Looks Aaron Yashouafar has another extension to paying up the $12 million to Capmark Bank to retain control over First National Center. But what we don’t know is for how long. Yashouafar said we will know what happens “in a few days,” while Capmark attorneys could be heard telling their potential receiver, Jim Parrack, it would be a “few hours.” Either way, all I’m getting from sources is that Yashouafar isn’t ready to surrender yet. Attorneys for both sides and Judge Bill Graves all declined to comment.
Folks, there is no ideal time for me to take a couple days off. When I planned my brief departure from civilization, it appeared as if the extension deadline for Aaron Yashouafar to pay off $12 million to Capmark Bank or lose control of First National to a receiver was to take place on Oct. 4. Instead, it took place on Thursday.
So what happened?
First things first: the judge is Bill Graves. Let me repeat that: the judge is Bill Graves, who was first elected to the bench in 2007. I’ll put his name in bold face capital letters each time I mention him as I detail where things are at.
So Aaron Yashouafar’s attorney showed up for the hearing, Capmark Bank had Jim Parrack ready to claim receivership, and the money was NOT paid up. According to the legal agreement by Aaron Yashouafar, he promised he WOULD NOT contest it going into receivership if he did not pay the $12 million by the May 27 deadline, which was then extended at the agreement of Capmark three times.
During that time, Yashouafar has submitted a guilty plea to felony embezzlement involving a senior citizen condominium complex in Las Vegas. I reported last week he is under federal investigation in connection with documents Oklahoma City officials suspect were faked to claim asbestos removal funding.
So Yashouafar’s attorney shows up in the Oklahoma County courtroom of BILL GRAVES. And the attorney, sources tell me, informed JUDGE BILL GRAVES that the money wire they were awaiting had gotten “lost” and that they need more time to find it. JUDGE BILL GRAVES then extended the hearing – not to Friday – but to 11 a.m. Monday.
Sources say they are concerned Yashouafar may be using this delay to find another source of funding. But here’s the deal: the receivership hearing was already started, and this is a continuation of that hearing. JUDGE BILL GRAVES, sources tell me, has the discretion to call an end to this chapter of the First National story on Monday and have a receiver appointed, as previously agreed to by all sides of this dispute, to sell the property to a new owner. JUDGE BILL GRAVES also could decide to extend this story further and give an admitted felon the chance to find the money to retain control of a property considered one of the city’s most historic important landmarks.
Here’s a reminder of what’s at stake in the courtroom of JUDGE BILL GRAVES:
With so much going on with Aaron Yashouafar, owner of First National Center, pleading guilty to embezzlement and facing loss of the downtown landmark, it’s difficult to get every detail into print. I’ll let the following Nevada television news reports tell “the rest of the story” on Yashouafar’s embezzlement of money from senior citizens.
It all began, it appears, with a raid by the FBI on an old fashioned condominium complex in Las Vegas known as Paradise Spa. That occurred in early 2011. When it comes to reporting on the Las Vegas legal actions, KLAS-8 seems to have the best coverage.
The excellent reporting by KLAS-8 continued with this report on how the mostly elderly residents at Paradise Spa then faced eviction:
| 8 News NOW
Next, Yashouafar is yanked from his role as head of the Paradise Spa condo association, ban from other condo boards for three years:
| 8 News NOW
The reporting continues with KLAS-8 beginning to link the Paradise Spa situation with another Yashouafar controversy at the Sky condos in Las Vegas – and with the troubles at First National Center:
| 8 News NOW
Charges were filed in December, and now, a guilty plea. So what’s next? Yashouafar has until Aug. 17 to come up with $12 million to pay off his lender, Capmark, or lose First National. One question: are there any Oklahoma City players coming to Yashouafar’s aid? And if there are, and if they succeed, what will be the community response to such efforts that result in a man who has plead guilty to embezzlement, a man who has filed multiple bankruptcies, faced tenant revolts, keeping control of First National?
When John Hefner worked a brief stint as a young man in The Oklahoman newsroom, the rules were pretty clear. The reporter got to report and write the news, the person being covered … well, they got to read the stories written by the reporter in the morning paper like everyone else.
In 2011, the rules seem to be changing on a daily basis. With blogs and social media, the wall that once stood between a reporter like myself and regular readers came crumbling down. We talk. We communicate. We exchange ideas.
My latest story on First National Center details concerns by Hefner and a slightly larger tenant, Devon Energy, about the upkeep of the property and the safety of its elevators. But thanks to the advent of “new media,” this blog also provides an opportunity to a guy like John Hefner to tell his own story. And as you’ll soon discover, John is still a pretty decent writer ….
REASONS THE HEFNER COMPANY, INC IS LEAVING THE FIRST NATIONAL
BY W. JOHN HEFNER
In occupying a suite on the 25th floor of the First National Center since early 1999, the employees of The Hefner Company, Inc. have seen the building in the hands of three different ownership groups, but will not be sticking around for the next one.
