Friday, March 26, 2010

"Pullin' a Tulsa"

This was going to be a post about all of the tremendous volumes of development starting to take off in Downtown Tulsa. I don't know about you all, but I've been following this and I'm just so impressed that indeed T-Town is beginning to hit a critical mass level that can sustain a growth curve of new development--especially considering what a skeptic I was a few years ago. Now it's OKC where recent downtown development has failed majorly to live up to the reinvigorated expectations and Tulsa that seems to be on fire.

But as with any good news up the turnpike, it's not without tons and tons of bickering, politics, shady back room deals, corruption, and public media wars. If anyone had difficulty understanding how a schmuck like the Anti-Obama Candidate for Mayor, Dewey Bartlett could resoundingly win office--this is how. Tulsa's powers that be have just degenerated to joke status. It's gotten bad, and I know some people in OKC are marginally familiar with how divisive and fragmented Tulsa can be, especially when a downtown deal is at stake, but this is shocking. It all has to do with the Tulsa Development Authority, which has effectively done everything in its power seemingly to squelch new development downtown, distribute millions of dollars to its cronies, spend months and months going through process tying up developments that would compete in the market against their cronies, and so on..

Virtually every time the TDA gets their hands within a mile of any prospective development deal they do everything possible to make it go sour. Sometimes buildings in the way of contentious proposals even mysteriously catch fire. And then a few years after the historic Towerview Bldg burned down, the TDA finally let a developer with a great plan (and financing) purchase the land for $1.5 million--after a year of being tied up in complicated processes and wait periods that never made any sense to veteran Tulsa developer Bob Eggleston.
Eggleston said he's been a little frustrated by the time it's taken to get the project moving and by the complicated nature of the approval process.

"In Jenks, we don't have to do that," he said, comparing the One Place development to the Village on Main. "It's a lot more simplified. I love meeting with the city of Jenks. They open every meeting by saying, 'What can we do to help you?'"

Perhaps it is no coincidence, or mystery, after all why Jenks is booming--with 3 major, major mixed-use developments underway (giving the Antique Capital of Oklahoma a competitive advantage in real estate over anywhere else in the state).

If the TDA would allow such a thing, Eggleston's development will be a $38 million mixed-use masterpiece, centered around a 120-room Hilton urban hotel, 40 upscale residential units, and street-level retail and addition to 160 structured parking spaces.

Then we get to the downtown ballpark deal--assuming that building a public consensus behind the project would be impossible in Tulsa's political environment, then-Mayor Kathy Taylor slapped an involuntary ad valorem tax funding district on DT Tulsa to pay for what private benefactors wouldn't cover for the $60 million ONEOK Field--now the deal is biting them in the butt, with 18+ downtown property owners engaged in a class-action lawsuit with the City of Tulsa. That is one of at least 3 development-related lawsuits that the City of Tulsa is engaged in with its own citizens (not counting the dozens of non development-related lawsuits).

Speaking of the ballpark, the 2nd of these development-related lawsuits against the City of Tulsa is from Will Wilkins, (former) developer of the mixed-use infill project known as 120 Brady Village/Lofts @ 120. Wilkins made the mistake of negotiating with TDA, spent thousands and thousands in legal, architectural, and other expenses on a project that had entered into a phase of contractual exclusive negotiating (that TDA preliminarily recognizes the deal underway with Wilkins and will stop fielding cronies to unload the site off on). After the legally binding exclusive negotiating phase had been initiated, the TDA broke the deal and broke ties with Wilkins, who had an excellent project in place with dozens of residential units and street-level retail. Wilkins is now suing for damages and TDA's shady dealings with this site are coming to the surface..the site, located across the street from the new ONEOK Field, was envisioned by Kathy Taylor as an area to be a "a beautifully woven fabric" of urban development, which in Taylor's vision, excluded the Wilkins' true mixed-use urban development. The affair has also brought to the forefront a secret meeting between Councilor Eric Gomez and the private donors behind ONEOK Field, who are now making plays to develop sites around the ballpark. The link above goes into the meeting as well.

Sounds like a Moshe Tal kind of deal if I ever heard one, but let's just hope for now that Tulsa doesn't get stuck with a Bass Pro in the Greenwood district, but if they did--it should at least offer some consolation that the highway visibility would be out-of-this-world. Even better than I-35/I-40 access to the Bricktown Bass Pro.

The third lawsuit involves building code violations. The City of Tulsa's solution for bad building owners is to fine buildings that are not up to city building code a fine of $1,000 a day for every day that it is not up to code. The buildings aren't systematically processed and required to meet a set of guidelines applied to every building in Tulsa, they are just arbitrarily chosen by the City and identified as downtown eyesores of particular merit. The building being litigated over, the beautiful historic Tulsa Club Building, is owned by Carl Morony of California (a huge number of DT Tulsa's building stock is owned by various CA investors actually). Morony was not even served his lawsuit papers by the City of Tulsa, although to Kathy Taylor's credit, out-of-state ghosts can be mighty hard to find sometimes. Morony's fines owed to the City of Tulsa are way in excess of $300,000.

Another building being held up by the enormous code violation fines is the ironically-named Abundant Life Building, which Tulsa businessman David Horton is struggling to renovate into the Diamond Lofts project, which this post is about. Horton is cooperating with the city and has allowed DEQ in the building to do whatever it needs to do, according to this article in the Tulsa Whirled.

