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City of Bartlesville

Posted: Jan 26, 2022 10:16 AMUpdated: Jan 26, 2022 10:29 AM

Incentive Approved to Recruit ConocoPhillips Employees

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Garrett Giles

As a result of ConocoPhillips' (COP) Permian Asset Acquisition (PAA), the Bartlesville facility anticipates up to 20 professional employees and their families to relocate to the area in 2022.

The Bartlesville Development Authority (BDA) on Wednesday morning approved a proposal to offer a Residential Recruitment Program incentive to recruit those employees to the area.

BDA President David Wood says this would relocate the employees related to the PAA acquisition that choose to buy or build a home in the Bartlesville market. Wood says the relocating PAA-related employees would be offered:

  • $10,000 cash assistance for the purchase of a primary residence within the City of Bartlesville.
  • $20,000 cash assistance for new construction of a primary residence within the City of Bartlesville.
  • $10,000 cash assistance for new construction of a primary residence outside the city limits but within the Bartlesville School District.

The BDA typically offers a Bartlesville primary industry employers $10,000 per job per new employee meeting the average manufacturing wage. As the employer is the beneficiary, the community bears this cost regardless of where these employees choose to reside.

Under this proposal, Wood says the traditional job creation assistance of $10,000 per job would guarantee the economic benefits of residency. While recognizing the doubling of assistance for new construction within the city limits, Wood says these funds not only assure the capture of an inbound revenue stream, but directly bolster the available housing stock. Further, Wood says sales tax on a new home constructed in Bartlesville will produce a one-time sales tax boost of approximately $3,400 against the $20,000 of cash incentive. He says new construction outside the city limits, but within the Bartlesville School District, guarantees that Bartlesville's merchants will receive the overwhelming portion of new retail spending, with the City of Bartlesville as the beneficiary of the 3.4-percent sales tax.

In all cases, Bartlesville Public Schools would receive the benefit of property taxes. In most cases, the City and Washington County would similarly receive property tax.

How We Got Here

In September 2021, ConocoPhillips agreed to acquire Shell Enterprise's Delaware Basin position in Texas. The Permian Asset Acquisition transaction was completed by December with CEO Ryan Lance stating:

"The completion of this acquisition caps off an exceptional year and significantly strengthens our company as we head into 2022. We welcome a new group of employees and look forward to integrating these properties into our Permian business..."

With the initial announcement, BDA reached out to COP to see if there was a potential for significant transfer of employees to Bartlesville, and it so, would BDA's Resident Recruitment Program held maximize the number of inbound individuals and families selecting the Bartlesville area as their new home versus Owasso, Tulsa, and beyond.

Shortly after closing the transaction, COP followed up to inquire about the Resident Relocation Program for new inbound employees associated with the PAA.

Pilot Program - Concho Resources Results

This isn't the BDA's first rodeo. In February 2021, the BDA initiated a pilot program to offer job creation-incentive directly to relocating personnel purchasing (or building) a new home in the Bartlesville market. The program was highly successful, resulting in 13 new households (11 home purchases, two new construction) with two additional residents pending. The total cost to date is $150,000 - essentially the same the BDA would have offered to any primary industry adding quality jobs in hope that the new inbound employees would choose to reside in Bartlesville but knowing some/many would not.

Wood says the Resident Relocation Program represents a guaranteed win. He says their industries have a new, powerful employee recruitment tool, relocating employees found the benefit for choosing Bartlesville, compelling, and the community's cost remained the same while the net returns soared.

Precedent

As with most new program BDA contemplates, the Trustees/Bartlesville City Council must consider the precedent being established. Specifically, would this type of incentive now become available to other primary employers within the City of Bartlesville? Based on success with Concho Resources, Wood says the answer is an unequivocal yes.

Generally, the job creation cost is the same as traditionally offered – the difference is merely the beneficiary (employee vs. employer). In many respects, Wood says the return on the public investment is higher as the recipient must live in the local taxing jurisdiction For this reason, Wood says targeted employee relocation incentives have proven to be the preferred use of job creation incentives.

The following qualifications and conditions (validated through Concho) are retained for ongoing guidelines of the Resident Relocation Program:

  • Employer must be a "primary industry" eg. deriving more than 50-percent of revenue from outside of Bartlesville.
  • Employer must be pursuing recruitment of 10 people or more employees under a specific opportunity (not one-off employment growth expectations).
  • Inbound jobs must be "Quality Jobs" qualified under state guidelines.
  • From inception, program is valid for one year
  • Cash is only disbursed at real estate closing (primary residence of inbound employee).

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