October 28, 2023
Today's episode of "Can you believe the arena-entertainment district hype?"
Let's think about Tax Increment Financing. As we saw with the UNP TIF, the diversion of sales tax revenues to the UNP FUND put the general fund at risk in a very predictable manner. (FWIW I warned against this in 2006!)
As more activity moves to or chooses to locate in the UNP instead of other parts of Norman, the General Fund receives less sales tax revenue. When the UNP bite got too big, City Council worked to end the diversion. Again, this was all predictable.
The TIF advisors (Emily Pomeroy at Center for Economic Development Law) did not advise the city about this. Her job was to estimate the amount of diversion (increment growth) and if this would be enough to pay off borrowing costs. Focusing just on what is likely to happen in the targeted TIF district is just one part of the needed analysis.
None of the "studies" provided for Arena 1.0 looked at the impact on the City general fund. None.
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