The Enid News and Eagle, Enid, OK

Local and State News

September 28, 2013

Incentives for business run gamut of needs

ENID, Okla. — Johnny Peart doesn’t see the quarter-million dollars’ worth of incentives offered by the city as a necessity to open his renovated Broadway Tower Hotel.

He does, however, believe it creates two things: a kick-start, and also confidence that the city supports his project.

And while some economic development tactics could be icing on the cake to attract business to Enid, several beneficiaries of public money will say that without it, opening the doors is impossible.

Northstar Agri Industries, which is building a canola processing plant in Enid, is one of those that might have gone elsewhere without help.

Officials with the city – in consultation Garfield County officials, the local public school district and others – approved a deal that will redirect $27 million from new property taxes on the plant toward infrastructure improvements and construction of the facility.

 

Essential?


Northstar President Neil Juhnke said that without the incentive, called a Tax Increment Finance district, his company would have passed over Enid.

“Without the support from the city, it really would overburden the project with capital expense and it just wouldn’t be possible to build,” Juhnke said.

Contrast that with Peart. The Niagara Falls, N.Y.-native already bought the tower and began renovations for a boutique hotel before he asked for $286,520 in sales tax rebates and fee waivers. For each new dollar the hotel brings in, his company will get a percentage back from the city.

The incentive wasn’t needed to start, he said, “but it can affect the degree to which we finish.”

Peart also said city leaders can show support for the investment not just through words, but with cash.

“It shows that you’re behind us, and it gives us confidence.”

Randy Breitenkamp with Fence Solutions Inc. received two separate incentives, including a $100,000 loan to help purchase a patent.

“Any time you can get some help to start a business from scratch, it’s a big plus for you,” Breitenkamp said.

Since partnering with ERDA in 2010 to buy a building for its operation, Fence Solutions has added two machines and several part-time workers to run them. Breitenkamp said his fence post clips and clamping tool recently showed up in more than 100 stores in Texas, Ohio and Virginia.

Other incentive deals Enid has approved, both by itself and through the Enid Regional Development Alliance — a nonprofit funded in part by the city — are meant to keep doors open.

Both Old Navy and Staples said in April 2011 that they would be closing their stores unless they received public money for a refit. ERDA approved more than half a million dollars in sales tax rebates.

Neither Staples’ nor Old Navy’s corporate offices returned a request for comment. ERDA justified the rebate because the stores each brought in more than $150,000 in sales tax revenue for the city each year.

 

Big and small

Not every business asking for help from ERDA gets a blockbuster deal. In fact, only about 10 percent even get financial assistance, Executive Director Brent Kisling said. Most just get technical help from the agency’s staff with permitting and licensing processes, organizing a business plan and finding the right location to set up shop.

A small number — too small, Kisling said — take advantage of a utility bill rebate that tops out at $750. Since the city began offering the rebate to businesses last year, it only has allocated a fraction of the program’s $5,000 budget.

A relatively small incentive went to Universal Management & Maintenance to refurbish a vacant building at Randolph and Van Buren. It received a $33,500 loan from Bank of Kremlin. ERDA helped out, Kisling said, by working with the bank to lower the equity requirement.

Travis Brorsen runs WOOF LLC, which also is known as Adventures with Travis and Presley. Brorsen started his company to create teaching tools for children and got help from ERDA in the form of two loans worth $140,000. Without that cash, Brorsen said he couldn’t have developed his product.

“A lot of people say time is money. That money allowed us to free up some of our own personal time and put that money toward things right away, as opposed to prolonged startup times,” he said.

Most of the loaned money went toward rental space, equipment and creating teachers’ guides, videos and books aimed at bullying prevention and good behavior.

“Nobody really took salaries. It all went toward the program and development,” Brorsen said.

His company is in transition. After several years based out of the James Strate Center for Business Development at Autry Technology Center, Brorsen has begun relocating his base of operations to New York.

The Perry native, who placed first in the TV show “Greatest American Dog” with his boxer, Presley, said he might also keep an office in Enid.

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