By Marian Miller
|Sunday, September 16, 1984
Edition: CITY, Section: REAL ESTATE
When Neal Horton and William Peterson teamed up in 1979 to buy buildings for the Bricktown project, word got out among building owners that “something big” was planned for the area and prices tripled, Horton said.
“Our plan was to go into an area where we could control the environment and lease or sell to small office users,” Horton said.
“The Bricktown area, which has definite boundaries of Walnut, Reno, Main and the Santa Fe railroad tracks, was perfect at that time for an office park.”
The pair formed Warehouse Development Co. and bought the first eight or nine buildings in the 12-building project “just like that” and then purchased the “stragglers,” Horton said.
But the decline in demand for office space brought leasing activity in the Bricktown project to a virtual standstill by early 1982. One of the buildings in the six-block area had been beautifully restored, according to plans designed by Howard & Porch Architects.
“As in a lot of real estate markets, we’ve been sitting here with a large group of properties. . .and haven’t had income from them,” Horton said. “Cash flow in this project has been non-existent. And now, one of the lenders wants the property back.”
That lender is Fidelity Bank in Oklahoma City, which recently filed a foreclosure suit claiming that Horton, Peterson and other partners defaulted on five separate loans amounting to more than $2.5 million, used to finance several Bricktown buildings.
“We’ll have to take some kind of defensive action so the project doesn’t get splintered,” Horton said. “We have to keep it together.
We’ll either have to sell it or get new partners or any number of possibilities.”
Despite the legal problems, Horton remains stubbornly optimistic about the future of the project. In another attempt to generate activity, the marketing strategy for the buildings was recently changed from 80 percent office and 20 percent retail to 80 percent retail and 20 percent office.
“We plan to have six to nine restaurants, two small hotels, a convention center, boutiques, small shops and 50,000 square feet of office space,” Horton said. “Our first priority is restaurants.”
Oddly enough, Horton added, once the news of Bricktown foreclosure suits hit the streets, leasing activity at the project escalated.
Although he said he could not be specific about pending leases or building sales, Horton said two restaurants, an architectural antique store and two hotel groups are currently negotiating for space or buildings in Bricktown.
“The biggest request we get from people is for living quarters in the project,” Horton said. “So we may add residential space at a later date, if it’s feasible.”
One problem that prevented the leasing of Bricktown space was a restriction in the developers’ permanent loan which committed them to lease at $17 per square foot, even in the current soft office market, Horton said.
“We were finally able to get that changed in June of this year and dropped our lease rates to a more competitive level,” he said.
The biggest advantage to keeping projects like Bricktown alive, Horton said, is that it can answer a lot of problems that have faced downtown Oklahoma City.
“Maintaining the plans for Bricktown is a significant battle in the war to bring back downtown and create a lively downtown,” he said.
Finding downtown restaurants that remain open in the evening is one problem in the city, he said.
“There are 486,000 conventioneers in downtown Oklahoma City each year and there’s nowhere for them to go but downtown bars,” Horton said. “A nice restaurant and shopping area would be beneficial to people living in the central core area. The only limit to this project is the creativity of those who lease it.”
Battles with lenders and the struggle to find tenants has not discouraged Horton.
“The end result is not in danger,” Horton insists. “There will be a Bricktown project in downtown Oklahoma City.”