Tax Increment Finance (TIF) Districts in Chickasha

Updated October 2024

On September 3, 2024, the Chickasha City Council approved the “Gateway to Chickasha” Economic Development Project Plan, which created two new tax increment finance (TIF) districts. These districts are not yet active. The first district (TIF A/TIF #2) will become effective January 1, 2025.

What is tax increment financing?

Tax Increment Financing (TIF) is a public tool that reallocates newly generated tax dollars for up to 25 years for supporting development or redevelopment in certain limited areas of a city, town, or county. In Oklahoma, the terms and conditions for using TIF are provided in the Local Development Act (62 O.S. §§850-869).

—Oklahoma Department of Commerce
A simplified graph illustrating the the existing tax base, potential captured increment during the TIF, and new tax base after the TIF.

The TIF captures some or all of the increase (increment) in tax revenue generated over a set period of time within a specific area. This funding is then available for use in public improvements, and/or certain other purposes outlined in state law and specified by the public body. It does not increase tax rates.

The “But For” Rule

The objective of a TIF district is to enable development that would not happen otherwise—i.e., “but for the TIF, this development will not take place.” In creating the TIF, the city has indicated that the improvements and incentives are necessary to the development of these areas.

What is the project plan?

Chickasha TIF Project Plan 6/12/2024Download

The plan approved by the City Council designated two new TIF assessment districts—one containing most of the downtown district, the other including properties along Highway 62 and Grand Avenue on the east side of town, near Interstate 44.

Chickasha has had one TIF previously (now expired). If approved, the proposed districts would be identified as TIF#2 and #3. In the interim, the proposals are identified as A and B. The city council may choose to activate both, either, or neither at any point in the next 10 years.

Update: On October 21, the City Council adopted a resolution setting the effective date for TIF A as January 1, 2025. TIF A will become TIF #2.

TIF A: Downtown

TIF A will capture the benefit of redevelopment in Downtown Chickasha, including the new developments in the Depot area. It runs from 6th St. in the west to the far side of 1st St. in the east, and includes both sides of Choctaw, Chickasha, and Kansas (and some of Iowa).

TIF B: Highway 62

TIF B will capture new development in Chickasha’s east entryway. It includes largely undeveloped properties along Choctaw Ave./US-62 coming off Interstate 44, as well as along the eastern loop of Grand Avenue.

Generally speaking, the properties carved out of the above assessment areas are tax exempt or are not expected to increase in value, and thus would not contribute to TIF revenue.

  • 50% of ad valorem, sales, and hotel tax increment captured in the TIF districts will be retained for project costs. The remaining 50% would be returned to the city, county, and schools.
  • The revenue from sales and hotel tax would be potentially matched by state dollars through the Leverage Act, doubling its impact.

What will it accomplish?

City leadership and the EDC have identified utilities and infrastructure to be among the greatest barriers to new development in Chickasha. TIF is a tool that can generate funding for infrastructure projects that the city cannot currently afford.

The identified project costs for the TIF include:

  • $551.6 million in infrastructure improvements to support new development
    • $153.9 million for Water System Improvements
    • $141.4 million for Sewer System Improvements
    • $33.3 million for Storm Water Drainage Improvements
    • $131.1 million for Street and Bridge Improvements
    • $91.9 million for ~20% Contingency
  • $650,000 in direct or administrative costs
  • $30 million for development finance, i.e. reimbursement of some portion of project costs
    • Allocated from potential Leverage Act matching funds
    • See FAQ
  • Interest and financing costs related to debt issuance

These numbers represent the total of all possible eligible projects. The City of Chickasha is not obligated for the full amount, but will approve debt issuance and use of TIF revenue on a per-project basis as normal.

By investing in Chickasha’s development in this way, all parties will benefit from the residential, commercial, and tourism growth enabled by these infrastructure improvements. The proposed project area is shown below.

The project area is defined very broadly for simplicity. While all projects will be contained in the area, not all of the area will necessarily have projects.

What is the timeline?

  • TIF Committee Formed – December 2023
  • TIF Proposal Drafted – January–June 2024
  • Committee recommendations & Public Hearings – June–August 2024
  • Approved by City Council vote – September 3, 2024
  • TIF #2 (A) Effective Date set – October 21, 2024
  • TIF #2 Effective Date – January 1, 2025
  • TIF #2 Expiration Date – June 30, 2050

Other Frequently Asked Questions

No. The TIF does not create a new tax or raise tax rates.

There is no added cost to property owners. The TIF revenue comes from assessed values increasing due to voluntary improvements made to the property. If no improvements are made, and the property value remains consistent, there is little effect.

Property owners will pay the same ad valorem tax rates, based on property value, as they would without the TIF.

The tax revenue captured by the city, county, schools, etc. from affected properties will not decrease. 50% of the increment will be returned to the taxing entities according to normal millage rates, meaning that they will still benefit from improvements to the district.

Additionally, the increment revenue returned to Chickasha Public Schools is excluded from the state funding formula, and therefore does not affect OSDE allocations.

The City of Chickasha will manage the funds generated by the TIF according to the guidelines set by the approved project plan. Individual projects and incentives will be subject to City Council approval as usual.

The EDC assisted in the research and promotion of the TIF but has no authority in the decision-making process.

TIF revenues may be spent only for publicly approved project costs within a specific geographic area, known as the Project Area. The Local Development Act defines project costs to include a wide range of public expenditures including:
  • Cost of public works, public improvements, land acquisition, clearance, and grading
  • Financing, professional services, administration, interest fees
  • Assistance in development financing for private projects
(Source: Oklahoma Dept. of Commerce)
The projected increment in the TIF area amounts to:
  • $10.54 million in ad valorem revenue
  • $57.2 million in sales and use tax revenue
  • $3.44 million in hotel tax revenue
Half of the above amounts would be returned to taxing entities, so a total of $35.6 million would be allocated to TIF projects. This could be matched by up to $30.32 million in state funds.
The city will have the option to offer development finance incentives. If a private developer wishes to perform certain infrastructure improvements that benefit the public as well as their business, the city may reimburse a portion of the developers' costs upon completion. These incentives would be subject to a development agreement between the city and the developer and approved by City Council.

The City Council may choose to activate the TIF districts at any time up to 10 years from the adoption of the project plan. They may be activated together or separately.

The effective date for TIF A (TIF #2) has been set as January 1, 2025. The effective date for TIF B is to be determined.