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Nichols’ tower


The latest building block for Larry Nichols is chairing a new economic development nonprofit for OKC.

Clifton Adcock May 11th, 2011

Outside of elected officials and public employees, it’s hard to argue that Devon Energy Executive Chairman Larry Nichols isn’t one of the most influential people in Oklahoma City government.

Larry Nichols at an Oklahoma City Council meeting.
Credits: Mark Hancock

Not only is Devon Energy’s tower transforming the Oklahoma City skyline, but Project 180 — undertaken at the behest of Nichols as a condition of the tower’s location — is transforming the streets of much of downtown as well.

But Nichols’ influence is not limited to Devon tower and the Project 180 area; he also serves on several public and private boards and committees in the city.

Now, he will chair the board of a new nonprofit group that has just contracted with the city to work on economic development projects: the Alliance for Economic Development of Oklahoma City.

After being delayed for two weeks because several council members expressed concerns about the deal, an amended contract with Alliance was approved at the council’s April 26 meeting by a vote of 7-1; the dissenting vote was new Ward 2 councilman Ed Shadid.

Several citizens have expressed concern with Alliance, which is not a public entity, for taking such an important role in the city. Critics have questioned its transparency and who is behind the nonprofit group.

What role did one of the most powerful businessmen in the city play in the formation of Alliance, and what does the city’s agreement with Alliance entail?

TOWER OF POWER

Nichols, who was unavailable for comment on this story, has been instrumental in the transformation of downtown Oklahoma City, and is largely responsible for spurring Project 180, a massive $175 million streetscape redesign accompanied by improvements to the Myriad Botanical Gardens, paid for by a tax increment finance (TIF) district surrounding the rising Devon tower.

The project was approved in 2008 by the City Council.

City Manager Jim Couch praised Devon’s use of the TIF dollars, which most companies would have used to finance their development, rather than public projects.

“He’s a pretty well-respected downtown leader. His reputation’s pretty pristine,” Couch said of Nichols. “What Devon has done for downtown alone, I can’t tell you another company in the world that would take the TIF dollars and put them back into public improvements for downtown.”

Besides serving as head of one of the most recognizable companies in downtown Oklahoma City, Nichols also serves in other civic capacities, including the Greater Oklahoma City Chamber’s Forward OKC program, the Myriad Gardens Board of Directors, the Industrial and Cultural Facilities Trust, the MAPS 3 convention center subcommittee, as chairman of the Urban Renewal Authority, and from 1993 to 2008 on the Redevelopment Authority.

Catherine O'Connor (Center), who resigned as assistant city manager, serves as president of the Alliance for Economic Development of Oklahoma City.
Credits: Mark Hancock

FOR THE ALLIANCE

The Alliance for Economic Development of Oklahoma City is a 501(c)(4) organization, also known as a social welfare organization, according to incorporation filings with the Oklahoma Secretary of State’s Office, although the group has yet to file its tax-exemption paperwork with the Internal Revenue Service.

Under the group’s contract with the city, Alliance will provide services on behalf of the city and several public trusts, including the Economic Development Trust, the Urban Renewal Authority, the Redevelopment Authority, the Industrial and Cultural Faculties Trust, and the Industries Authority, which is a county trust.

The Alliance’s functions, according to the contract, include coordination, management, planning and/or implementation of the city’s general obligation limited tax bond program and 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 opportuni ties with MAPS projects — including 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 it 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.

Former Assistant City Manager Catherine O’Connor is slated to serve as president of the Alliance. O’Connor, who left her position with the city at the end of April, said her new role was a natural transition, since she has been working on economic development issues for the city for more than a decade.

“A lot of what I’m going to do is defined in the scope of work in the agreement, and a lot of it is things I was working on before,” she said. “I took a great deal of what I was doing before with me.”

The Alliance will have a small staff of probably two to three people, O’Connor said, although it will be able to draw on current city employees also working on economic development.

