220605-news-tif 4.jpg

Cranes lift a wind turbine blade from a rail car at the TP&L facility on South 66th on Aug. 27, 2020. (Billy Hefton / Enid News & Eagle)

ENID, Okla. — The wind energy company company waiting in the wings for Enid’s two TIF district proposals to be approved this week could stand to eventually receive millions of dollars in incentives to cover the state’s so-called stack tax.

About 65% of new potential ad valorem tax revenue generated over 20 years would be allocated to offset the Transportation Partners and Logistics paying the state’s inventory tax, as part of the proposed extension of one of the city of Enid’s current tax increment finance districts, according to the city.

If the current TIF district No. 7, created in 2016, is extended through 2036, the company would receive a total $14.28 million as an inventory incentive on its wind turbine parts stored at its laydown yard off 66th.

At the to-be-created TIF district No. 9, the company Takkion — which now owns TP&L — would receive an additional $500,000 in inventory incentive funding once it develops a new remanufacturing facility in the former Chesterfield Cylinders building site off South 54th.

When both districts expire, a combined $29 million in revenue — $24 million in No. 7 and $5 million in No. 9 — is expected to be generated from projected value increases that owe to the company’s development projects.

To date, $3.57 million has been paid in TP&L’s incentive, according to the city.

The captured increases in tax revenue from the area likely wouldn’t occur without the promise of a potential business development, Nate Ellis, the city’s TIF legal counsel, said during a city planning meeting Monday night.

Over the last five years, the company has stored around $400 million of assets at its laydown yard, Ellis said.

A 4.5% state use tax is imposed on tangible personal property purchased or brought into the state for storage, use or consumption that is not subject to the sales tax.

“Whether or not they owe inventory (tax) is a function of how long they have it out of service,” Ellis said.

Nearly $10 million total of existing baseline revenue will also be allocated to the area taxing entities, including $5.7 million to Pioneer-Pleasant Vale Schools and $1.1 million to Autry Technology Center.

The No. 7 district was first created in 2016 to offer an incentive on the state of Oklahoma’s levy on personal inventory, which would’ve otherwise encouraged TP&L to develop a site in Kansas.

Members of the city’s Metropolitan Area Planning Commission on Monday unanimously approved recommending city commissioners approve both proposals the following night.

MAPC Commissioner Cole Ream, also a member of the TIF districts’ review committee, said the district proposal is “the last step” for the company Takkion to consider relocating in Enid, similar to the district No. 7’s creation in 2016.

Ream said the company’s other option has, again, come down to Garden City in Kansas, a state that, unlike Oklahoma, doesn’t have what Ream called a “stack tax.”

“Even with diesel being up, the stack tax really eats into (Takkion’s) bottom line, versus $5.15 a gallon diesel,” Ream said. “They’d like to be here, but they have to look at the balance sheet just like everybody else does.”

The city of Enid is expected to finalize the months-long TIF creation process Tuesday when Enid city commissioners vote to approved both proposals, following a second public hearing.

Click for the latest, full-access Enid News & Eagle headlines | Text Alerts | app downloads

Ewald is copy editor and city/education reporter for the Enid News & Eagle.

Have a question about this story? Do you see something we missed? Send an email to aewald@enidnews.com.

Locations

Trending Video