Today was, my friends, what we in the news biz call a “crazy day.” Everything seemed to hit the fan at once. Here’s a full transcript of my interview with First National owner Aaron Yashouafar. He was not willing to discuss matters currently in litigation – including the foreclosure action on First National.
Q: A lot of locals were shocked at the $21 million paid for First National in 2006. Looking back, do you still think the price was a good deal?
A: First National Center consists of 1 million square feet of prime, landmark, office space in Downtown Oklahoma City. The price paid is well beyond a good deal. The building was purchased at approximately $21 per square foot. To rebuild such a project would cost hundreds of millions of dollars, not to mention the fact that this landmark is irreplaceable.
Q: How much have you spent improving the property? Approximately $8.5 million, and continuing.
A: One of the biggest complaints I’m hearing about the current ownership is how there were sharp increases in rent even though improvements were halted.
A: Notwithstanding the improvements the ownership has made to the property, the rents are still in line with (and sometimes below) what others in the neighborhood are charging. We are all aware of substantial increases in the cost of operating a building such as First National Center (such as utilities, insurance and labor). Prior rents from old leases dating back to previous owners (who neglected the building, and would take anything from anyone without contributing to the building), should not be considered when talking about the rent increases. There has been 4 years of work and progress towards substantial improvements in building infrastructure as well as cosmetics. The pace of making improvements has only recently slowed down, not by no means, “halted”.
Q: You’ve seen properties in L.A. and New York go into foreclosure and the newspaper accounts paint a pretty bleak picture of your company – how do you respond to that?
A: Although Oklahoma has been, to a great extent immune, the rest of the nation is undergoing one of the most significant recessions, with the real estate industry taking a substantial hit and undergoing tremendous devaluations. Many properties, many owners, and many banks have gone out of business. Milbank, however, on behalf of the various owners it represents, is continuing to deal with the economic slowdown by repositioning the properties it manages. Many other owners faced with the same facts, have simply abandoned the properties.
Q: What’s your reaction to The Village Voice describing you as one of New York City’s “worst slumlords”?
A: I am not sure you have all the right facts. Milbank has not been managing the properties in question for nearly a year and a half. The lender hired its own management company to manage the properties, and that management company is the one being blamed. Unfortunately, when that management company was engaged, Milbank was prevented from carrying out its plan to improve and stabilize that property. In fact, the tenants are suing the lender now because of its lack of care for the properties. During the time that Milbank was managing those properties, many violations from prior owners were removed, the buildings improved substantially, and the tenants were being tended to. We do not believe that Milbank is a “bad manager” – especially here in Oklahoma City, where occupancy at the FNC has increased threefold in four years.
Q: With the debt level being so high and the mid-2000s real estate boom history, how do you make a property like First National successful again?
A: The property is already successful. Through the financial resources made available by the owners, the management team has been able to raise the occupancy from low 20% range to almost 65%, in just four years. In a building as large as First National Center, this translates to over 400,000 square feet of new leases. I am not aware of any other building in Downtown Oklahoma City experiencing such a transformation. In fact, the owners have always been, and continue to be, in compliance with the loan.
Q: Do you have any regrets when it comes to First National?
A: Not at all. At a time when almost everyone in Oklahoma City had simply written off First National Center, the current ownership made a commitment to give the property a new life. The dedication of the owners encouraged the City officials to support such renovation and together we created a dedicated and compassionate team whose results we are witnessing today.
Today’s guest blogger is Blair Humphreys, who ,has had a great influence on my understanding of urban planning over the past couple of years. I don’t pretend to know as much as Blair knows – but I’m often awed by his ability to beyond conventional thinking and to propose solutions not considered. Blair’s experience includes real world urban development, time spent with Hans Butzer, one of the city’s leading design professionals and professor of architecture at OU, an internship at the Oklahoma City Planning Department, and of course, a front row to seat to the city’s political scene. Blair, a national merit scholar at OU, won national recognition and honors while attending Massachusetts Institute of Technology, from which he graduated last year with a Master in City Planning and Urban Design Certificate. Blair is now an instructor and researcher at the University of Oklahoma, and has been following the Let’s Talk Transit far closer than I.
After seeing comments already made by respected Oklahoma City blogger Doug Loudenback questioning whether real public input was taking place with the downtown transit, I asked Blair to share his insights.
It has been a while since I last blogged over at www.imaginativeamerica.com! I recently moved back to Oklahoma City and am enjoying being home. While a new job (and a new house, and new puppy, etc) have kept me from blogging lately, I believe this issue is extremely important and hope you will find the post worthwhile.
