By Conrad Dudderar
With significant commercial growth expected after construction of a new Interstate 40 interchange, the Yukon City Council has adopted a plan for an estimated $43.5 million Frisco Road/Vandament economic development project.
A second public hearing on the proposal, funded through a new tax-increment financing (TIF) district, was Dec. 3 inside the Centennial Building. The plan was adopted unanimously by council members.
Presentations about the proposed economic development project, spurred by a future Frisco Road / I-40 interchange, have been made in recent weeks to Yukon’s city council, planning commission and economic development authority. Construction of the new interchange is expected to start in summer 2020.
Jeff Sabin, a partner at the Center for Economic Development Law, worked with city officials and staff to develop a new TIF district along Frisco Road north of I-40 and north of the curve on Vandament Avenue.
“The area is currently undeveloped,” Sabin said. “The (City of Yukon) was approached by a developer who owns part of the land within the proposed area for a commercial mixed-use project.
“It’s currently still in the development stages but it’s anticipated to feature restaurants, hotels, a large retail complex, some office buildings, and an entertainment feature.”
A $43.5 million project budget is based on information provided by the “proposed developer”, according to Sabin.
By creating Yukon’s second TIF district, the City of Yukon will be able to use a portion of new, undedicated sales tax revenues to fund major infrastructure and drainage improvements required to serve the proposed economic development project.
The project qualifies as a “reinvestment area,” which Sabin explained is an area “that needs significant public improvements to attract major investment or expand employment.”
Plans call for the City of Yukon to apportion 90 percent of funds generated from the city’s undedicated sales tax, 1.8 percent, for project costs.
The cost budget covers:
- $6.5 million for public improvements: Transportation, infrastructure and public amenities.
- $35 million for public financing assistance: Land acquisition, public improvements that are privately constructed, tenant improvements, and job creation incentives.
- $1 million for project implementation: Administrative costs, organizational costs, and design/legal/engineering costs of setting up the TIF district.
- $1 million contingency.
Estimated private investment for the Frisco Road/Vandament economic development project is $70.7 million.
Based on the proposed 670,000 retail square footage, Sabin said the project would generate between an estimated $414,000 in sales tax revenues annually “in the near term” up to $4 million annually “over the longer term”.
Yukon’s first TIF district, south of I-40 and east of Frisco Road, includes a large retail power center west of Garth Brooks Boulevard and a tract of land owned by the Catholic Archdiocese.
“Our first one on the south side of I-40 has worked out well,” Mayor Mike McEachern said. “I’m looking forward to seeing what all is going to happen there on the north side.”
The only public revenues affected by this project will be the City of Yukon’s undedicated sales tax portion in the TIF district and the other taxing jurisdictions will receive the full benefits of the new development, according to Sabin.