• about
• foundation
• contact
• stay informed

Orthocare Innovations Awarded $415k Incentive Package from OKC Council

OKLAHOMA CITY - Oklahoma City Council members voted to give $415,000 to Orthocare Innovations LLC to help expand the company's facilities and create jobs. But at least one council member said he would rather pay for such economic incentives after a company delivers on its development promises instead of before.

"I am totally in favor of incentivizing companies to move in, which is the first part of this particular plan," Ward 3 representative Larry McAtee told his council peers this week. However, he said, "I am concerned about the precedent and do not feel that we should have set the precedent on this. I feel that this is an indication, possibly, that this company needed some working capital to get their operation going, and I don't see the city of Oklahoma City being a supplier of working capital or venture capital."

McAtee was the lone holdout in a 6-1 vote to pass a join resolution with the Oklahoma City Economic Development Trust to approve the allocation of general obligation, or GO, limited tax bond proceeds. The funding comes from the economic development portion of the 2007 city bond election, which allows Oklahoma City to provide performance-based economic incentives for companies that relocate or expand in Oklahoma City.

The incentive package was based on Orthocare Innovations' plans to add about 80 jobs in Oklahoma City over the next five years. The average first-year wage for those jobs is expected to be about $53,000.

Orthocare, which manufactures high-tech prosthetics and orthotic devices, has about 10 employees at its corporate headquarters in the city now, city staff reported. The company also plans to invest a minimum of $1.25 million in new equipment and building modifications over five years.

The new jobs are an outgrowth of the company's 2008 merger with Martin Bionics, which has given Orthocare reason to expand its presence in the Presbyterian Health Foundation, city staff reported to the council, "due to the facility efficiencies and infrastructure ... along with the quality of the local area work force and availability of state and local business growth incentives."

McAtee agrees that incentives are appropriate, especially when economic impact is projected to be about $72.7 million over the first five years. But they're being made available at the wrong end of the project, he said.

"One of the parts of the incentive package is to advance, if the company Orthocare wants, up to $150,000 to defray expansion costs," he said. "I'd prefer the incentive to be based on performance. So the incentive would be given after the performance has been achieved ... after a job was created for so many dollars and it was documented that a job had been created. That's kind of the line that I've drawn on this thing, personally."

Assistant City Manager Cathy O'Connor said, "Our ability to attract quality businesses like Orthocare Innovations to Oklahoma City is essential to our growth and success. We are constantly competing with cities across the country for jobs, and incentives for economic development give us a significant advantage. We expect a return on our investment in three to five years."