The amended Alliance board includes Nichols, former Mayor Ronald J. Norick, Oklahoma City Thunder owner and businessman Clayton Bennett, Greater Oklahoma City Chamber President and CEO Roy Williams, Couch, City Councilman Patrick Ryan, United Way of Central Oklahoma President and CEO Debby Hampton, Tyler Media General Manager Tony Tyler, First State Bank President Christopher Turner, attorney Michael Brooks-Jimenez and Full Circle Bookstore owner James Tolbert, a former mayoral candidate.

COOKING WITH COUCH

Couch said several catalysts led to the formation of the group, including the city’s relatively recent foray into general obligation limited tax bonds and TIF districts and the Economic Development Trust, coupled with institutional changes such as the recent death of Paul Strasbaugh, head of Oklahoma Industries Authority and Oklahoma Industries and Cultural Trust, and the retirement of JoeVan Bullard, director of the Urban Renewal Authority.

The group basically standardizes the practices currently in place, Couch said, citing other cities such as Louisville, Ky.; St. Louis; and Kansas City, Mo., that all have similar organizations.

“When we get major issues that come down the line, whether it’s the Devon project, Skirvin project or Bass Pro, all of which were kind of combination projects with my office and Cathy (O’Connor) and Urban Renewal and other folks … it was always kind of this ad hoc deal that we came to with no formal structure, and we really didn’t have people dedicated to it, so it was taking away from their other jobs and responsibilities,” Couch said. “We really didn’t have a good structure for dealing with those.”

Another problem is the possibility of leaked details regarding early negotiations between the city and organizations or businesses, he said.

“That’s why we have an entity like that, so we can keep some of those documents in-hand, under wraps a little bit, so we can get the project done until it’s cooked,” Couch said of Alliance on April 26. “Then we can take it to the public bodies and have full disclosure at that point in time. It’s very, very difficult to negotiate these type of deals with one armed tied behind your back.”

While the final offer will be released, he said many businesses shy away from their negotiations being made public. The city would have been “fried” if negotiation details with the Hornets had been publicized.

“Every deal the city is involved with ultimately is going to be an open record. If there’s dollars involved, it’s going to be a public record. What’s difficult is sometimes negotiating with a company and not negotiating it in the newspaper,” Couch said. “It’s really a cumbersome project at times. It isn’t like we’re trying to hide anything. The ultimate project is going to get a full airing, but sometimes you just can’t negotiate — and a company doesn’t want to negotiate — in a daily, blow-by-blow public process.”

Alliance will not be able to make public policy decisions, he said. That authority still rests with public boards and trusts.

City Manager Jim Couch
Credits: Mark Hancock

“We’re not transferring any power or authority,” Couch said. “Those groups, which are public entities, still have all their authority and make all the final decisions. This is an administration/coordination type process.”

Mayor Mick Cornett said the group would bring efficiencies to city government, both in terms of cost and stream-

lined communication between agencies and boards.

“From what I understand, it would be a more efficient way to address economic development opportunities,” Cornett said. “I’m constantly asking the staff to push for efficiencies.”

Alliance board responsibilities will include ensuring no performance issues arise in carrying out contracts with the public entities, O’Connor said.

The board will likely not have regularly scheduled meetings, and will not be subject to Oklahoma Open Meeting Act, but if it chose to have its meetings open to the public it could do so, O’Connor said.

Board members will also probably be briefed on some ongoing projects if they wish, she said.

“As often as they want to be briefed — it’s up to them how often they meet. Some of them are going to get briefed in their role as public officials,” O’Connor said. “Most of them will see me more in those roles than in any other.”

TOOL TIME

In an April 8 Alliance press release issued by Jones Public Relations, Nichols praised the group, saying that the nonprofit would help facilitate further development in Oklahoma City.

“Oklahoma City is at a unique stage in its growth,” Nichols said in the statement. “As a community, we have implemented strategies that are attracting investment in our city at an ever-increasing rate, yet the process and entities to help facilitate that growth have been the same for many years. This new entity is very similar to successful organizations in other cities, and consolidates all the tools for development into one toolbox. This really gives us a framework to fast-track critical projects.”

