The Oklahoma City Economic Development Trust at its April 26 meeting gave the green light for Level Urban Apartments, located at Northeast Second Street and Oklahoma Avenue, to receive $1.25 million in tax increment finance district money for development.
However, the developer, Center City Development LLC, will not receive the money until it has completed the project, paid the first year’s taxes and met other requirements.
The City Council must also approve the deal.
The approximately $18 million project will take up an entire city block, which will include a four-story parking garage surrounded by the apartment building and two green spaces. The plans call for 228 units; 147 units will be single-bedroom apartments, and the remaining 81 units will be two-bedroom floor plans.
The project also features 5,000 square feet of commercial space on the first floor, 2,700 of which will be dedicated to a restaurant and the remainder will be for an urban grocer, Center City Development head Richard McKown told the trust.
Street parking also has been realigned from parallel to angled parking, McKown said, allowing for more spaces.
McKown said the project has been under construction for about 10 weeks now and is expected to be completed by spring of 2012.
above Level Urban Apartments construction is ongoing.
“Without the support of Oklahoma City and its commitment to downtown housing, this project would have never been possible,” McKown told the trust.
The property is located in TIF district No. 2, and the $1.25 million will be taken off the incremental increase in property taxes caused by the development of the property.
Since the money is not paid until after the project is complete, the first year’s taxes are paid and people have actually moved in, it guarantees that the city will not lose its incentive funds, said Assistant City Manager Catherine O’Connor.
“We think it’s a good project and will be a good addition to north Bricktown,” O’Connor said.
McKown said both the way in which the apartment project is being financed through TIF funds, and the method in which the TIF funds are being disbursed, will make the best use of the money and ensure that the city gets the most reliable return on its investment.
“We think it’s a good approach, and we certainly think (it’s a) model for how the city should structure its future agreements on finishing out TIF No. 2, which is the downtown TIF,” McKown said.
TIF district No. 2 has more than $100 million available in potential tax increment financing, McKown said. Included in that $100 million is $20 million to create downtown housing.
Some of the first approaches to TIF funding for downtown
housing were rebuilding or improving infrastructure to try and lure
housing developments downtown, McKown said.
“It
didn’t accomplish the goal,” McKown said. “There was all this very,
very expensive for-sale housing that got started with one exception.”
That one exception was the Legacy at Arts Quarter apartments, which got TIF funding to build a parking garage, McKown said.
The TIF funding will go toward reimbursing the Level Urban parking garage, McKown said.
“Oklahoma
City’s ready to become this incredible city, and it needs incredible
buildings to live. We decided that, well, let’s follow the example of
Legacy and seek TIF funding to bridge that gap,” McKown said. “It’s the
piece that makes the project feasible, without which we would have gone
to an entirely different design.”
Parking
garages are much more expensive than parking lots, costing more than
$10,000 more per-space than a paved parking lot, McKown said, and the
cost of the Level Urban’s garage is projected to be about $3.8 million
more than just having a standard parking lot.
McKown
said the perception of TIF financing is often of cities giving out
money to developers, then hoping that the developer completes the
project, the project lives up the promises made, and the city gets a
return on its investment. The way this deal is done takes away those
risks, McKown said.
“There
are about five big hurdles we have to leap over before we have to come
back and apply for reimbursement,” McKown said. “In a different city in a
different TIF scenario, the city might have written us a check up-front
and hope we get it done on time and hope we pay our taxes and hope we
get a minimum valuation on the building. We’ve agreed to do all those
things, and you don’t need to give us any money till we do all those
things.”
Much of
the encouragement to do the TIF in this manner came from the city and
city staff, McKown said, and the hope is to continue to encourage
further development.
“We
want the city to be able to protect its ability to do TIF funding. We
think there needs to be lots more buildings downtown that people can
live in. In order for that to happen and for there to be more parking
garages and not have a city filled with parking lots, we need to set the
example.”
