Newspaper article THE JOURNAL RECORD

OKC-Based Devon HQ Appraised at $707.9M

Newspaper article THE JOURNAL RECORD

OKC-Based Devon HQ Appraised at $707.9M

Article excerpt

The recent appraisal of the new Devon Energy corporate headquarters in downtown Oklahoma City is more than $125 million less than originally projected, triggering a minimum payment clause in the company's agreement with the city, public records show.

Taken altogether, the components of Devon property on the northeast corner of Sheridan and Hudson avenues have a market value of $707.9 million, according to the Oklahoma County assessor's recent appraisal. That compares with an original estimated cost of $835 million to develop the 50-story, 1.7 million-square-foot tower and adjacent buildings.

County records show the tower real estate itself listed at a $449.8 million market value. The so-called personal value of Devon Headquarters LLC at the same address was given a market value of $212.3 million, while the latest market value listed for Devon Energy Production Co. LP was $8.7 million. The Devon employee parking garage and wellness center complex has a real estate market value of $37.1 million.

Devon officials have not questioned the appraisal, County Assessor Leonard Sullivan said. Devon spokesman Chip Minty said Thursday the company had no comment.

The lower figure triggers a clause in Devon's agreement with the Oklahoma City municipal government to establish a tax increment finance district, or TIF. A TIF district allows a local government to leverage projected economic benefits in a specific area by collecting funds dedicated to infrastructure improvements. Those improvements are often required ahead of the development, so the government agency may issue bond debt to get the work done and then pay off that debt with collected tax revenues later.

In Devon's case, city officials agreed to renovate the vast majority of the downtown business district's streetscape with TIF funds derived from the tower's development on land formerly held by the Oklahoma City Urban Renewal Authority. That work, referred to as Project 180, is ongoing. In exchange, Devon agreed to pay a portion of ad valorem real and personal property taxes to the city. …

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