POSTED ON JULY 4, 2007:
Money Where Mouth Is?
Since Kaiser and his other moneybag cronies are so rich and smart, why don't they develop the riverfront themselves?
While Tulsans have been saying for five years or more that improvement of the Arkansas River and development alongside it was a top priority, our civic establishment -- the mayor, the County Commission, the Chamber of Commerce, the monopoly daily newspaper -- have put their pet projects ahead of the river.
In July 2002, Mayor Bill LaFortune convened a "vision summit" on his 100th day in office. Eleven hundred Tulsans gathered to share their dreams for Tulsa's future. River development was a frequently recurring theme in the list of ideas that were gathered that day -- not just passive recreation, but waterside retail and entertainment, a demand inspired by the success of San Antonio's Riverwalk and Oklahoma City's Bricktown Canal and by plans for development along Jenks's riverfront near the Oklahoma Aquarium. Interest in riverfront development far outstripped demand for a new downtown arena.
Just two months later, INCOG, our regional planning agency, started developing a master plan for the river. But rather than expediting that process, our civic leaders put it on hold, and the "dialog/visioning" process became the "how do we buy off enough constituencies to get an arena tax passed" process. The river planning process wasn't restarted until right after the September 9, 2003, Vision 2025 vote.
A token amount -- about 1 percent of the total -- was included in Proposition 4 to build two low-water dams and an upstream catch basin and to fix the Zink Lake shoreline.
Rather than voting no and waiting for completion of the Arkansas River Master Plan and a funding package focused on implementing it, Tulsa County voters approved the Vision 2025 sales tax.
Two years later, voters approved a renewal of the "Four to Fix the County" sales tax, which likewise devoted just over one percent of the total to a river related project. The latter tax passed despite the feisty "Do the River First" campaign led by attorney David McKinney.
One could interpret these votes as an indication that Tulsans don't care as much about the river as we've assumed. But it's more likely that, confronted with a perceived choice between doing something now and doing nothing at all (rather than doing something better later), and pushed along by an expensive PR campaign funded by the very businesses that would profit handsomely from the passage of these taxes, they opted to do something.
By voting yes in those two elections, Tulsa County voters committed a 0.6 percent sales tax through the end of 2016 and a 0.167 percent sales tax through September 2011.
Now that we finally have a master plan, rather than waiting for either of those taxes to expire, Tulsa County Commissioners are being asked to put forward another sales tax rate increase in order to fund implementation of part of the river master plan.
Now that Tulsa County voters have already committed so much money toward quality of life enhancements, will we be willing to approve another $277 million in taxes to get river development?
Before the proposal goes to the voters, it has to get the approval of at least two of the three county commissioners, all of them Republicans. But supporting a sales tax vote would put them at odds with the party's grass roots.
In February, the Tulsa County Republican Convention adopted a platform that included two resolutions pertaining to taxes and river development:
"We oppose increasing taxes to fund river development projects. We support the use of TIF districts to facilitate river development . . . We urge Tulsa County Commissioners not to propose any increase in county sales tax."
Although the three commissioners addressed the convention and persuaded delegates to remove a plank supporting the City of Tulsa's annexation of the Fairgrounds, none of them spoke against these anti-river-tax resolutions.
The specific projects to be included in the proposed $277 million tax increase haven't been formally released -- at least they don't appear to be available on the World-Wide Web -- so I'll defer discussion of the nuts and bolts to a later column. The details that have been made public aren't entirely consistent with the claim that the proposal implements the Arkansas River Master Plan. For example, the plan calls for a vehicular bridge at 41st Street, while the tax rate hike would pay for only a pedestrian bridge.
And it appears that Tulsa County voters will be asked to tax themselves again for projects they thought they had already paid for.
The ballot resolution for Vision 2025 Proposition 4 specifies $5.6 million to "[c]onstruct low water dams on Arkansas River the locations of which will be determined in the Arkansas River Corridor Plan." That's "construct," not "design," as is now being claimed.
It also called for $1.8 million for "Zink Lake Shoreline Beautification and $2.1 million to "[d]esign and construct Zink Lake Upstream Catch Basin and silt removal." Keeping those promises means funding them with the Vision 2025 sales tax money that the voters have already approved, and not including them in yet another tax package.
The County Commission may act in August to put this proposal before the voters in October. The urgency for action is being driven by a commitment from the George Kaiser Family Foundation to raise $100 million in private matching funds for enhancements along the river.
That's a big, exciting number, but only if the money is going to pay for things that Tulsans really want. And it's unclear exactly what hoops taxpayers will have to jump through to meet the conditions for the private grants. Does the tax-funded package have to include exactly the projects proposed? Do we have to fund at least $277 million with tax dollars?
There's reason to believe that Tulsans would be just as happy with a mixed-use private development on the west bank near the 23rd Street bridge. Dollars captured by a TIF might cover the cost of land acquisition plus basic infrastructure improvements.
The concrete plant just north of the bridge has about a quarter-mile of river frontage, nearly as much as the currently-open section of Jenks' Riverwalk Crossing, without encroaching on the festival grounds or the Westport Apartments. Until March of this year, backers of The Channels had an option to purchase the property for $37 million.
City land south of 23rd would increase the river frontage to a full half-mile, as long as that used by Branson Landing, a TIF-financed development often mentioned as a model for Tulsa.
It's rumored that Mayor Kathy Taylor won't support a riverfront TIF because of a likely rival development downtown. Two groups are vying to assemble land for a mixed-use development in the eastern part of downtown, and one or both may request the establishment of a TIF to help with land acquisition, utility improvements, and the construction of a major facility, such as a baseball stadium. It's thought that a mixed-use development on the river near downtown would hurt the viability of a similar development in downtown.
Perhaps the City of Tulsa should hold a referendum and let the voters choose -- would you rather have the city use a TIF to support riverfront development or east downtown development?
Maybe we don't need a sales tax increase or a TIF district at all. Here's an idea that won't make bond adviser John Piercey or the folks at Manhattan Construction, Flintco, Matrix, and PMg happy -- some of the business interests that would likely benefit from another big project funded by a county sales tax -- but it might give Tulsans what they want in the way of riverfront development without the need for hundreds of millions in tax dollars and private grants.
We keep hearing that all this public tax money and private donations should lead to massive private investment. Why not start with the private investment?
Instead of gathering $100 million in charitable contributions as a lever to get Tulsans to raise their tax rates once again, what if George Kaiser were to assemble the capital needed to develop a riverfront mixed use district -- retail, entertainment, hotel, and residential? It's what people seem to want, and if it's as successful as everyone seems to think it would be, Kaiser and the other investors would get their money back, and then some.
See, one of the obstacles to mixed-use development is that conventional lenders don't know how to evaluate the viability and value of mixed-use projects. Bulldoze-and-build subdivisions, office buildings, tilt-wall industrial space, and strip shopping centers are all known quantities, but a mixed-use project has too many variables, too many unknowns. Worse still, mixed-use loans are hard to pool for resale on the secondary market. (See the February 2003 issue of The Next American City for details.)
Someone with deep enough pockets and business acumen could bypass the limitations of conventional finance and build a daring, visionary mixed-use riverfront project, blazing a trail that risk-averse conventional developers might later follow.
(Yes, I've suggested this before -- see the October 19-25, 2006 issue. I'll keep suggesting it until someone actually does it.)
It's counter-intuitive, but having someone take the lead in an unconventional for-profit venture may provide more of a boost to the City of Tulsa than a massive private donation.
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