“Our last hope was that with Milbank Real Estate going into bankruptcy, we would get a new owner who would be both able and willing to make vital repairs and restoration to this historic structure. However, the bankruptcy drags on to no avail, and we have made irreversible plans to move elsewhere,” said W. John Hefner, company president.
The elevators continually malfunction, stopping on floors not selected, going the opposite direction, and even not working. “On Thanksgiving Day 2010, I had to come downtown quickly to get something I had forgotten. It took a security guard to get the elevator system to even come to life. He took me to the 25th floor and held the car. I was back in a flash. The doors did not just close – they slammed shut, and we were taken up to the 30th floor where operations stopped. We clawed open the doors, held them open for each other so we could get out, and they slammed shut behind us. We walked down 30 flights of stairs,” Hefner recalled.
He added that since that time, while he has seen repairmen from two different companies work on the system from time to time, on-going-bugs plague the system. “I have asked the workmen discreetly and have learned that some of the 1956 technology (when the elevators were converted to automatic from manually-operated) remains as ‘some’ vacuum tubes are still in place. That pre-dates transistors, and I can’t believe vacuum tubes are even available. No wonder there are problems,” he said.
The Hefner Company, Inc., by pure coincidence, leased the exact suite the company had occupied in the years of 1949-1956. Some of the same furniture was returned, and the situation seemed good.
But, Hefner said, his first meeting with the Milbank management went sour when he asked Raymond Yashouafar, Vice-President of Operations and Simon Barlava, Asset Manager, if they paid their bills on time. They became angry and red-faced. “They said they were highly insulted, and they stormed out. At the time, I thought I made a grave error, but since then, I read in the newspaper from time-to-time about vendors filing suit for non-payment, and I have talked with vendors I know who told me about difficulties collecting.
“What is especially egregious is that the thick marble floor at the Robinson entry was jackhammered out, and cheaper flooring was put in. Yet, straight above that floor one can see the original art-deco paint on the ceiling is peeling badly. That goes ignored. Even new carpet for the elevators cars would have been an improvement, but it did not happen.
“I have written letters to the men in California, and I have yet to receive a response. Meanwhile, the commercial concourse has been partially torn out, but not completely finished. Here, wood paneling was removed, and white sheetrock was installed. It has been three years! The bottom line is that these landlords have hurt themselves and not helped stabilize a downtown Oklahoma City landmark,” he concluded.
With all the uncertainty about the building’s future, poor decisions being made with expenditures, and his employees being highly concerned about getting stuck in the elevators, the company is leaving for good.
Leave it Anthony McDermid to come up with the most unique idea I’ve heard yet on what to do with the Great Banking Hall at First National Tower.
It’s difficult to explain this idea without a photo – and fortunately Anthony has provided us with a guide. The Royal Exchange Theatre in Manchester England is a theater within a theater. Could the Great Banking Hall serve as a similar host?
Here’s more information from Wikipedia:
This is a seven-sided steel and glass module that squats within the Great Hall of the Manchester Royal Exchange. It is a pure theatre in the round in which the stage area is surrounded on all sides, and above, by seating.The theatre can seat up to 700 people on three levels, making it the largest theatre in the round in Britain. There are 400 seats at ground level in a raked configuration, above which lie two galleries, each with 150 seats set in two rows.As the floor of the Exchange would not be able to take the great weight of the theatre and its audience, the module is suspended from four massive columns that also carry the hall’s central dome. Only the stage area and ground-level seating rest on the floor of the hall itself.
Yes, the clock at First National is ticking again – we are glad people have taken notice. More changes are in the works.
First of all, we would like to thank the majority of our tenants who are applauding our efforts to enact the first real improvements to this building in a long time. A common thread among many diverse projects we have undertaken across this great country is quality. We will not compromise quality and we will deliver what we promise.
We would like to address a number of discrepancies at this time, starting with the topic that speaks the loudest: money, and in this case – rent. The market dictates pricing in every industry, not just real estate; in turn, proper pricing brings in quality. We are charging what the market will bear, and the market is bearing it. The First National Center has been passed through a number of hands, but we are the ones who have made the biggest financial commitment of the last 25 years.
We have committed our finances, our resources, our personnel and our time to starting this effort off right. Doing it right means doing our research, which means taking out the controversial marble in the West entry hall. The original design matched the marble that graces the floors of Grand Banking Hall, and despite the unfounded allegations of a few, we are committed to restoring the First National Center to its historical character, including the flooring in the West Building’s entry.
Of course, we are still learning about this great building every day and we welcome comments from our tenants. We know there are challenges; although, we prefer private meetings to public chastisement. Our office is located on the third floor above the Grand Banking Hall.
Please, stop by.
First National Center is the largest footprint in commercial square feet in downtown Oklahoma City and the sheer size of the building makes any renovation a lot to bite off.
