MCALESTER, Okla. — McAlester’s city council recently approved moving forward with a new tax increment financing district.
2 News listened to area residents’ thoughts and sought more answers from city leaders.
“We've needed it for quite a long time,” said John Browne.
Once McAlester’s newest TIF district gets underway, an empty field near U.S. 69 will eventually host a big-box store, three restaurants, and 128 new housing units.
But not everybody supports it, like Stephen Cornett, who lives nearby.
When asked what drew him to McAlester, Cornett said, “I lived in California in San Diego for 40 years, and I worked for a company based outta here for a while. And I liked the quiet, I liked the trees, the seasons.”
As for if he thinks the new TIF district will disrupt that quiet, he replied, “Of course. You can't put 127 or eight townhouses in without disrupting a little bit.”
What exactly is a TIF district? That’s short for “tax increment financing district.”
A city can define a geographic area where they can collect future property tax increases from new development on that land. The city can then use those tax dollars for infrastructure projects.
When asked why they need the new TIF district, TIF committee chairman John Brown told 2 News, “Well, we have a desperate need for housing.”
“Basically, the way it works is they have to earn it,” he explained. “It comes to us. And then we would return 90% to the developer.”
This setup would run for nine years (June 30, 2034) or until they reach $10 million. The City Council agreed to forgo $10 million of tax collections in return for the developer’s anticipated investment of $48 million in the project with no risk placed on the city for the project.
A portion of the funding, 2% annually for the life of the TIF, will be directed to the Frink-Chambers school district.
One local business owner we listened to told us he’s very much in favor of the TIF district.
“I think it's the only way when you talk about a stagnant town in terms of economic development, it's the only way to attract developers to come in,” said Caleb Woten. “'Cause Other towns are gonna do that for them.”
“The main thing I don't like,” said Cornett, “is there's not enough infrastructure. We don't have enough water pressure.”
We brought Cornett’s main concerns to McAlester’s former mayor, Browne.
“Why not do the things that every city in the country needs done? Basically, well, because you have to have revenue to do it,” said Browne. “And, as I said in Oklahoma, the only tax revenue that cities get is sales tax.”
He told us McAlester has some long-term bond debt that hurt the city financially.
“So, that's really limited what we've been able to do, as far as not even doing new infrastructure, but maintaining the old infrastructure,” he explained.
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