Members of two City of Lawton boards have launched the process that could add a new tenant and its $100 million project to Lawton’s west industrial park.

The City Council is slated to act on a recommendation Tuesday from the Lawton Economic Development Authority (LEDA). LEDA members discussed and approved an agreement between itself and an unnamed developer who wants to make a $100 million investment to purchase land and build a facility in the west industrial park, adding 100 new jobs with an average annual compensation of $66,000 per position.

LEDA and City of Lawton officials have not released the agreement, saying details still are being finalized and that the name of the developer cannot be revealed yet. LEDA discussed the issue in executive session Thursday before voting in open session to approve a resolution that approves the agreement among LEDA, the City of Lawton and the unnamed developer (designated industrial developer — entity) in the document. LEDA will be overseeing the project for the city.

The agreement specifies creation of a Tax Increment Financing (TIF) district for the unnamed developer, under the same process LEDA and the council recently used to create a TIF for Republic Paperboard, which is planning a $94 million expansion of its west Lawton industrial park plant. TIF districts allow developers of new or expanding developments to reclaim a portion of the increased ad valorem and sales/use taxes generated by the investment that makes their property more valuable.

This TIF would be the fourth in Lawton and the fifth for Comanche County.

In this case, the unnamed developer would receive $3 million from the TIF district, under the terms of the agreement. Community Services Director Richard Rogalski told LEDA members Thursday that the entity also will qualify for up to $21 million from the State of Oklahoma as an economic development package.

Rogalski and LEDA Chairman Fred Fitch called the economic development agreement a “first step,” with both men saying it is likely the document will be amended before a final version is set into place. Rogalski said substantive changes will be brought back to LEDA and the City Council or approval; minor changes will not.

“I suspect you will see it again,” Rogalski told LEDA members.

Rogalski said the unnamed developer has not yet specified which of the TIF districts in the west industrial park it wants. A Skills Training, Education, Development and Investment (STEDI) project plan adopted by the council in December sets 13 potential TIF tracts; four in the Airport Industrial Park and nine on west Lawton industrial land, including one already designated for Republic Paperboard.

Ron Nance, a LEDA member who also chairs the Lawton Economic Development Corporation, said that entity “has a general idea” where the development will be, but the exact location has not been set.

According to details that LEDA would release, the agreement specifies construction on the tract will begin in the third quarter of 2020, with construction to be completed in 18 months. Operations are to begin within three months of completion.

Under the terms of the agreement, LEDA is to monitor the project (as it will with Republic, at the council’s directive). The $3 million to be designated to the new entity will be payable as a cash advance by the City of Lawton to LEDA (using funds in the 2016 Capital Improvements Program), with LEDA to repay the city through annual payments financed by ad valorem taxes and sales/use tax.

The developer has agreed to reimburse $900,000 of the $3 million in assistance in three payments of $300,000 each: when construction begins, when construction ends, and when 100 full-time employees are hired.

LEDA will make the repayment to the City of Lawton via the increased tax revenue that results from the project.

LEDA is not obligated to repay its annual financial obligation beyond any money that is not collected, meaning LEDA doesn’t have to pay more than what it collects in annual ad valorem taxes. It is the same specification that members insisted be included in the economic development agreement with Republic. LEDA is obligated to remit 75 percent of the ad valorem revenue to the City of Lawton, up to 25 years (the maximum life of a TIF).

The agreement also allows the new developer to have 10 percent of the sales tax, as an incentive for better reporting.

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