Waiting for confirmation, but Preservation Oklahoma is reporting the effort to amend the suspensions on historic tax credits has passed. Story developing…
Still hung up friends… not sure why the bills aren’t getting voted on yet.
By now hopefully many of you have read my story about the potential impact of the planned two-year moratorium on the use of historic tax credits and my column on how it might kill redevelopment of the old Bond Bakery.
So, how could this hurt projects already underway?
Critics of this move say the two-year moratorium will be most punishing to those developers most active in redeveloping older buildings. Here’s why:
A developer buys an empty 10-story building in 2007 for $1.5 million. They spend three years working with the state’s Historic Preservation Office to get approval for designs that meet the requirements to obtain a 20-percent state historic tax credit and a matching 20-percent federal historic tax credit.
Renovation of the 100,000-square-foot building comes out to $140 per square foot – or $14 million. The tax credits are deemed critical to covering a funding gap that can not be financed through traditional means, and in this scenario developers interviewed by The Oklahoman say adaption to basic lofts could easily lead to a gap of up to $7 million.
This fictional project would likely qualify for state and federal historic tax credits each adding up to $2.6 million.
Assuming all additional financing is obtained through other means, XYZ Bank buys the federal and state tax credits knowing the credits can not be realized until the renovation is completed and a certificate of occupancy is issued by the city. The developer guarantees to over the tax credits if they don’t materialize. If the tax credits are approved in advance of the project and the renovation is done as planned and promised, there is rarely ever any risk to making such a guarantee – the developer is moving forward with the full faith and credit of the state.
If the moratorium goes into effect, even if the project has been approved for tax credits, developers who are midway through construction could find themselves in default of such agreements if, as in this case, the developer couldn’t personally cover the state tax credit of $2.6 million because the tax credits are frozen.
If this is all too complex to understand, let’s put in simpler terms we can all understand.
Imagine that you took advantage of the appliance tax rebate program last week. You could only afford to pay $300 for a new washing machine – but you bought a $500 washing machine by taking advantage of the $200 rebate promised by the federal government. Now imagine, after using the washing machine for a few months that the big box store called you up saying you owe that additional $200 because the feds failed to deliver on that promised $200 rebate. You did everything right. It’s the government that is backing out on the promised deal they made with you.
That’s what developers are facing across the state – only instead of owing $200, the amount will be in the million.
Legislators seem to think that developers stung by this will agree to using the historic tax credits when they are resumed in two years. Don’t be so sure of that. State historian Bob Blackburn suspects many of those developers won’t survive the above scenario and those that do will likely abandon historic renovation projects for years to come instead of believing in the full faith and word of the State of Oklahoma.
So how does this impact downtown Oklahoma City? Ask yourselves about how all of this might affect the future of the Bond Bakery, the old Sunshine Cleaners, the Fred Jones factory, the Rock Island Plow Building and the First National Tower.
And to those of you spending all of your time worrying about the fate of the buildings being targeted for demolition by SandRidge Energy – you’ve got a lot more to worry about.
Just got a call from a representative of the Preservation Oklahoma alliance fighting SandRidge Energy’s efforts to tear down the former KerMac, Indian Temple, YMCA and Petroleum Club Buildings on the SandRidge campus.
The group will hosting a “building hug” and giving out free “keep downtown urban” shirts to the first 200 to show up at the gathering at Robinson Avenue and Robert S. Kerr Avenue at 12:30 p.m. Monday.
This alliance also has a website on the discussion: www.keepdowntownurban.com.
Charles Hill at www.dustbury.com provides a recap on the SandRidge demolition plan, and then provides this quote from the legendary planner William Whyte:
It is significant that the cities doing best by their downtowns are the ones doing best at historic preservation. Fine old buildings are worthwhile in their own right, but there is a greater benefit involved. They provide discipline. Architects and planners like a blank slate. They usually do their best work, however, when they don’t have one. When they have to work with impossible lot lines and bits and pieces of space, beloved old eyesores, irrational street layouts, and other such constraints, they frequently produce the best of their new designs — and the most neighborly.
And to this Mr. Hill makes his own final comment:
Any fool can hire a bulldozer, and many do.
What if, I was asked today, SandRidge Energy had chosen to build a new corporate campus as so many others have done, and left the Kerr-McGee campus a dark shadow over downtown?
Good question. Here’s another question I got hit with this past week: why are you demonizing anyone who disagrees with your outlook on downtown development?
Ouch. That second one hurt. But I won’t say it’s a bad question. It is one that gives me pause.
That’s not my intention here folks. In the battle over the SandRidge Commons project, I don’t see it as good guys and bad guys. I see it as “are all the right questions being asked? Is there a thoughtful deliberation going on before decisions are made?”
I have asked questions and posed challenges that I know have irritated people I like, admire and respect at SandRidge. This is unfortunate, but it also goes to show I’ll do this sort of thing regardless of the subject. Some of my closest friends will point out that I give them the hardest time and subject them to the worst scrutiny.
That’s my job. I’ve also caused some grief to the “underdogs” in this fight – the preservationists fighting the SandRidge demolition plans.
