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Strategic Alliance


A proposed economic development nonprofit meets resistance from some Oklahoma City Council members, including a new councilman planning to seek an AG opinion on the nonprofit’s required level of transparency

Clifton Adcock April 23rd, 2011

The Oklahoma City Council is preparing to take up a controversial measure at Tuesday’s meeting that would consolidate its economic development operations under the banner of a newly formed nonprofit group.

CathyOConnorCatherine O’Connor
The measure first came up during the April 12 City Council meeting as part of the consent docket, which allows for several items to be approved by a single vote. However, a majority of members of the council expressed concern about the item and it was tabled for two weeks.

The original item would have formed a contract with a nonprofit group named the Alliance for Economic Development of Oklahoma City Inc. to provide services on behalf of the city, the Economic Development Trust, the Urban Renewal Authority, the Redevelopment Authority, the Industrial and Cultural Faculties Trust and the Industries Authority.

The council will also be considering amendments to the proposed contract at its meeting Tuesday that would require some levels of transparency in terms of open records, but that may not be enough for some on the council.

The Alliance for Economic Development of Oklahoma City’s functions, according to the contract presented at the April 12 meeting, included coordination, management, planning and/or implementation of the city’s general obligation limited tax bond program and tax increment financing (TIF) districts, the city’s retail strategy and incentives, city and urban renewal redevelopment programs, identification and development of job creation sites, public-private redevelopment opportunities from MAPS projects — with special emphasis on a new convention center hotel — and the implementation of required financing associated with those projects.

The five-year contract with the nonprofit group states that the group would receive $56,000 for the remainder of this fiscal year paid for out of economic development trust funds, and $368,000 for the next fiscal year paid for out of economic development trust, MAPS 3 and general revenue funds.

Of the $368,000, $268,000 of it will be used to pay for professional services, while a clause in the contract authorizes the remaining $100,000 be set aside for additional services that might arise if the group’s scope of work changes.

Current Assistant City Manager Catherine O’Connor is slated to serve as president of the Alliance for Economic Development of Oklahoma City Inc.

O’Connor said the effort is simply institutionalizing the city’s current practices and brings structure to an ad hoc approach given to complex issues.

The current model is designed to build upon past successes, such as the Dell campus and Bass Pro Shops, O’Connor said, and facilitate better coordination of eliminate duplication of resources and efforts.
The Alliance will not make policy, which will be set by the entities involved, O’Connor said, and decisions to fund projects will be made by boards, although the group will make recommendations.

Meanwhile, other cities such as St. Louis, Mo.; Kansas City, Mo.; and Louisville, Ky. have used a similar model for their economic development projects, O’Connor told the council.

O’Connor said a nonprofit was chosen instead of another public trust because it could provide the services needed without intruding on the turf of existing public bodies.

“We felt a nonprofit provided a structure that would not make all of these entities uncomfortable,” O’Connor said. “It would provide a cohesive administrative support for all these entities and recognize that they’re distinct public trusts. If you created another public trust, they would feel like they were getting co-opted.”

FOR THE ALLIANCE

In her presentation to the council’s April 12 meeting, O’Connor said the president of the Alliance was to also serve as executive director of the Urban Renewal Authority. A step was taken toward that when JoeVan Bullard, the Authority’s director, resigned Wednesday and now the board is considering appointing O’Connor to the post.

In addition, the Alliance president’s other responsibilities would include serving as the general manger for the Industrial and Cultural Facilities Trust and the surrogate general manager for the Economic Development Trust.

“That frees up resources to help improve resources to help improve redevelopment services,” O’Connor said. “We need to continue to be a place where it’s friendly to do business and where we can respond quickly to projects when they come forward, and we think that’s an important byproduct of this reorganization.”

The Alliance will also have a board of directors, and those serving on the board include Devon Energy Executive Chairman Larry Nichols, Oklahoma City Thunder owner Clayton Bennett, Greater Oklahoma City Chamber President Roy Williams, former Oklahoma City Mayor Ron Norick, City Manager Jim Couch, and council members Pat Ryan and Meg Salyer.

Nichols will serve as chairman of the Alliance board, and has a spot on the board because of his post on the Urban Renewal Authority board, O’Connor said in an interview with Oklahoma Gazette.

Nichols was named to the Urban Renewal Board at the April 5 City Council meeting. However, in papers filed with the Secretary of State’s Office on April 1, he is also named as an incorporator of Alliance, along with Bennett and Oklahoma City attorney John Michael Williams.

In its state incorporation papers, the Alliance for Economic Development of Oklahoma City lists itself as a 501 (c)(4) charitable organization, which is also known as a social welfare organization, and the name for the group had been reserved on March 7 before being transferred to Williams on March 31.