I will be at today’s Lets Talk Transit meeting at 11:30am – hope to see you there!
The first Let’s Talk Transit meeting was held on March 29, 2010 and the process will finish on Thursday, May 27, with meetings at both 11:30am and 6:00pm. Let’s Talk Transit is the public’s opportunity to interject their thoughts into the decision-making process for the $120 million MAPS 3 streetcar system:
“This is why these meetings are being held so the public can have a voice about what is most important to them. The public’s opinion is vital in meeting the needs of those who work, live and visit downtown.”
- Rick Cain
I was able to attend the first meeting and have kept up with the process by completing surveys, watching videos of meetings, and reviewing the meeting agendas. In fact, Let’s Talk Transit has done a great job making information on the process available. All of the images and/or quotes in this post come from public documents available at: http://www.letstalktransit.com/meetings (#1 – see note). As I have watched and listened, I have developed my own opinions on the best routes for the MAPS 3 Streetcar, and have found myself in agreement with much of the public input to date, but now I am beginning to wonder whether the output of this “public process” will truly represent the input the public gave.
APRIL 13 MEETING
At the second meeting on April 13, 2010, members of the public worked in small groups to layout proposal for the new streetcar routes. There were six tables each of which was asked to take-on the perspective of a potential streetcar rider: resident, worker, and visitor. Figure 1 shows the various proposals that the citizen groups came up with. All of which were aggregated by the consultant to produce the frequency map shown in Figure 2.
Figure 1 – Routes Proposed by Citizens at April 13 Meeting
Figure 2 – Frequency of Routes Proposed by Citizens at April 13 Meeting
So what did the citizens say? What routes had some consensus?
Top routes selected by the citizens at the April 13 meeting:
- Broadway Avenue – 5 out of 6
- Sheridan Avenue – 5 out of 6
- Walker Avenue – 4 out of 6
- N. 10th Street – 3 out of 6
- Stiles Ave – 3 out of 6
Interestingly, if you take a closer look at the individual maps, you find that a majority – 4 out of 6 of the groups – selected both Broadway Avenue and Walker Avenue as a north-south pair with Sheridan Avenue and/or Reno Avenue serving the accompanying east-west connection (#2). In fact, most of the routes are also similar in their use of straight lines and few turns (#3). Given the number of possibilities, to have such a consensus on preferred routes is incredible. It certainly got my attention. But apparently did not impress the consulting team.
APRIL 29 MEETING
The consulting team returned at the next meeting and provided the meeting participants with north-south and east-west route options. There were six north-south route options presented by the consultant – see options – but the Broadway/Walker pair favored by a majority of citizen groups at the previous meeting was not included, and there does not appear to be any explanations as to why. The consultant presented these route options and then, once again, asked the citizens to work in groups to sketch out their own route proposals.
Figure 3 – Routes Proposed by Citizens at April 29 Meeting
Figure 4 - Frequency of Routes Proposed by Citizens at April 27 Meeting
Once again, the citizens showed a very clear consensus on routes with at least 5 out of 6 groups proposing a route that included Broadway, Walker and/or Sheridan. The bright red line – visible in Figure 4 – outlines the core of a simple system on which the majority of the public participants agreed (#4). When you combine the preferred routes from the April 13 meeting with these proposals from the April 27 meeting you get the following:
- Broadway Avenue – 10 out of 12
- Walker Avenue – 9 out of 12
- Lincoln Boulevard – 6 out of 12
- Walnut Avenue – 5 out of 12
- Hudson Avenue – 5 out of 12
- Stiles Avenue – 4 out of 12
- Robinson Avenue – 1 out of 12
- Sheridan Avenue – 11 out of 12
- N. 10th Street - 8 out of 12
- Harrison Ave – 6 out of 12 (#5)
- N. 4th Street – 5 out of 12
- N. 13th Street – 4 out of 12
- The Boulevard – 3 out of 12
So what is the public saying? The only routes shown on a majority of the citizen’s proposals were Broadway and Walker running north-south, and Sheridan and 10th Street running east-west. Also noteworthy is the strength of both Lincoln and Harrison, which speaks to a desire by the public to connect to the Health Sciences Center complex (#6). And once again I will point out the public’s consistency in producing simple systems made up of straight-lines and few turns.
