Claremore Daily Progress

Government

December 5, 2012

TIF-errific: Tax increment financing district gets council approval to spur growth

CLAREMORE — The Claremore City Council took a giant leap forward in economic development Monday night after months of preparation led to the final approval for the first TIF (tax increment financing) district in Claremore.

“This project is a great example of how economic development works at its best,” said Mickey Thompson director of the Claremore Economic Development Authority (CEIDA).
The TIF district will be used to fund the new $3.2 million substation that will supply the new $36.7 million R&D facility at the Baker Hughes Claremore plant. 
The TIF is expected to open up other opportunities for growth and development in the area and has already sparked some interest beyond Baker Hughes.
An applied technology business in the natural gas industry is looking to make a $10 million investment and create approximately 100 new jobs in the area, according to officials.
The council fully supported the measure to move the TIF forward as the last item was to secure the financing for the district. The city will be financing the TIF district through the use of the Hospital Trust Fund as facilitated by the Claremore Public Works Authority.
The total debt service, principal and interest, on the fund will be $4.633 million with a 10-year term.
Payments will begin in June of 2014 providing time for construction on the facility to be completed and for revenues to be received by the city.
The city will use both ad valorem and electric revenues to repay the financed amount.
“This project will expand our (the city) electric revenue. It is expected to be $30,000 per month, plus the ad valorem on top of that,” said Councilor Bill Flanagan.
If revenues do not meet the payment obligations then the CPWA will ultimately be responsible for the fund, according to CPA Ron Kolker.
Kolker added that this is unlikely, but dependent upon interest rates and electric usage.

Text Only
Government