Supporters of Millwood Public Schools in northeast Oklahoma City are worried about how the proposed expansion of a Tax Increment Finance district would divert future revenue away from the school system for a development project that includes retail space, a hotel and the new national headquarters of USA Volleyball.
During a special Oct. 17 meeting of the Northeast Renaissance Increment District Review Committee, members postponed a vote on expanding the northeast OKC TIF district, which was originally approved in 2019 as an effort to eliminate blight and increase economic opportunity around OKC’s Adventure District. While the proposed TIF district expansion could be voted on at the committee’s next meeting — set for 11 a.m. Friday, Nov. 1 — financial details could change if the concerns of Millwood and Metro Technology Center stakeholders win out.
“You’re talking about a new development that could be helpful if Millwood receives its fair share of the property taxes,” John Pettis, an at-large member of the review committee, said after Thursday’s meeting. “But you’re talking about doing a TIF that’s more than what Millwood’s last bond issue was for. That’s a red flag for me as a Millwood district resident, and I do work for Millwood.”
Proposed during a June 28 committee meeting, the amended project plan would add two new areas into the TIF district. Increment district “D” covers a plot within Millwood Public Schools at the southeast corner of Martin Luther King Boulevard and Northeast 63rd Street, just west of the American Pigeon Museum and an Oklahoma City-County Health Department complex. (Increment district “E” has also been proposed southeast of Post Road and Northeast 50th Street.)
TIF districts offer a slightly complex and sometimes controversial method of creating opportunities for development and redevelopment of areas that need a makeover. TIFs in Oklahoma can last up to 25 years and can involve sales tax and/or property taxes. Pettis noted that the proposed district “D” in northeast OKC would only divert property taxes — which go to school districts, technology centers and county services — but the City of OKC would retain all sales tax revenues.
When creating a TIF district, cities designate anticipated increases in future sales tax and/or property tax revenues as collateral to borrow money for investment into development, typically in the form of incentives to developers and the construction of public infrastructure like sidewalks and streetscapes.
The loans are ultimately repaid by the increased tax payments from the redeveloped areas.
“What’s also concerning is the city wants Millwood to give up its property taxes, but the city ain’t talking about giving up its sales taxes. Red flag,” Pettis said. “You cannot talk about a poor, Black school district giving up its property taxes if the city ain’t talking about giving up its sales taxes. That’s not right, that’s not fair.”
About two and a half years ago, USA Volleyball contacted project plan developer Andy Burnett about relocating its headquarters from Colorado Springs to Oklahoma City. The proposal — which Burnett said “ramped up” in November 2022 — would include the organization’s new flagship headquarters and a corresponding volleyball complex built to host professional and youth tournaments, youth and adult volleyball leagues, and a possible partnership with Oklahoma City Public Schools’ athletic programs. Additionally, the development would include restaurants and a hotel, Burnett said during the Oct. 17 committee meeting.
Burnett said USA Volleyball set a verbal goal with him to begin construction this fall. Based on what Burnett referred to as a “handshake” deal, construction on the project within the Millwood district has already begun, despite the fact city and school officials are still discussing the potential impact of the build and TIF expansion.
Burnett told committee members that he had met with OKC city manager Craig Freeman, Alliance for Economic Development CEO Kenton Tsoodle and Ward 7 Councilwoman Nikki Nice.
“We felt pretty confident in the TIF structure,” Burnett said. “We had a letter from the city — I think it’s OK for me to say that — stating that this is what the TIF would look like. So, once I had all of that done, knowing that we hadn’t finished this process, I went to USA Volleyball and said, ‘Hey, the only way for us to hit the fall of ’24 dates is for us to get started. I don’t have the TIF finished, but I have this letter, and we’ve met with all the people. I think we’ll figure it out. Oklahoma City’s a small town, good people. I think with all of this at play, we can start construction.’ That’s my own mistake.”
During the meeting, Nice said that although there had been a town hall meeting with Millwood families after the June review committee meeting, community members have yet to be updated on the newly amended project plan that would tie up potential property taxes otherwise available for school bond packages.
“It was a very well attended meeting,” Nice said. “The problem with this is we have not had an additional follow-up meeting with the people that we need to be accountable to. I don’t have a problem with us trying to work through this, but right now, I would like for us to look at doing this differently, and at a later time, because our community and our neighborhood have been presented one thing, and now we’re going forward with something, and it makes the neighborhood think that we’re doing this without them.”
