OKLAHOMA CITY - The city council has agreed to give a big-name software company a $1.2 million incentive, as long as it follows through on its promise to create hundreds of new jobs.
The money will help Paycom Software Inc. construct a new, third office building to tack on to its Oklahoma City headquarters, located at 7501 W Memorial Rd.
In return, Paycom says the city can expect 423 new jobs over the next five years. The company estimates those jobs will command average yearly salaries of around $49,500.
"It is important that we build a community where our children and our grandchildren want to live and they have jobs that they can hold and make a different living," said Cathy O'Connor president of The Alliance for Economic Development of Oklahoma City. "Right now is the time when we absolutely need to be focused on creating high-quality jobs for Oklahoma City."
The money comes from bonds sold by the city and approved by voters. In 2007, OKC residents passed the $835.5 million program, which dedicated funding to eleven different areas:
- Traffic Control
- Drainage Control
- Parks and Recreation
- City Maintenance Facilities
- Economic Development
The $75 million economic development bonds -- the third-largest allocation, accounting for roughly 10 percent of the total program -- had never been a part of the bond election until 2007.
O'Connor says the city didn't want to count on federal funding, which had started to dry up.
"This agreement shows our commitment to continue growing our business across the nation, resulting in more jobs locally, and in the city’s dedication to making a positive impact on the career and lives of Oklahomans by incentivizing job expansion," Paycom founder and CEO Chad Richison told NewsChannel 4 in a statement. "We are fortunate to be entering an agreement with the City of Oklahoma City in which our interests are aligned."
But Ward 2 Councilman Ed Shadid has questions about whether the voter-approved bonds were the right move, especially looking at the current economic situation.
"I have a real problem with diverting $75 million away from our neighborhoods for their streets, drainage, parks, to give to a company who almost certainly would have created these jobs anyway," said Shadid, adding the companies rarely generate increases in sales tax, where Oklahoma City is lacking.
Shadid would rather see the state take care of commercial economic incentives.
"It's not just that we're giving Paycom or Continental Energy or Chesapeake Energy millions of dollars, it's that those millions of dollars would have gone toward streets, parks and improvements in their neighborhood," he said. "Really it's generating very little sales tax. So to create jobs that create income tax is probably a better responsibility of the state."
But Cathy O'Connor maintains the program has worked, generating more than 11,000 jobs. Plus, she said, the money has already been set aside for the companies -- with $11-12 million left to spend.
Plus, Oklahoma City Economic Development Trust said it's projecting to contribute $91 million back to the city over the first three years, when considering capital investment, wages and state and local taxes, not to mention $1 million in new sales tax revenue.
O'Connor firmly believes if there aren't incentives to keep high-performing companies in town, they will flock to Ft. Worth or other nearby cities.
"It’s when we have economic hard times, when things aren’t looking so good is when we need to redouble our efforts to create high-quality, high-paying jobs in a wide variety of industries," she said.
Voters will likely have a chance to vote on another economic development package in 2017.