The City of Oklahoma City Council took action Monday on how CARES Act funds sent to the city from the federal government would be used.
They also heard a new proposal for spending $3 million as an incentive for Costco to develop a call center in the city. Several Council members had questions about the details of the deal.
The Council heard an item about spending $2 million in Tax Increment Finance (TIF) funds on a new apartment complex raising questions about the meaning of the word “affordable.”
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The Council heard a presentation about a potential call center and e-commerce hub for multi-national corporation Costco. The Oklahoma City Economic Development Trust (OCEDT) proposed a Joint Resolution with the Council to allocate an incentive payment of $3 million dollars for “quality job creation.”
It’s not the first time Costco incentives have been brought before the Council by Cathy O’Connor. She is the City’s former assistant city manager and now President and CEO of The Alliance, Inc. a private organization not subject to open-records requests that arranges deals between private entities, the City, and the OCEDT.
In 2018, O’Connor brought the original $3 million dollar incentives package to the Council to lure Costco to the metro.
The then Ward 2 Councilman Ed Shadid argued against the deal. He called the idea “stupid” arguing that Costco would come to the metro anyway.
But, the Council approved the deal and Costco came to Oklahoma City. The store is at 13200 N Western Ave in Oklahoma City and has won many city customers.
The new Costco facility is planned to open with over 500 employees. The expectation is to add to those employees to a total of over 1,000 in the first three years. The average wage of these jobs is approximately $59,000/year.
Ward 6 Councilwoman JoBeth Hamon, who married this reporter at a coffee shop one year ago tomorrow, asked O’Connor and the Costco representative several questions.
Hamon asked if there were also state incentives to bring this business to Oklahoma. It was explained that there are state incentives and that Costco has applied for those as well. Receipt of both will be necessary for Costco to locate their call center in Oklahoma City. The amount of the state incentive has not yet been made public.
Hamon cited the Costco representative’s declaration of Costco as being a socially progressive company and asked if they participate in any “ban the box” programs. “Ban the box” refers to efforts to remove the felony conviction question from initial job applications, as studies show that most applications indicating a past felony conviction are discarded out of hand.
Costco participates in such programs only where required by law. “We sell medicine and other controlled substances such as alcohol. We believe it’s important to know we’re hiring safe people for these positions,” a Costco representative responded. There was no follow up on the recidivism rates for people hired in those locations where “ban the box” is a matter of law.
Hamon and Ward 2 Councilman James Cooper asked if the proposed location would be accessible via public transit, as transit has proven to be a barrier to employment with other job incentive projects brought to Oklahoma City. O’Connor said the proposed site is a five-minute walk from a bus stop.
Ward 7 Councilwoman Nikki Nice asked if these positions are degree-preferred. The Costco representative stated that he didn’t have that information available at present but would return with an answer.
The Council unanimously approved the resolution to be set for public hearing with final consideration by the Council on May 26.
The Council approved the introduction of the resolution for later hearing.
CARES Act Funds
A lengthy and complicated agenda item was explained in some great detail by Chris Varga of the Planning Department. The recently passed CARES Act released a significant amount of money to Oklahoma City in the form of Emergency Solutions Grants (ESG) and Community Development Block Grants (CDBG).
The $2-trillion-dollar Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress with bipartisan support and signed into law by President Trump on March 27th, 2020.
The grants will be administered by the Planning Department and local agencies. The money includes the following:
- $1.3 million for non-profits that have lost revenues or experienced an increase in service demands due to the pandemic
- $300,00 for non-profit arts programs to be administered by Allied Arts
- $1,000,000 in housing and utility payment assistance to persons with low to moderate incomes
- $250,000 for legal aid services for people facing eviction due to the pandemic
The resolution also waives certain HUD requirements about administrative costs for the coming fiscal year to respond to complications brought on by the crisis.
The Council heard an item from OCEDT for the introduction of a resolution to allocate $2 million dollars of TIF money and $2,000,000 from the Oklahoma City Affordable Housing Funds for a new project titled the 700 West project.
This project proposes to build a 300 unit housing complex at Northwest 4th and Shartel, to include 72 units deemed “affordable” by the Developer. The “affordable” units are to be “workforce housing.” The affordability index for such housing is 80% of Area Mean Income (AMI), an amount deemed by Fannie Mae to be approximately $58,000/year for the proposed area.
The developer says the incentive money is necessary because private lenders won’t lend without meeting parking requirements determined by those lending institutions. The developer pointed out that parking requirements have reduced from the past. It used to be one and a half parking spots per unit, not it’s one.
Ward 2 Councilman James Cooper brought a resolution for consideration of the Council to declare that the Covid-19 pandemic is an emergency.
The resolution states that in order to address it properly, the federal government needs to implement mass testing and contact tracing.
Additionally, the resolution calls upon the federal government to provide appropriate amounts of personal protective equipment for the safety of medical professionals responding to the crisis.
Finally, the resolution calls on the federal government to provide financial assistance to municipalities so that they can reopen safely and without undue haste.
The resolution started an hour-long discussion wherein Councilmen Stonecipher (Ward 8), Greenwell (Ward 5), and McAtee (Ward 3) all stated they wouldn’t support the resolution.
The ordinance passed 4-3 with Ward 4’s Councilman Todd Stone joining Cooper, Hamon, and Nice to vote to adopt the resolution. The Mayor and Ward 1 Councilman James Greiner were absent for that portion of the meeting.
The Council meets again on May 26, 2020.
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