The board members of Alliance were selected because of their positions on public commissions and boards that deal with economic development, Couch said, but after the City Council raised questions as to the geographical and ethnic diversity of the board, other members were added.

Incorporation records show that Nichols is one of the incorporators of Alliance, along with Bennett and attorney John Michael Williams. On behalf of Alliance, Nichols signed documents and the contract presented to the City Council.

The Alliance name was reserved with the Secretary of State’s Office on March 7, and the organization was incorporated by Nichols, Bennett and Williams on April 1, according to Secretary of State records.

Nichols was appointed to the Urban Renewal Authority by Cornett at the April 5 council meeting; at the next council meeting, the contract with Alliance was on the agenda’s consent docket for approval.

Couch said Nichols became involved as the idea about forming the nonprofit progressed, but that his initial involvement was minimal. “It was initiated by John Williams and myself. As it evolved over time, (Nichols) became briefed on it and part of it,” Couch said. “I don’t know if (Nichols being an incorporator) has significance. I think they were just people taking off to sign the papers as it was being formed. “Because of his downtown involvement and being on Urban Renewal, he seemed like the logical person to go on (the Alliance board).”

Mayor Mick Cornett
Credits: Mark Hancock

Cornett said Nichols’ appointment to Urban Renewal was based on a resignation from that board, and was more reflective of all the transition that was taking place at the time.

“It might have reflected the fact that there was transition in some of the agencies, but I don’t think it was specific to him,” Cornett said. “There were a lot of moving parts that played into the timing.”

Nichols had previously served on the Urban Renewal Authority, but resigned in 2008 when the Devon tower project came up. Although he could have simply recused himself, Nichols chose to resign to make sure there was no appearance of an impropriety, Couch said.

A search of Secretary of State records for conflict of interest forms, which are required to be filed by the city for members of public trusts and boards, showed that the city had not filed such forms for the Urban Renewal Authority with the office, which under state statute, is the proper custodian of the records, at press time.

 
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05.12.2011 at 02:03 Reply

 

City Manager Jim Couch praised Devon’s use of the TIF dollars, which most companies would have used to finance their development, rather than public projects.

“He’s a pretty well-respected downtown leader. His reputation’s pretty pristine,” Couch said of Nichols. “What Devon has done for downtown alone, I can’t tell you another company in the world that would take the TIF dollars and put them back into public improvements for downtown.”

While commendable, it may not be legal to do so. I read that it was against state law(?) to apply TIF money outside of the designated TIF area. The Devon TIF was carved out of an existing TIF (thereby surrounded by the pre-existing TIF area). Legally, the money is only to be used within the designated TIF district. In this case, Devon property.

 

“When we get major issues that come down the line, whether it’s the Devon project, Skirvin project or Bass Pro, all of which were kind of combination projects with my office and Cathy (O’Connor) and Urban Renewal and other folks … it was always kind of this ad hoc deal that we came to with no formal structure, and we really didn’t have people dedicated to it, so it was taking away from their other jobs and responsibilities,” Couch said.

 

Yet nothing about the Alliance solves this as: 

“A lot of what I’m going to do is defined in the scope of work in the agreement, and a lot of it is things I was working on before,” she said. “I took a great deal of what I was doing before with me.”

The Alliance will have a small staff of probably two to three people, O’Connor said, although it will be able to draw on current city employees also working on economic development.

 

 

Another problem is the possibility of leaked details regarding early negotiations between the city and organizations or businesses, he said.

“That’s why we have an entity like that, so we can keep some of those documents in-hand, under wraps a little bit, so we can get the project done until it’s cooked,” Couch said of Alliance on April 26. “Then we can take it to the public bodies and have full disclosure at that point in time. It’s very, very difficult to negotiate these type of deals with one armed tied behind your back.”

Yet those laws requiring transparancy and open meetings/records exist for a reason. The Allaince is a deliberate attempt to circumvent the intent and purpose of the law:

The board will likely not have regularly scheduled meetings, and will not be subject to Oklahoma Open Meeting Act, but if it chose to have its meetings open to the public it could do so, O’Connor said.

 

 

 
 
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