While Nice currently represents northeast OKC on the City Council, she has been elected to represent Senate District 48 and will be sworn into the Oklahoma Legislature in November. Pettis is one of at least three candidates seeking to replace her.
If the amended project plan to expand the TIF district is approved and the USA Volleyball complex and associated developments are built, Burnett said it would greatly increase the tax paid on one of the two parcels, which is owned by Medpark Real Estate LLC, a subsidiary of the Chickasaw Nation. The company has paid between $18,700 and $13,200 a year in property taxes since 2018 when it acquired the western-most parcel in the proposed TIF expansion.
While Burnett said that property tax could climb to $400,000 a year after the property is fully developed, the proposed TIF expansion would dedicate 100 percent of any property tax increase back toward the development program. Designated to divert $11 million of property tax over 25 years, the proposal calls for $8 million to go toward the retail/commercial development, $1.5 million to public improvements and development, and $1.5 million to “other public developments.” (Meanwhile, the City of OKC would retain all new sales tax dollars generated.)
As a small school district serving a majority Black student population, Millwood Public Schools would receive no additional property tax revenues or bonding capacity from the development for more than two decades, even if more students enroll.
“Our district is very small. It’s 10 square miles,” Milo Wilson, vice president of the Millwood Public Schools Board, said during the Oct. 17 meeting. “We still have apartments coming in and other things that are happening. We’re landlocked. We can’t go anywhere.”
Aaron Collins, superintendent and CEO of Metro Technology Center, said he was unavailable to discuss the proposal’s impact on Metro Tech on Monday.
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Developer faces time crunch: ‘We need to press go’
Located in northeast Oklahoma City near the crossroads of Interstate 35 and Interstate 44, the OKC Adventure District is home to many of the city’s top entertainment attractions, such as the Oklahoma City Zoo and Botanical Gardens, Science Museum of Oklahoma, the National Softball Hall of Fame, Devon Park and Remington Park. Numerous parcels of land in the area were accumulated under the city’s control decades ago to spur development of the race track, including long-forgotten leases involving the City of Nichols Hills and the University of Oklahoma.
While the area has drawn entertainment traffic for years with city and state developments, it has also overlapped Millwood Public Schools.
Burnett said the addition of the volleyball complex to the OKC Adventure District was proposed with Millwood athletic programs in mind, but he told committee members Oct. 17 that he is less familiar with how school districts receive and decide to use their tax revenue.
The leading complication Burnett and the city face is the impending fall 2024 deadline on the build. Owing to the partnership with USA Volleyball that began in January 2022.
If stakeholders cannot reach an agreement and Burnett cannot win approval to continue the project in the coming weeks, he said he and USA Volleyball will be forced to move in a different direction.
“We need to press go,” Burnett said. “It’s been two years.”
Still, Burnett seemed empathetic of the school district’s concerns and said that if Millwood leaders remain unsure about the project, he was more than willing to pause development while a solution is sought.
“We want you guys to be a part of this,” Burnett said. “We want this to be something you guys are excited about. I want you to be thrilled with what we do. The last thing I want you guys to feel is that we’re trying to rush this. I’m happy to delay this as long as you want us to delay it to make sure you guys have a seat at the table and are part of the conversation.”
In the event that Millwood does not consider the deal to be beneficial, Burnett said he could walk away from the USA Volleyball project and that it would be “no skin off my back” to convert the building already under construction to something else, such as self-storage.
Despite the concerns from Millwood representatives, there were multiple members of the increment review committee in favor of approving the amended project plan to include expanding the TIF districts.
“What we hear at the Planning Commission with school districts, usually, is that it looks like a great place for apartments,” said Rusty LaForge, the committee’s OKC Planning Commission representative. “(You could have) about 10,000 new people living there to burden the school, and instead, this is no burden on the school, other than some tax being taken away. (…) To have something like [the volleyball complex] in the school district that doesn’t add a lot of students, but instead will eventually have tax in the long run, I think we would all agree that it’s great.”
Pettis said the project could certainly offer benefits to the community, but he said stakeholders have an obligation to make sure all parties receive those benefits.
“I’m glad it was deferred so that more discussions could be had between the city and Millwood and between the city and metro tech and others. This should not be rushed,” Pettis said. “I think that a resolution can be had, but Monday (Oct. 14) was the first time Millwood received those documents, the first time that Metro Tech received those documents, but they have been asking for those numbers for months and had not received those documents. That’s an issue itself.”
