Run down, ignored, abandoned, underutilized and absent tax revenue
used to be the best (or only) way to describe downtown Lawton, Oklahoma.
For more than 10 years, investors, developers, city, and county
officials worked towards one purpose-creating and executing a plan
which would transform and revitalize the downtown area into a destination
mixed use site promoting business expansion. Sounds amazing (or
Great plan)! ...The problem(s)? Who wants to be first? What type
of anchor project can catalyze adjacent development? How do the
and developers were unwilling to move forward in Lawton due to the
fact that the risk was high and the potential reward was negligible.
Loans at the market rate combined with standard debt to equity requirements
from banks forced developers to think outside the box. Even with
a city and county loan program, the returns did not line up with
What if this project was in an area (low income census tract) where
the poverty rate was over 30% and the unemployment rate was at least
1.5x the national average? This would mean the project potentially
qualifies for New Markets Tax Credits (NMTCs). NMTCs are allocated
to Community Development Entities (CDEs) by the US Treasury Department.
NMTCs allow investors to recover part of the cost (39%) of starting
(or running) a Qualified Active Low Income Business (QALICB) over
New Markets Redevelopment (NMR) joined a team that included funding
from the Lawton Economic Development Authority, Comanche County
Industrial Development Authority and another Oklahoma CDE. The ability
of NMR to find banks that would provide access to below market interest
rates (40-50% below) and allow higher debt to equity ratios (30-50%
higher) on commercial loans combined with an investor in need of
tax credits preempted the announcement of a Hilton Garden Inn and
Convention Center in late 2012.
project expects to produce 315 construction jobs and create 65 permanent
jobs thus directly lowering the unemployment rate and the poverty
rate. The added jobs together with the hotel and convention center
results in higher foot traffic to businesses (demand) and increased
property value which both serve as positive externalities to surrounding
property owners. In fact, after the start of the Hilton construction
another developer completed its agreement with the city to add several
high profile national retailers to the adjacent property. The revitalization
occurring in downtown Lawton has increased the income level (or
reduced the poverty level) in this Low Income Community (LIC) coupled
with increased sales tax revenue and higher property taxes will
further help bring life to a long blighted area and has already
catalyzed adjacent development.