Incentives OK’d for $37 million retail project in Broken Arrow

By John Dobberstein, Editor

The Broken Arrow City Council approved tax incentives Monday for a proposed 200,000-square-foot retail project to be located in the Hillside Drive corridor.

The city is coordinating with the Parkes Development Group to establish a tax increment finance (TIF) district to provide sales tax sharing back to the $37 million development that would expand Adams Creek Town Center.

Parkes Development Group is a subsidiary of The Parkes Companies, a national developer that specializes in large-scale retail development projects.

The project is proposed on 22 acres along the north side of East Hillside Drive, just east of Lowe’s and south of the Stonebridge Park subdivision. Preliminary information suggests retail and restaurants will be the focus of the development. Lowe’s, Target and Cinemark are major retail destinations in the area.

The city and Realtors have been marketing the site for many years but development hasn’t occurred there, while other parcels all around it have been. The city said development has been difficult because of “significant costs” associated with infrastructure and utility needs to support the project.

Sales tax revenue from the TIF will be used to implement the project and reimburse project costs directly and/or to issue bonds or notes to pay project costs and to retire bonds or notes.

The TIF will capture new Broken Arrow sales tax only, not ad valorem taxes. The city will incentivize the development by providing a sales tax rebate of 2% sales tax. The maximum incentive is $16 million, payable based on actual new sales tax collections, and the TIF will have a 23-year time limit. But the TIF could end early when the full $16 million rebate is paid, possibly by 2038.

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The Franklin, Tenn.-based developer projects $1.41 billion in gross taxable sales over 23 years. Projections show $50.2 million in total new Broken Arrow sales tax over the period and $28.3 million generated for TIF project costs, which is limited to $16 million.

Nearly $22 million in sales taxes would go to the city, plus the excess over the $16 million of reimbursements, and the development could bring $10.2 million in new ad valorem taxes.

An estimated $477,800 per year would be generated upon full buildout benefiting local anc county institutions, including Tulsa Community College, Tulsa Tech, the Tulsa City-County Health Department, Broken Arrow Public Schools and the Tulsa City-County Library.