MAY 11 MEETING
At the May 11 Meeting the consultants presented three “conceptual” alignments – see Figure 5 – that were “drawn based on input from past public meetings and the results’ of [the consultant's] analysis.”
Figure 5 - Consultants Conceptual Alignments Presented at May 11 Meeting
Of the three “options” presented, none include the Broadway/Walker north-south pair favored by the public. In fact, only one includes N. Broadway at all, despite the overwhelming support of the public for this route. And while Sheridan is partially included in all three options, none of the consultant’s three options use the straight route on Sheridan found in the majority of the proposals by the public. Also gone is the simplicity of the system favored by the public’s proposals, replaced by an ever-winding path of turns and loops reminiscent of our much maligned rubber-tire trolley system. Some of this winding is done in order to incorporate two options with a Boulevard route, even though this route had little support from the public. According to the meeting summary, Option #1 was the favorite of the citizens in attendance. However, the summary also mentions that a number of concerns were vocalized, including a plea for Broadway to be used instead of Robinson. Of course, this begs the question: how could the consultants take the input of the public which favored Broadway in 10/12 compared to Robinson in 1/12, and decide Robinson was the better choice? Surely the citizen’s input is worth more than that?
MAY 27 MEETING
It was my hope that the routes to be presented at the May 27 meeting would revert back to the public’s wishes and provide a simple system incorporating Broadway/Walker and Sheridan, but the newest “options” – see Figure 6 or download pdf – continue to stray from the input given by the citizens. While the exclusion of Broadway has been changed in 2 out of 3 of the options, the clean Broadway-10th-Walker connection favored by citizens is confused in a series of interconnected loops and bends. And the continuous east-west connection along Sheridan that was preferred by the citizen groups is forfeited, it would seem, so that two of the options can include a Boulevard route. There is no simplicity, few strong corridors, and very little evidence of citizen input.
Figure 6 - Consultants Final Options Presented at May 27 Meeting
These routes will be presented by the consultant today – Thursday, May 27 – in public meetings held at 11:30am and 6:00pm in the City Hall Council Chamber. While the consultant will no doubt claim that these routes were “created using the input received from citizen surveys, hands-on exercises and through open discussion,” all evidence points to the contrary. This is not an insignificant fact. The consultant’s “options” will be placed in the hands of decision-makers that select the final routes and they will be told this represents the public input received during the Let’s Talk Transit process. Mr. Cain stated at the beginning of the process that these meetings are being held so that “the public can have a voice,” but what good is a voice, if no one will listen (#7).
- Give it up for the meeting planners and public relations team. Thank you!
- The April 13 groups that included Broadway & Walker for N-S, with Sheridan and/or Reno for E-S are: 1, 2, 3 & 5
- This typically provides a system with higher degrees of legibility for the user
- Once again, notice that the public recommends simple routes with few turns
- A Harrison line typically connects east-west via N. 4th Street or north-south via Walnut Ave.
- I have heard a lot of people say that even though the HSC has no housing or retail attractions, it makes sense because the workers will ride the trolley to lunch in Bricktown. Sounds great. However, it will take at least one mile of track – or $20 million – to connect to the HSC. And with a 127 passenger capacity and no better than 10 minute frequency between cars, you will not see more than 500 riders per day (or 500 x 250 work days = 125,000 riders per year). Even at municipal bond rates (5% per year on $20 million) this works out to a cost of $8 per rider per year in infrastructure investment (not including operating costs). And the likely routes feature comparitively very little in adjacent development opportunities
- Thank you to Steve for giving me the opportunity. And once again, I apologize for the length of my post(s).
I’m betting yes. And this bet was placed even before Richard Mize’s story on Saturday that detailed how committed Devon CEO Larry Nichols is to selling the current headquarters at Sheridan and Broadway.
It has seemed as if all along this was one big chess game with a lot of moving pieces. Consider for a moment that the expansion of the former City Center West garage (now a part of the future Devon complex) creates a potential glut in parking on the east side of the central business district.
The Santa Fe Parking Garage, currently maxed out, will suddenly have hundreds of empty spaces – unless. I could say “unless” James Cotter, owner of Chase Tower (oh, excuse me – it’s Cotter Ranch Tower), is able to fill up the half of his building to be vacated by Devon.
Don’t count on that happening too quickly for a lot of reasons ….
Or maybe it will be “unless” First National Center is fully leased. Pretty much everyone would love to see this happen. But don’t hold your breath.