One of the responsibilities of the group will be to oversee TIF districts in the city. Currently, the under-construction Devon Energy Center tower sits within two TIF districts, but is immediately surrounded by 25-year $175 million TIF district No. 8, which is paying for the large streetscape redesign Project 180 — another effort Alliance will oversee.

Prior to the approval of Project 180, Nichols had told the council that such public improvements were necessary in order to bring the company’s world headquarters to Oklahoma City, and TIF district No. 8, located within the boundaries of TIF district No. 2 and surrounding the Devon site, was created to fund Project 180. The only council member opposing the arrangement was former Ward 5 representative Brian Walters.

O’Connor said it was not a conflict for Nichols to sit on the board of the organization overseeing and issuing recommendations about the projects, and that the Alliance has no policy-making power, only providing administrative services, so most decisions dealing with TIF districts and Project 180 will be left up to the public bodies.

“Any policies related to the implementation or management of TIF districts would lie with the City Council and the Oklahoma City Economic Development Trust,” O’Connor said. “For him to have a conflict, he would have to gain personally or financially from a project, and that is not the case. That’s what a conflict of interest is. All the Devon TIF dollars are going toward public improvement.”

Calls to Devon Energy spokesman Chip Minty seeking comment from Nichols were not returned Friday.

The contract gets revised at the April 12 meeting, several council members, including Pete White, Ed Shadid, Larry McAtee, Skip Kelly and David Greenwell expressed varying levels of concern about the plan, ranging from the ethnic and geographic diversity of those serving on the board, to the openness of information from within the group.

Coming off the heels of an election in which more than one independent expenditure group worked to keep donors secret, White said the proposal was ill-timed.

“I’m not naive enough to not understand that when you’re competing with entities for businesses here sometimes open records gets in the way, but we’ve got to find a better way to do it,” White said.

The newly elected Shadid also commented on the timing of the plan and expressed concern that the public may not be fully informed of the group’s actions.

“The timing is I think traumatic in that, it reminds people of the way a nonprofit operated in a non-transparent manner in our city’s elections — the most expensive, divisive traumatic elections in our city’s history,” Shadid said in a telephone interview.

Friday afternoon, however, there were some revisions to the contract posted on the city’s website and on the Council’s Tuesday agenda.

Those revisions included open records provisions, making public all records related to the contract’s scope of work and all final studies or reports. The amendments exempted business plans, feasibility studies, financing proposals, marketing plans, financial statements or trade secrets submitted by a person seeking economic advice, as well as other exemptions.

One of those exemptions includes proprietary information, an exemption previously used by the Greater Oklahoma City Chamber to deny the Gazette an executive summary of the Tier II study of possible convention center sites.

However, none of the amendments address open meetings of the Alliance board.

The amendments may not go far enough for Shadid, who told the Gazette he plans to request a legislator ask for an attorney general opinion on whether such entities are required to have open records and public board meetings.

“The primary concern centers around whether an entity completely funded by the taxpayer, whether that’s a nonprofit or not; whether that’s a public body subject to the Open Meetings and Open Records Act,” Shadid said.

Joey Senat, associate professor of School of Media and Strategic Communications at Oklahoma State University, said it has become somewhat of a trend for economic development entities to sign over their authority to nonprofit groups, and cited a current incident in McAlester in which the director of a nonprofit economic development entity for the city took a weeklong trip to a trade show to Las Vegas. When someone asked for records documenting the trip, they were denied, Senat said.

“It’s something we’re seeing in other places having already occurred and in the same kind of circumstance, where you take something public, a public entity, public funds that the public has a right to see how it’s being spent and transfer it over to a nonprofit, wiping out the public’s right to see how those taxpayer funds are spent,” Senat said. “To avoid that in the future, City Councils need to stop signing those contracts and insist that if you want this money, you’re going to have to comply with the Open Meetings and Open Records Act.”
 
Read the 36-page contract with the Alliance for Economic Development of Oklahoma City.


 
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04.23.2011 at 08:16 Reply

Thank you for reporting about this. That's a heckuva lot of power over our tax dollars to be divided among existing and new business that make profits on their own perfectly well. How dare Larry Nichols tell us that he wouldn't have located Devon in his home town without us giving him tax money or breaks. How much money does he need?

 

 

04.24.2011 at 07:26 Reply

A small group of rich, white males has always run Oklahoma City from behind the scenes.  The Gaylords and their arrogant, elitist, fat cat friends have made all the important decisions that involve their own profits, and left the OKCC City Council to deal with all the mundane issues they are interested in, like garbage, water, and police/fire protection.  They call themselves the Alliance for Economic Development.  But are they the Alliance for Economic Deception?


 

 
 
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