In January, Californian property developer Matteson Capital announced plans to build the US’s tallest tower in an unlikely location: Oklahoma City. The 581-metre skyscraper would be an extension of its $736m Boardwalk at Bricktown multi-use development, which is being built in the downtown area of the country’s 20th biggest city. Irrespective of whether the tower receives all necessary approvals to proceed, its symbolic value resonates already. “The fact we’re even talking about the project is a signal that Oklahoma City is in a different place than it was historically,” says Jeff Seymour, executive vice president of economic development at Greater Oklahoma City Chamber. 

The project has shone a light on an uptick in investor interest in Oklahoma, from both interstate and overseas. Data from fDi Markets shows that in 2022 and 2023 the traditionally minor recipient of foreign direct investment (FDI) registered more than $1bn-worth of FDI announcements annually, and saw project numbers double the preceding 10-year average. After long being overshadowed by its southern neighbour, FDI heavyweight Texas, Oklahoma is now on the international investment map.

Cleantech capabilities

One of the biggest drivers of Oklahoma’s FDI uptick is wind power. Foreign firms have announced $4.9bn-worth of FDI into the sector over the past two decades, more than in any other US state aside from Texas. Its wind potential is epitomised by the recently-completed North Central Energy Facilities, a 1.5 gigawatt locally developed wind farm which is among the country’s biggest. Its location within the US wind belt — which encompasses the central Great Plains states — has propelled Oklahoma to become the country’s sixth biggest renewable power generating state, according to government figures.

The state is on the frontline of the energy industry’s clash with Native American groups, after a court ordered Italy’s Enel — which has ploughed more than $3bn into Okahoman wind and is the state’s biggest foreign investor — to remove 84 turbines it built on tribal land without the correct permits. But Samantha Woodworth, a senior analyst at Wood Mackenzie, expects the wind sector to continue its upward trajectory. “Oklahoma and the Plains states are still going to be the majority of US wind build-out for the next decade or so,” she says. 

Enel’s biggest investment in the state is a $1bn solar panel manufacturing facility on the outskirts of Tulsa, the state’s second city, which it announced last May. Oklahoma’s growth in cleantech manufacturing also extends to electric vehicles (EVs). Arkansas-based Canoo is spending $320m on a battery plant in the state’s north-east and an EV assembly plant in Oklahoma City, while in January Connecticut-based Stardust Power announced it would build a $1bn-plus lithium refinery in the state.

Homegrown EV start-ups — the poster child being battery recycling firm Spiers New Technology —  are also catching the eye of foreign institutional investors. After launching Oklahoma City-based venture capital firm Cortado Ventures four years ago, Nathaniel Harding says that for the first two years he saw minimal interest from foreign investors in the state’s start-ups. “Now have some kind of meeting or conversation almost every week with a [foreign] group that's looking to invest,” he says, adding that mobility is their prime focus.

Growing megalopolis

Oklahoma’s EV appeal is partly down to incentives. Canoo secured up to $113m in state subsidies, and Stardust Power $257m in state and federal incentives combined, for their investments. But its location is also a factor. Oklahoma City sits at the intersection of three major interstate highways, including I35 which ends at the Mexican border. “If you’re an EV manufacturer, which needs to pull stuff from traditional automotive [states] but also has a lot of supplies coming out of Mexico, a nice centroid for that [is] that north Texas, Oklahoma area,” says ​​Chris Schwinden, partner at Site Selection Group. 

Will Renner, who leads the Oklahoma and Arkansas market for property developer Hines, says cross-border trade could also boost the state’s attractiveness for logistics. “To the extent the projection of increased trade across the US-Mexico border comes true, that’s clearly going to benefit the Oklahoma market,” he says. 

Another geographical benefit is the spillover from Texas, where an influx of business and in-migration since the pandemic is pushing up costs. “A company might think it wants to be in north Texas, but finds it expensive and hard to find sites,” says Mr Schwinden. “Where’s a really good alternative to that? Oklahoma.” Greater Oklahoma City claims that its business costs are 15% below the national average. Mr Renner agrees that with logistics there’s “clearly an opportunity for Oklahoma to draft off of a lot of the positive momentum we're seeing in Texas”.  

An increase in Mexican imports transported through Texas and Oklahoma further cements the two states’ economic ties. Together they form the so-called Texas Triangle — one of the country’s 11 megalopolises or mega-regions — which thanks to Texas is home to six of the US’s fastest-growing cities by population according to government figures. Notwithstanding Oklahoma’s standalone strengths, Mr Seymour says it helps “that this whole region … functions as a larger vehicle for both domestic and international investment”. 

Big league city

Back in Oklahoma City, locals stress that the Boardwalk at Bricktown is just the latest in a string of urban regeneration and property projects. Mr Harding says these have transformed the state capital from a “flyover, afterthought community in the 90s” to “a big league city” capable of attracting talent and companies. Many of these have been developed under the council’s MAPS project, which for the past 30 years has used a one-cent sales tax to fund community infrastructure such as convention centres, parks, canals and sporting facilities. Last December, voters approved the construction of a $900m arena partially-funded via MAPS which will be the new home for the Oklahoma City Thunder basketball team. 

As for the prospect of being home to the country’s tallest tower, the business community is positive but practical. “Regardless of what eventually transpires … I do think it’s a positive sign that people are thinking about these projects,” says Mr Renner. “Downtown Oklahoma City has changed dramatically … and it’s exciting to think about the next chapter.”

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This article first appeared in the April/May 2024 print edition of fDi Intelligence.