But I’m not trying to “demonize” any of these folks. Truth be told, we could have ended up with a situation where an entire block became blighted, where the north half of the central business district could have entered a slow death.
So let’s answer that first question.
First off, the block would be miserable. Efforts by Rick Dowell to revive the old Midland Mortgage Building would have been more likely to fail being next to an abandoned Kerr-McGee block. Dowell reports that interest is picking up in his long empty building – itself one of Kerr-McGee’s better contributions to the skyline in the 1960s – thanks to the SandRidge Commons plans.
I believe Rick. And for those of you who don’t know Rick, trust me when I say he has never shown an interest in insincerity. He says what he thinks, and doesn’t really care at all (sometimes to his detriment) about how the rich and powerful might be annoyed by his remarks.
If SandRidge had never come downtown, Rick Dowell’s building would likely remain empty for years to come. If it comes to life over the next couple of years, as he anticipates it will, then it’s not a big jump in logic to credit part of that revival to SandRidge.
One can not fully appreciate SandRidge’s renovation of the main tower itself. It was badly outdated. The decor was straight out of the 1970s with horrible retractable wall systems. It was an ominous place even when Kerr-McGee was still around.
Renovations aren’t complete, but what’s been done seems to impress all who see the tower. And the workforce is happy, vibrant and part of the downtown community. That can’t be said about Kerr-McGee for it’s final dozen years. It was a tomb, a depressing and oppressive environment for those who visited.
We also know that the SandRidge Commons plan isn’t all demolition. By all accounts the planned renovation of the Braniff Building is a stellar example of proper preservation (of course we won’t know everything until it’s done). And the company is planning no ordinary piece of architecture to replace the 120 N Robinson building (the combined parking and office structure that was once home to the Petroleum Club).
So what we may have here is a bit of inadequate public relations. Or maybe it’s to SandRidge Energy’s credit that nobody with the company has pulled the line of “just be grateful we came downtown.”
They could have.
Here’s another odd bit: when members of the Triangle Development group had the deal to renovate the older Kerr-McGee properties into housing, they had gotten so far as to get tax increment financing to tear down the former YMCA building and its connector structure to the old Kermac Building. The partners also were hinting, but not saying, that they had no intention to rush into renovating or preserving the old India Temple Building (privately they were saying the same things being said now by SandRidge).
So why was there no protest then? Essentially the Triangle Group was only proposing to save one more building (Kermac) than what’s being saved and renovated by SandRidge. But under that scenario we’d still have a dying Kerr-McGee tower that had fewer and fewer people inside and was adding less and less to the neighborhood.
Maybe I should have written this post sooner. But I was counting on SandRidge Energy making its own case and pointing out the obvious. It didn’t happen. So here it is – feel free to now debate and throw more tomatoes at the author.
While no other buildings have the architectural significance of Little Flower Church and Union Station, several notable older buildings, such as the Latino Community Development Agency building, contribute to the character of the area and could be incorporated into development projects if economically feasible.”
Yes, yes, I know it’s in downtown Tulsa, not in downtown Oklahoma City. And yes, I realize there are those of you who might take this post as a sign that OKC Central is being taken over by the Tulsa World. Now, relax, and take this as it’s intended – an interesting glimpse at the renovations underway at the Mayo Hotel in Tulsa. It’s a cool project, and the Mayo is to Tulsa what the Skirvin is to Oklahoma City. Both hotels share glorious pasts through the 1960s, only to be sadly neglected in the 1980s and 1990s. We all know about the Skirvin’s rebirth; it’s interesting to compare it to what’s underway at the Mayo.
The player, by the way, is a bit weird. Just hit the first button on the left bottom row that says “Mayo.”
They say that all journalists are cynical and are harbingers of only bad news. I’m not arguing that my profession probably deserves a lot of the criticisms it gets day to day. But I’ll be the first to admit I’m the type to root for the underdog. And Marva Ellard was definitely the underdog when she bought the Sieber Hotel more than a decade ago. Once a MidTown landmark, at 1305 N Hudson, the property was a mess by the 1990s.
For whatever reason, Ellard had plenty of doubters. Two city council members seemed intent on sinking her project at one point. Other downtown developers tried to place doubt as to whether she could ever pull it off.
And yet Marva pulled it off. I had a lot of fun covering this this past decade, and in conjunction with my coverage today, I thought I’d share a pictorial journey through the good and bad times of the Sieber Hotel.
The Sieber Hotel during its “glory days.”
The Sieber Hotel – during not so glorious days (circa 2001)
Marva Ellard gets to work on the lobby.
This building will not fall!
Marva Ellard looks upward at the skylight in the Sieber lobby - maybe for some divine guidence….
Window restoration – one of the most complicated and expensive items on any historic tax credit project, begins (circa 2007)
The old mosaic tile floor in the Sieber lobby is revealed to be incredibly intact.
The former Sieber butcher shop and grocery, once barely standing during early renovations, is back in top shape by fall 2008.
The completed lobby – one of many wonderful photos shot by Paul Southerland during a recent tour.