CITY OF EDMOND, OKLAHOMA ANNUAL FINANCIAL REPORT June 30, 2021
anticipated sometime during the 2022 calendar year that a request will be made to extend the start date of this payment to reflect the adverse impact placed on the hospitality industry as result of the Covid virus. Many banks and real estate leases have been restructured as a result of the virus. This request to extend the lease payment would be similar to those restructurings. Management of the conference center has been contracted to a third party. In return, the City pays the hotel manager a monthly management fee and office space rental for Visit Edmond which is equal to the monthly hotel tax collected at this facility only. The initial infrastructure improvements which included streets, storm sewer connected with the streets, water and sewer extensions were funded by the City up to $2 million with the developer paying the cost which exceeded the $2 million limit. An additional agreement was established which constructed an enclosed storm sewer through the property that was previously an open drainage way. Making this improvement, at this time, allowed for expansion of the Conference Center in the future. Pursuant to the agreement the City paid the additional expense of the storm sewer pipe not to exceed $1 million. Additionally, the City previously purchased additional land along the corridor in a separate transaction for $2 million for the purpose of developing a sports complex. A ground lease agreement was entered into with a tenant, who will construct the facilities. The tenant has paid the City monthly rentals of $5,000 since as required by the agreement. The tenant has the right to purchase the land for $2 million at any time, if certain conditions are met as stated in the agreement. Alternatively, the City has the right to require the tenant to purchase the land for $2 million on the fifteenth anniversary date of its opening. Both projects have terms that are not within the normal and customary practices of the City, and therefore other than normal credit risks are involved, the City will classify these agreements as operating leases and no additional provisions have been recorded in the accompanying financial statements because of these agreements. In May 2020, the City entered into an agreement with a developer for the development/redevelopment of property in the area of 2nd Street and Santa Fe Drive. The City has agreed to provide infrastructure improvements (consisting of the parking lot with associated lighting and landscaping, alley paving and sidewalk improvements in the rightof-way) up to a cost of $700,000. All cost in excess of the $700,000 shall be paid by the developer. The project is being funded by the Edmond Electric Development Fund. The portion of the cost of the improvements which is attributable to the cost to pave the alley (estimated at approximately $150,000) is being provided in anticipation of being recouped in sales tax generated by the Project. If the project does not generate $5,000,000 annually in local retail sales for six consecutive years, the Developer shall be required to reimburse the City the percentage of the amount uncollected. In July 2020, the City entered into an agreement with a developer for the development of property in the area of West First Street. The City has agreed to provide infrastructure improvements (consisting of streetscape, lighting, utilities, drainage/stormwater, sewer, and landscaping) not to exceed $2,000,000. All cost in excess of $2,000,000 shall be paid by the developer. The project is being funded by the City’s Capital Improvement Project Sales Tax funds. In addition, the EPWA and City will work with other taxing jurisdictions to prepare and consider approval of an increment district under the Local Development Act, 62 O.S. § 850 that will include sufficient authorizations to reimburse or replenish the City’s Capital Improvement Project Sales Tax Funds. 4.E. Tax Abatements The City enters into sales tax rebate agreements with local businesses as allowed in the Oklahoma State Constitution, Article 10, Section 14. Under this law, the City may establish economic development programs and provide sales tax increments for development as part of its economic development plan. The sales tax rebate program allows a developer to receive rebated sales tax in varying amounts. To be eligible for this program, the project area should be occupied by occupants operating a new business of a requisite quality. The sales tax rebate period varies with each agreement. Due to confidentiality laws in Oklahoma statutes Title 68, Section 1354.11, the amounts of sales taxes rebated will not be disclosed. The following businesses had sales tax rebate agreements with the City as of June 30, 2021:
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