Kansas firm with state ties says moratorium bad for business
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Published: 24-May-2010

CapitolBeatOK Staff Report

Published: 24-May-2010

Garrison Development of Kansas City, an advocate of historic tax credits (HTCs) said legislation to curb use of such credits in Oklahoma would be bad for business. The firm does contracting and construction in Oklahoma. Gary Hassenflu from Garrison Development decried current legislative proposals to suspend HTCs in the Sooner State. 

In a release sent to CapitolBeatOK, the company said, “Thousands of Oklahoma jobs and hundred of millions of dollars investment in the state are at risk if the Governor and House and Senate leadership have their way and a moratorium is put on all of the state tax credit programs as is outlined in S.B. 1267.”

Ron Cupp, a vice president of the State Chamber, has said loss of the credits could hurt economic development and future revenue growth.

The Kansas City firm contended in a statement distributed last weekend, “Without historic tax credits (HTCs) alone, the Skirvin Hotel in downtown Oklahoma City, the Mayo Hotel and Mayo Office Building in downtown Tulsa, the Surety Building in downtown Muskogee, the Berryhill Apartments in downtown Sapulpa, the Will Rogers Building in Claremore, the Aldridge in Shawnee Claremore  in would still be pigeon roosts. Not only did these handful of buildings create viable and needed uses in their respective communities out of, otherwise, vacant buildings, they created revenue for the state via property taxes, taxes on earnings on the construction jobs, sales tax on construction materials. Hotels and senior affordable apartments for our elderly on fixed incomes are among those valuable uses for the buildings. The developments created confidence in areas that have been blighted for years an encouraged other development in the same area.”

The firm contends such credits “generate 3 to 4 times the revenue that the tax credit is costing the state. States, like Oklahoma, need jobs and cost-effective ways to generate them through strong government programs like the HTC. It is hard to enough to make projects work in this limited debt and equity financing market without them.”

Hassenflu said the state of Kansas “just went back to no reduction on HTCs redeemed from a 10% reduction to no reduction and a 25% credit instead of the 20% tax credit that Oklahoma has. Missouri had the same budget problem and left their 25% program alone, too. These states understand economic development and these are the states Oklahoma is competing against.”

The company expressed hope S.B. 1900 or other legislation could undo the tax credit moratorium in the legislative session’s closing days.

Garrison Development works in Kansas, Missouri, Nebraska, Colorado, Utah, Oklahoma, and Louisiana. The firm said in its release it had completed $130 million in developments in Oklahoma over the past 12 years.

 

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