House Supports Legislation That Would Renew Tax Credit for High-End Economic Development Projects
OKLAHOMA CITY (21 March 2017) – Economic development legislation that would enable the state Tourism and Recreation Department to offer inducements to private companies to create or expand high-dollar “tourism attractions” received overwhelming support from the House of Representatives.
House Bill 2131, the Tourism Development Act, was endorsed 84-5 by the House on Tuesday and will be transmitted to the Senate for consideration. Two dozen House Democrats joined 60 Republicans in support of the proposal.
The bill is intended to “take facilities that are not generating any taxes” – including the now-vacant First National Bank building in downtown Oklahoma City – “and make them tax producers” via public-private partnerships, House Majority Floor Leader Jon Echols said.
HB 2131 stipulates that a qualifying project must attract at least 25% of its visitors from out-of-state, cost at least half a million dollars, have a “significant and positive impact” on this state, be open and operating to the public on a “consistent basis” and not adversely affect employment.
The bill defines a “tourism attraction” to mean:
- a cultural or historical site
- a recreational or entertainment facility
- an area of “natural phenomena or scenic beauty”
- an indoor or outdoor play or music show
- a botanical garden
- a cultural or educational center, or
- a destination hotel whose location and amenities make the hotel itself a destination for tourists.
HB 2131 “would not cost the state anything,” said Echols, R-Oklahoma City. A developer would be allowed to retain sales tax proceeds equal to 10% of the approved costs on any project that was priced at less than $1 million, or 25% of the sales tax proceeds from any tourism project costing more than $1 million, HB 2131 provides.
The tax credits would be capped at a collective total of $15 million per year and would expire after two years, although the executive director of Tourism and Recreation could extend the credits for up to four more years under certain circumstances.
The bill specifies that approved costs would include obligations incurred for labor and to vendors, contractors, subcontractors, builders and suppliers in connection with the acquisition, construction, equipping and installation of a tourism attraction project; the cost of procuring real estate or rights in real property in connection with a tourism attraction project; all costs of architectural and engineering services; costs associated with the installation of utilities in connection with a tourism attraction project, including water, sewer, sewage treatment, gas, electricity and communications.
HB 2131 would restore, at least in part, tax credits that expired two years ago, Echols indicated.
Renovation of the First National Center will be a catalyst for “bringing life to the heart of downtown” Oklahoma City, said Gary Brooks president of Cornerstone Development and owner of First National Center.
Redevelopment of the 33-floor building will create an estimated 1,585 construction, hotel, and retail/commercial jobs from the start of construction through operations, Echols said. In addition, more than 700 people “will permanently live and work in the renovated building,” Brooks said.
Cornerstone Development, in a partnership with Rose State College and the City of Oklahoma City, will provide environmental training to produce applicants to work on the First National site during the renovation. “This training could act as a catalyst for Rose State College in their proposal to combine asbestos abatement training with the wastewater training in their 2017 grant application to EPA for Environmental Workforce Development and Job Training,” said Amanda Alewine, associate planner with the City of Oklahoma City.
Cornerstone also has pledged to reserve space within the project for a business incubator “that can assist both entrepreneurial startups as well as existing small businesses,” Brooks said. Discussions are under way for the Small Business Development Center of Oklahoma, headquartered at Durant, to assist in operating and supporting the incubator, he said.
MIKE W. RAY
Media Director, Democratic Caucus
Oklahoma House of Representatives
(405) 962-7819 office
(405) 245-4411 mobile