There's nothing saying that Tulsa won't forgive the fines for Horton's situation, which they probably will (I can only assume, given that he is making attempts to improve the building), but the building still either has or will have liens on it which make it slightly unattractive as a real estate investment, sort of undermining Horton's genuine efforts. The only thing accomplished at the end of the day is that Horton is placed permanently at the behest of the city if he has to work with them in order to avoid 6-figures in trumped up city fines.

The good news is that we're not even done yet. We haven't even gone over the most corrupt deal that TDA was all over, without a doubt, the Tribune Lofts II project. For those that don't know, the 2000s saw the completion of very few downtown housing projects in Tulsa--one of them was the Tribune Lofts in the Brady District, where they restored the 6-story Tulsa Tribune building into lofts in an emerging arts district. The Tribune Lofts II project is to create a twin building next door and continue the marginal success that the developer, American Residential Group, experienced in leasing the units (and they failed to convert to condo, drawing from many downtown residences in Oklahoma). Although new infill construction, the ARG-provided elevations show a historic motif that closely mirrors the building restored next door. It is by all means an absolutely fantastic project.

Now enter into the picture the TDA, which was somehow placed in charge of distributing $4 million in housing upstart loans derived from a 1996 temporary third-penny sales tax. That's almost historic by now. Tulsa has a history of using city-issued no interest loans in order to stimulate private development downtown, and it really is a great idea--because the city gets the money back in the end. If we did that in OKC and charged a low interest rate set slightly higher than the projected inflation, the city coffers could even benefit greatly from downtown's resurgence, and why not? I've always thought governments should be investing their resources, not hoarding them until a "rainy day" and what better to invest in than your own damn community? Maybe we could even spend it all on police raises to get them over the $80,000 threshold.

Back to Tulsa, where so far we have no problem in this deal--the problem comes from the bidding process, which numerous developers were interested in a piece of the $4 million. However, there was never a request for proposals. TDA Chairman Carl Bracy insists that the TDA was not bound to be open and transparent, because after all, they're the TDA. Point taken. It is also very unprecedented, even in Tulsa, that the entire lump sum of loan money be given to just one project. They did the same thing with Vision 2025, with $10 million in loan giveaways to spur downtown housing, and each development had to find other sources for the majority of costs and the entire pie was broken down into 5 or so different allotments. They recently awarded the last of the loans, a total of $769,000 awarded to help finance a loft project on Denver being done by Tori Snyder (same person who led the Mayo Hotel renovations)--again, $769,000--NOT the entire $10 million. That was an above-board process, overseen by Vision 2025 which has citizen oversight much like MAPS in OKC.

However take away the empowered citizen oversight, and you have the TDA distributing stuff (or in OKC, we would have OCURA cutting these deals on the city's behalf if we don't have an empowered citizen oversight committee which Mayor Mick opposes). It is beyond fishy that the TDA didn't open the process up with a request for proposals (which I guarantee you, without even looking into it, is a legal requirement of a city entity throwing money around left and right), that the whole lump sum went to one developer rumored to be on the inside of City Hall, that 1996 sales tax money was being held onto and wasn't even used for its stated purpose until 2009 (what else is the TDA holding on to?), and especially fishy that other downtown developers who inquired about the funds were told by Carl Bracy to not even think about it. Pictured on the left is the 10-story, 80-year old ONG Building, which ZigZag Development wants to restore into residential lofts. ZigZag was one of the groups given the runaround by Bracy.

Answering to Councilor Bill Martinson Bracy sounded even more implicated:
During that meeting, a local developer said she was told by Authority Chairman Carl Bracy that a member of the mayor's office and other city officials presented the project as the viable one for downtown.

To which, Martinson's response was:
"It really disturbs me that you guys predetermined how the $4 million would be recycled into the economy downtown," Councilor Bill Martinson said during a council committee meeting last week.

Guys, sound anything like Core 2 Shore? OCURA? Et all..

You've got to absolutely love how a city can just railroad whatever it wants through due process, and more often than not, it seems almost as if due process just gets in the way of the good guys and especially the citizens trying to just figure out what on earth is going on. If the good guys in Tulsa fall by the wayside of the system being streamlined for Kathy Taylor's vision of a "beautifully woven fabric" of urban development (and who knows what that even means, I consider myself pretty knowledgeable about urban spaces, and I'm at a loss), then who is to say Tulsa isn't giving our City Hall inspiration to steamroll all over downtown's established interests and make way for this Core 2 Shore thing?

Now I am GLAD as heck that Downtown OKC is nowhere near this corrupt. We've still got a long ways to go to catch up to Tulsa's level. That's not to say Tulsa is a bad town, because it's not, in fact it's an absolute treasure of a city and we all know it, especially now that its downtown is heating up again. New York and Chicago especially can also be tough towns, and look at all of their development, and what great cities they are. But at the end of the day, in order for Downtown OKC to be a "big league downtown" (and yes, DT Tulsa is already a "big league downtown"), we don't have to rise to their level of corruption to achieve big city-ness. This is a message that I seriously hope everyone at City Hall these days takes straight to heart.

I think I'll just stop there, although I could go on listing shady/TDA-related development deals, believe it or not..

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