from before the assessment, but the increment over the lifespan of the TIF district resolution.
The city of Enid has three active TIF districts, as of May 2022: the TP&L facility, the Roosevelt Park Apartments on 9th and Park, and the Archer Daniels Midland Milling flour mill on North 4th.
The Roosevelt TIF, created in 2007, is set to expire 15 years after construction was completed; the apartments opened in 2009. The ADM mill district, created in 2017, has until 2028.
“They’re good tools that cities are using, including the city of Enid,” Gilbert said about TIFs. “I would say that’s probably fairly common.”
Among the roughly 100 current TIF districts in Oklahoma, only the cities of Jenks, Claremore, Stillwater, the Village and Heavener have three or more running simultaneously, according to the state Department of Commerce’s 2022 update published in May.
A TIF district makes a city more competitive for getting potential projects, City Manager Jerald Gilbert said.
After that developed business gets off the ground, Gilbert said, the projects have a “cumulative effect” on the city’s populace.
“That business employs new people and those people get paid, and those people, if they don’t already live in Enid, they come to Enid for that (and) spend their money here,” Gilbert said.
Roosevelt Park Apartment Homes (Enid News & Eagle File Photo)
Nearly all of the city of Enid’s eight TIF districts have been located on the easternmost side of town — a largely residential-free area where numerous manufacturing, processing and packaging businesses operate.
Most of these districts, as a result, were intended to incentivize new industrial and retail businesses to Enid, city officials said.
But half of the planned economic development projects did not come to fruition, following Enid City Commission approval — TIF districts for two ethanol plants and one canola plant, as well as the “de-malling” of Oakwood Mall.
“TIFs are great tools for us, but in the end, it’s up to the company or whoever’s going the private development to do the project,” Gilbert said. “From the city’s perspective, I think we will have done what we can do to make it our best effort to help the company make that expansion or do the development that benefits all of us.”
The city began rapidly creating TIF districts starting in the mid-2000s, but hit several roadblocks just as quickly.
The city commission approved creating the city’s first district in 2005, an 18-year deal for then-Advance Food Co. to build its current manufacturing facility in the Garfield County Industrial Park on 66th.
A second TIF district approved a year later in 2006 would have created reportedly the first ethanol plant in Oklahoma, again located in northeast Enid. Another ethanol plant was approved six months later.
Both plants were delayed within a year, however, because of reported setbacks to the ethanol industry.
Koch Nitrogen officials have plans to build a new urea plant and “revamp” existing production processes, with an investment of over $1.2 billion, a company spokesperson said.
The current Roosevelt Apartments TIF district No. 4 — whose funding built a 48-unit affordable-housing apartment complex — was OK’d in 2007, despite much outcry from the neighboring east side community.
Enid created a TIF district in 2011 intending to renovate, or “de-mall,” Oakwood Mall, converting it to an outdoor shopping area while destroying everything but the three anchor stores. An $18 million increase in property value was expected.
The same year, commissioners approved creating a district for a proposed canola processing plant with Northstar Agri Industries. However, that property was put up for sale in 2015 because of drought and lack of canola, city officials said.
By 2016, the canola and two ethanol plants’ TIF districts were all terminated at once, during the same meeting when another was created, the TP&L facility district.
And as the deadlines passed to complete any work on the mall, the TIF district resolution was terminated in May 2017 — again, during the same city commission meeting when the city’s most recent TIF district, with ADM Milling, was created.
In April, city commissioners took the first steps to create the new district (and extend the current), approving a TIF review committee that would meet three times with city officials and legal counsel before drafting the current resolutions.
After the Metropolitan Area Planning Commission votes whether to recommend the proposals on June 20, a second, final public hearing will be held at the commission’s June 21 meeting. City commissioners will make the final decision whether to extend No. 7 and to create No. 9 at the same meeting.