Tulsa and the Remaking of Urban Governance
Below is the Nowak Metro Finance Lab Newsletter shared biweekly by Bruce Katz.
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April 30, 2021
(co-authored with Kian Kamas and Luise Noring)
A year ago, we wrote about how a period defined by a global pandemic, economic contraction and racial reckoning might become a catalyst for institutional transformation in cities. These profound events have simultaneously exacerbated inequities in our cities and revealed the inadequacies of the current architecture of governance within and across cities. Advancing shared prosperity and racial equity requires structural reform, which even a torrent of federal resources cannot address.
Several weeks ago, the Tulsa City Council took a major step in this direction by approving the creation of a new Tulsa Authority for Economic Opportunity (TAEO), merging the Mayor’s Office of Economic Development with four other public entities to create one single, independent economic development authority. When fully executed in the coming months, the new Authority will incorporate and merge the Mayor’s Office of Economic Development (MOED), Tulsa Industrial Authority (TIA), Tulsa Parking Authority (TPA), and Economic Development Commission (EDC). The entity will provide staffing for the Tulsa Development Authority, and an expanded Board will allow TDA Trustees to serve coterminous on the new Authority. The new Authority will be streamlined with 13 board members (down from 29 board members pre- merger) and one, unified staffing structure.
The reality of balkanized authorities and entities reflect the long-standing legacy of changes to urban governance that began in the 1930s and accelerated in the 1950s. In many cities, these changes deified the specialization of design and delivery, creating a plethora of separate public authorities to carry out specific initiatives, sometimes with federal resources. The price of fragmentation is exceptionally high, undermining the ability of cities to develop integrated strategies and realize their full market and financial power.
The creation of the Tulsa Authority for Economic Opportunity will mean the merging of the real estate and financial assets of these entities, which includes multiple parking structures and surface lots in downtown Tulsa, large landholdings prime for redevelopment just outside of downtown, residential lots throughout the city, and a hangar leased by American Airlines. Excitingly, these assets generate stable cash flow and have the potential to become a part of a targeted disposition strategy to build cash reserves for the new Authority. These funds will then be reinvested into economic and community development work, with the goal of furthering shared prosperity and racial equity.
The merger and repurposing of authorities follows an intense, several-year effort. In late 2018, Mayor G.T. Bynum identified “Establishing an Urban Wealth Fund” as one of his top goals for 2019, building on Dag Detter’s The Public Wealth of Cities and our research around the Copenhagen public asset corporation model. The Mayor’s declaration drove staff to begin researching and planning pathways for implementing this goal. As a result, the Mayor included $150,000 in funding in the FY20 budget to conduct a strategic planning process to support a comprehensive analysis that could lay the foundation for the creation of an Urban Wealth Fund.
Work began in early 2020 with consulting firm HR&A Advisors to create an inclusive strategy through which the City could improve the economic opportunities of Tulsa’s communities and address racial disparities, while streamlining processes and addressing existing inefficiencies. The final report recommended consolidating most of the economic development functions and entities under one roof (See PowerPoint Presentation (cityoftulsa.org)). This recommendation responded directly to Mayor Bynum’s criticism of the current state of affairs: “[F]or too long, Tulsa has been limited by our siloed approach that spread resources thin, created inefficiencies and limited execution of a collective vision to reduce and eliminate economic disparities.”
The conventional wisdom is that recommendations to consolidate independent authorities and establish a unified base of assets and financial resources, while grounded in evidence and sound policy, rarely get implemented. Tulsa has proven an exception to the rule, with the primary recommendations from the report already formally approved by all public bodies and efforts in progress to ensure the new Authority will launch on July 1st of this year. Three explanations stand out.
First, Mayor Bynum’s administration has largely been seen as innovative and competent, and staffed with professionals who were able to execute complex policy changes. At the beginning of Mayor Bynum’s first term, Economic Development staff began the process of making regular presentations to key authorities, boards, and commissions critical to economic development, with the goal of building relationships and understanding with those entities. This proactive relationship building, as well as community-wide buy-in to the Mayor’s vision for building a world-class city ensured that the city government was seen as presenting a compelling vision which Trustees of authorities, boards, and commissions could buy into. Additionally, the Mayor and staff made deliberate efforts to build relationships and understanding well in advance of making asks of authorities, boards, and commissions, which substantially increased support among Trustees and Commissioners, and also ensured they understood the goals and objectives the City was seeking to achieve, and how they fit into those goals and objectives.