Or maybe it will be “unless” the former Mid-America Tower – currently home to Devon – is filled up by a new owner. And this is something Nichols could control. So consider that the same Devon tower tax increment finance district that is fueling Project 180 also has $40 million reserved for luring a corporate headquarters to downtown. And also consider that the city has plans to apply for matching funds – potentially millions more – from the Oklahoma Local Development and Enterprise Zone Incentive Leverage Act. And add to all this the GOLT bonds passed by voters a few years back that could allow for even more money (again in the millions) to go toward such a corporate headquarters relocation.
Now consider this key statement from Richard Mize’s column on Saturday:
Devon real estate director Todd Glass said they hope to sell it to an owner-occupier by the end of the year.
Now isn’t that an interesting little tidbit? If this comment were attributed to any other company in town, I’d say, “well, isn’t that nice? Hope is a wonderful thing.”
But with Devon, it’s something different. This is a company so conservative that its founders forgot to take photos of themselves as they built what is now a powerful Oklahoma City corporate headquarters. This is a company that shies away from making promises – “UNLESS” – (there’s that word again) – they have good reason to believe such promises will come true. It’s a company that believes in doing more than hoping. So when someone with Devon says they “hope” to get something done …
I’ve placed my bet. And the addition of up to a few hundred more executives downtown as part of a corporate relocation may be the next big boost for revival of the urban core.
Don’t be too surprised if parking at the Santa Fe garage remains daunting for years to come.
For months now we’ve had discussions on OKC Central in which we’ve scrutinized different plans for a potential MAPS 3, asked difficult questions and discussed differing visions on what downtown should look like in the future.
Today this blog takes a different direction.
I’ll still be delving into the daily events, happenings and items of interest involving downtown and the urban core. But when it comes to MAPS 3 and the future, I’m going to be silent. From here on out, this blog will instead feature guest posts from people of different backgrounds. And I’m going to ask each person to write on the same topic: What should downtown Oklahoma City look like in 2020, and how can this vision be best achieved?
The next couple of months may very well be a critical turning point for downtown. I look forward to seeing how this new discussion evolves.
Last night while speaking at MidTown Rotary I was asked what will be on a MAPS 3 ballot. I will tell you what I told them: if you want the items on this ballot to be decided by this city’s top business and civic leaders, then stay quiet. If you want the council and mayor to reflect your wishes, then NOW is the time to let them know what they are.
To date we’ve heard the following items pushed for a MAPS 3 ballot:
- $450 million to $600 million for a new convention center (this one is almost a certainty being pushed by Mayor Cornett and the chamber).
- $79 million for a new State Fair Park exhibit hall (question: why can’t this be funded by the permanent hotel room tax?)
- Unspecified amount for river improvements (this one has strong momentum among the city’s civic leadership).
- Unspecified amount for a central park (which many say is Mayor Cornett’s desire for a “legacy”).
- Unspecified amount for an extension of the Bricktown Canal which would connect Bricktown with a new convention center, Ford Center and the Myriad Gardens. This one has been supported by Urban Neighbors, the Convention and Visitors Bureau, the All Sports Association. But it has not gained a lot of visible support by the mayor or civic leaders.
- Transit. Many say a poor presentation by COTPA’s Rick Cain seriously hurt this proposal, but Cornett insists there will likely be a transit “component” on a MAPS 3 ballot. But what does this mean? Supporters are suspicious.
You can email Mayor Mick Cornett at firstname.lastname@example.org or call his office at 297-2424. Other council members’ contact info can be found at www.okc.gov.
You’ve been advised.
What’s encouraging is that while the numbers on the tour are down (probably due to the weather), I saw some genuine potential buyers. I really enjoyed stopping in at the old downtown library, which Judy Hatfield is converting into retail and condominiums. Hatfield reports she’s been delayed by having to file a “friendly lawsuit” against the city and county to secure air rights for roof-top patios. That task is now completed, and Hatfield is still hustling to try to get construction underway by winter.
Downtown is still doing well. Sure things are a bit more uncertain these days, but what I saw yesterday indicates we’re far from dead.
Yes indeed friends, Roy Oliver really is building residential condos on the top floors of City Place. See the Richard Mize story here. Wouldn’t it be cool if the California owners of First National got the same idea for across the street?
Breaking story today about study suggesting up to $400 million be spent to build a new convention center. More coverage in tomorrow’s paper. So what do you think? Should this be the centerpiece of a MAPS 3? If so, when should it hit the ballots? Or should we simply stick with what we’ve got?
Where would you like a see a new convention center built? What should be done with the existing building?