Instead of telling our tenants that we’ll take it all on and appearing to break our promises we have decided to phase in our improvements and deliver on these promises in measurable stages.The clock may be ticking, but we are in the business of quality, not slipshod. Quality takes time. Don’t judge us now; judge us a few years from now.
Read more about First National Center and views of upcoming improvements in Tuesday’s Main Street column.
First National Barbershop, earlyday photo, Norman Thompson collection, courtesy of Doug Loudenback. The barbershop was largely unchanged when it closed last year after a rent dispute between the operators and the building owner. The space remains dark one year later, and the owner says he does not rule out eventually gutting the space for a different use. First National Center is currently about 60 percent vacant.
Re: First National Building
120 N. Robinson
At 55, I do not consider myself to be so old that I live in the past, yet I do have appreciation for great things that were created before I was born, and certainly that is the case with historic buildings. When the First National Bank Building was constructed in 1931 at great expense, it was truly an “A” class building, and both the exterior and interior features revealed it. Since it was so high-end, and not average, people wanted to lease space in it. As the Great Depression ended, the building filled up, and there was a waiting list time and time again. Before I was born, relatives of mine from both sides of the family worked in the building; my mother’s older brother was an officer with the First National Bank, and my paternal grandfather, uncle and father leased a suite for The Hefner Company. My childhood was filled with endless trips through the building, and year after year, I loved seeing a huge, decorated tree in the Great Banking Hall at Christmas. When I began my own career, it was not long before I reported to a land company in the newer section, the middle building. In the early 1980s, during yet another oil boom for Oklahoma City, I could not walk from one end of the ground-level arcade to the other without running into numerous people that I knew. Such meetings were so helpful in the conduct of my business. Overall, it was great fun working downtown. What changed? The crash of that oil boom carried the First National Bank with it. The building had, as I remember, 33 lenders. The ownership changed and changed again. There were issues of “deferred maintenance,” and certain things had become obsolete simply by the passage of time. One group stepped forward and bought the building, but actually just wanted the “cash cow” of the adjacent parking garage. So, this group kept the cash-producing asset that could have been used to slowly, but surely renovate the building, but got rid of the building itself. That was such a damaging turning point! Several owners since then have failed to have the vision to see that this architectural gem was built to be an “A” class building. Sadly, more “minimalist maintenance” came with the passage of time. As the structures on other corners have achieved lower vacancy rates, the First National has not. Over the years, landlords of the First National have let The Beacon Club, the Post Office, a travel agency, and other amenities slip away from their spaces. Key law firms and oil companies have left too. The current owners lost the barber shop; today, I know of two other tenant-service enterprises planning to leave.
The current owners, as far as I am concerned, have been big on promises, but minimal on spending what is needed. I feel that they, too, do not see the Class “A” fundamentals of the building. A couple of times, I have tried to convince these Los Angeles-based owners to spend money for quality renovations, yet I failed. I have asked for the once-operational elevator security system to be repaired, but it has not. Instead, I find their attitudes are reflected by policies of getting the building locked up as soon as possible at night and on the weekends, as well as shutting off the heat and air immediately at the end of “the business day.” In-house retailers of clothing, coffee, even massages cannot get people inside very easily at all on the weekends.
Last week, while historic art-deco paint continued to peel, and old, stained carpet remained in place in the elevator cars, the owners announced a “Phase I” renovation plan to begin on March 12, 2008. Expensive signs were placed on walls throughout the building saying “First National reborn.” There was a reception for the tenants, but I was too ill to attend.
I learned later, to my great shock, to begin this “renovation,” the press photographed Lt. Gov. Jeri Askins operating a jackhammer blowing holes in the marble floor in the original part of the building! What was she thinking? What are the owners thinking? The marble floor is part of that “A” quality! Why would the owners break up big squares of marble? The money needed to replace this quality flooring could be spent instead of restoring the 1930s art-deco paint design that is peeling above!
And, there is a 1960s era middle building that is in dire need of getting the basis repaired. Why jackhammer a perfectly-good marble floor? I would have thought the Lt. Gov. Askins would have had a better understanding for things that are not only high-quality, but also historic.
A spokesperson for the management defended the action to me in my phone call, but only convinced me the owners do not understand the attraction of “historic” and how important that could become in making the venerable First National as an office address people prefer. Furthermore, a restoration (not a budget-minded partial remodeling) would restore the long-lost trust that potential tenants could feel through watching –finally – some First National owners spending enough money and spending it correctly on making things right. In my business career, I have learned that “attraction” works far better than “promotions,” and I am deeply troubled that the current owners are willing to do irreparable harm to this Oklahoma City landmark in favor of the latter. Restoration of the original quality is the missing ingredient for the future security of the one and only First National. Steve, I would like to thank you for taking an interest in the preservation of the historic First National Center.
Sincerely, W. John Hefner, Jr
Read more about this in today’s Main Street column.