Second, Mayor Bynum and his staff genuinely engaged the existing leadership of public authorities in the formation of the final plan. As the City progressed toward initiating the strategic planning project that would lay the foundation for the merger currently underway, the Mayor and economic development staff were able to build upon these existing relationships and scheduled individual meetings with every Trustee and Commissioner of impacted entities. The Mayor used these meetings to personally request their support for and engagement in the project, to indicate the City’s funding commitment to the project, and to pledge his commitment to undertaking the project with a mentality of “asking questions that we don’t yet know the answer to.” This pledge was made to assure board members that the City did not have a particular end in mind, and that the administration would let expert analysis guide the project to a set of recommendations that was uniquely suited to Tulsa.
In addition to this initial engagement, the City committed to including the Chair of each entity on a Working Committee and Steering Committee for the project, which ensured their direct engagement throughout the process. Staff for the Tulsa Development Authority and Tulsa Parking Authority were also included in the Working Committee, and legal counsel for each entity was engaged at appropriate points during the project. The Chief of Economic Development further committed to developing more personal relationships with each Chair, and regularly conducted outreach to the Chairs in advance of key project benchmarks or decision points in an effort to build understanding and buy-in, particularly as the project moved toward recommending organizational shifts.
Finally, the City mastered the complex financial and legal technicalities that often provide barriers to structural reforms of this kind. Upon completion of the final recommendations from HR&A, the Chief of Economic Development formed two key teams to guide the technical aspects of implementation: a Finance Implementation Team that meets weekly to chart progress on key aspects related to the financial impact of the merger, and a Legal Implementation Team that meets monthly (and emails sometimes daily) to chart progress on key aspects related to the legal implementation of the merger. While the technical components of the merger are complex and incredibly nuanced, the Chief of Economic Development has committed to communicating all of these details to key stakeholders in plain language to ensure all individuals fully understand the technical path to implementation.
Tulsa’s success is due to this unusual combination of grand vision, inclusive decision making and sharp attention to technical detail. This provides a roadmap for how other cities might pursue structural change and how smart ideas move from concept to execution.
All of this, of course, provides a platform for what comes next, an inclusive growth plan that is fueled by the smart disposition of public assets and sound management of ongoing operating revenues. With a base of nearly 300 assets, TAEO will have the opportunity to conduct a strategic review of assets to assess how disposition can achieve a triple objective: generate revenue, reduce operating expenses, and implement equitable economic development goals. As the City approaches the launch of major projects such as the Master Planning of 56 acres located in the historic Kirkpatrick Heights Neighborhood and Greenwood District immediately north of Downtown, the staff and Trustees of TAEO will work alongside Greenwood business, residents, and stakeholders to envision redevelopment, with a focus on leveraging tools such as tax increment financing (TIF) (this flyer) and special assessments to prevent displacement, maintain affordability, and support major public investments necessary for redevelopment. Catalyzing inclusive growth in Greenwood is of national significance, given that it was the site of the infamous 1921 Race Massacre.
The effort in Kirkpatrick Heights and Greenwood will undoubtedly build on strategies Tulsa deployed through a TIF in a historically disadvantaged neighborhood at the end of last year. The TIF captures the increment from a 120+ acre business park in north Tulsa and will use the increment generated over 30 years (estimated to be $42 million) to invest in housing programs in the four (4) census tracts immediately surrounding the business park. The TIF represents the first opportunity to truly drive major inclusive outcomes for residents using TIF, as opposed to the bulk of revenues supporting private developers or basic infrastructure.
As Mayor Bynum recently said, “[W]orld class cities have the ability to develop, invest in and implement comprehensive community and economic development strategies.” In the end, the economic revival of disadvantaged places requires that cities act with purpose and discipline, leveraging the full financial power at their disposal. The creation of a new Tulsa Authority for Economic Opportunity provides Tulsa with a powerful new vehicle for inclusive growth. Every city and county in the United States should watch the evolution of this authority closely.
Bruce Katz is the Founding Director of the Nowak Metro Finance Lab at Drexel University.
Kian Kamas is the Chief of Economic Development in the Office of the Tulsa Mayor.
Luise Noring is an Assistant Professor at the Copenhagen Business School.