While few of the changes are major, they will update and better spell out what the city can do as part of its incentive program, said Cathy O’Connor, president of the nonprofit organization Alliance for Economic Development. The program funds come from the 2007 general obligation limited tax (GOLT) bond.
The previous governing policy for the Strategic Investment Program (SIP) was created in 2007, prior to citizen approval of the GOLT bond issue, and many of the services the city can provide as part of economic development incentives were only briefly mentioned, O’Connor said. In addition, she said developments at the state level have since impacted how those funds can be spent.
One change affects the annual salary requirement for jobs created by companies receiving SIP funds; rather than a fixed dollar amount, the salary will be set at 90 percent of the average salary in Oklahoma City. In another change, the Downtown Parking Incentive Program (which helps existing businesses relocating downtown and expanding their workforce) will be moved from the general fund to the GOLT bond program.
The revised language will also provide more in-depth explanations of existing incentive options, O’Connor said. These include an infrastructure program (allowing a company to use incentive funds to build infrastructure), a land assemblage program (using city-owned land as an incentive to lure in companies) and a leverage fund program (allowing the city to make low-interest or forgivable loans to companies).
“Basically the program is unchanged,” O’Connor said. “The only change to the standard program is the update of the wage threshold.”
The proposed changes were presented to the Oklahoma Economic Development Trust at its Sept. 4 meeting. It passed unanimously, although some panel members expressed discomfort with parts of the plan.
“The way the GOLT bond was implemented has so far been successful and avoided situations where cities overextended use of public money and [got] burned,” said Larry McAtee, a trust member and City Council member. “I see this land-assemblage program as moving in that same potential direction and it bothers me.”McAtee also voiced concern about the leverage fund program and said that both initiatives were a short leap from putting the city in the real estate and banking business.
O’Connor said the land-assemblage program has never been used, but that both it and the leverage fund program include “claw back” provisions that would protect the city’s investment.
The Oklahoma City Council unanimously approved the program changes today.