Ballpark's Financing Arranged

[DowntownNow]

Posted today...

Ballpark's financing arranged
The Tulsa Community Foundation will buy a $25 million bond from the stadium trust.

By P.J. LASSEK World Staff Writer
Published: 12/5/2008  12:00 AM
Last Modified: 12/5/2008  2:29 AM

The Tulsa Community Foundation will take on a second role in the development of the downtown ballpark by financing $25 million of the $39.2 million needed to build the stadium.

"Tulsa Community Foundation's investment into this downtown stadium helps assure quality civic and economic enhancement in the core of our city," Phil Lakin, the foundation's executive director, told the Tulsa World on Thursday.

Lakin said the foundation, a tax-exempt public charity, agreed to provide the financing after the Tulsa Stadium Trust did not receive any bids from 27 prospective lenders.

The trust is to vote Friday to approve the financing and the sole construction bid — which it also received from the foundation.

The foundation submitted the construction bid under the name Tulsa Stadium Construction Co. LLC, a limited liability company composed of the foundation and Manhattan Construction Co.

The foundation's 26-member board makes up the membership of the limited liability company, with Lakin and Bob Jack of Manhattan as its managers. Manhattan also is a donor to the ballpark project.

The Stadium Trust is overseeing the $60 million project, which includes construction of a 6,200-seat stadium for the city's Double A baseball team, the Tulsa Drillers, and the purchase of nearby land for development.

The $60 million will come partially from $30 million in private donations and $5 million from the Drillers' lease.

For the rest, the Tulsa Community Foundation will purchase a $25 million bond from the trust with a loan from Bank of Oklahoma. The bond will be repaid over 30 years through fees collected from a downtown property assessment.

Lakin said the foundation didn't need to borrow the money but that it didn't want to take $25 million out of its capital because that might curtail some of its other charitable activities in the Tulsa area.

Stan Lybarger, the trust chairman and the president of the Bank of Oklahoma, said the bank's involvement is merely to facilitate the bond purchase because nobody else would.

Although the bank will earn interest from the loan, Lybarger said, the bank is donating $2 million to the ballpark, and "the loan isn't going to provide that kind of benefit to us."

The financing would have been possible by other lenders six months ago, before the international credit crunch, "but people aren't doing municipal-type financing" now, he said. "It's just evaporated."

Lybarger said that the group began two months ago to anticipate the need for alternative financing if the trust received no bids. The trust received approval from the City Council last month to turn to a foundation for financing if necessary.

With the $30 million in private donations committed, "to drop this project at this stage would be foolishness and a missed opportunity," Lybarger said.

"People tend to think that when tough times are upon you, that is when you stop doing things, and that is precisely the time when you should be doing things," he said.

"That allows you to get things in place so when the recovery occurs you're in a position to take advantage of it."

What the public needs to remember, Lybarger said, is that the downtown property owners — by virtue of their assessment fees — and private donors "are giving this whole thing to the city for free, and you just don't see that around the country."

Although many of the project's players are interconnected, no one is personally profiting from it, he said.

Four of the trust's nine members also sit on the Tulsa Community Foundation's board. They are Lybarger, Mayor Kathy Taylor, James Adelson and John-Kelly Warren. These foundation members and others also are donors to the project.

George Kaiser is the chairman of BOK Financial Corp., which owns Bank of Oklahoma. He and other philanthropists created the Tulsa Community Foundation. Lakin said Kaiser was not directly involved in the ballpark project.

"People should worry less about any interrelationships, because we have a charitable organization that has put up the money to do this. There can be no private benefit through the foundation," Lakin said.

Those who support the project think that it is more important to get it done than to worry about criticism over who's involved, he said.

Lybarger said that the donors believe that this project is "very critical to the long-term health of Tulsa. It's all about redeveloping downtown."

"Our determination is that we're going to do everything prudent and appropriate to get to the goal line, and that's why we're pushing it so hard," he said.

"It won't get done if we don't do it."

The trust hopes to break ground before the end of the month. It has a contract with the Drillers to have the stadium ready by the 2010 season.

First let me stipulate that I am all for downtown redevelopment but as a citizens that has been watching this things transpire over the last 8 months, I see an overwhelming Conflict of Interest involved here.  Don't tell me this hasn't been planned for quite some time for it to fall into place like this.  First we don't know when an RFP went out for bids to construct the stadium, next we get a Trust pushed down the Council's throat on the pretext 'this must happen now' and then the Trust sits and waits, the Trust stipulated the terms under which it would issue bonds and received no offers BUT remember, according to the Tulsa World, one bank said had the terms for the bonds been structured differently they would have put a bid.  The Trust manipulated the situation so that only a foundation could purchase the bonds.  Stan Lybarger knew this would happen and even pushed Council for authority to do this and got it.  BOK/Stan Lybarger and his helpers know the standard terms and conditions a typical lending institution would use to determine its ability to bid on purchasing bonds and I'm sure the Trust stipulations were tailored to make it difficult for any other lender to perform, especially in light that the only recourse a lender would have is to attach Trust assets should there be a default, with no liability available on the City's part as directed by Council.  
And don't tell me there is no financial benefit to the donors.  If their money is given to the Foundation, a charitable organization, it is a tax deductible donation.  If this is on the up and up, make sure that the contributions from donors go to the Trust, therefore no tax deduction and it's truly philanthropic.  If that money goes to the charitable Tulsa Foundation then there is an even greater conflict as the Tulsa Stadium Trust members are now "city official" and as such fall under the City's Ethics Ordinance.  That Ordinance states a City official may not have a direct or perceived conflict of interest in an issue in which they have a personal, financial or organizational conflict.  Their contribution becoming tax deductible is a financial benefit and therefore should fall under the personal and financial conflict of interest.  Let's also not forget that BOK/Kaiser and other members of the Trust that are land owners in the immediate area have a considerable amount to gain from this development.  It will, according to their own words, increase property values.  In economics, the closer your property is to a venue such as this, the greater your potential appreciation in value.  Not only is Kaiser interested for this development but it will go a long way to push his other developments (and their value appreciation) being planned in Brady area.
I'm all for developing downtown but the way this is being done scares away other potential developers when a small group are allowed to wield this much power.  Add to that the intermingled and not fully transparent way all of this has been done and I cry FOUL!  This needs to be looked into.

[inteller]

hopefully Rick Westcott (who is a member of this forum and was openly critical of the trust during its formation) will pick this up for additional scrutiny at the next UED meeting.

[DowntownNow]

I'll do ya one better Inteller, I'll send it to him right now and hopefully he will.

[MDepr2007]

Why bother with it?

[carltonplace]

Great, we will have a new ball park in downtown. A pefect catalyst for even more development. DT is coming alive again.

[TheArtist]

I cant follow all the stuff going on, so for someone like me who wants to see the stadium happen... as long as I dont see anyone getting hurt, no laws broken, and do see an abundance of positive benefits, I am glad its a go. As far as conflicts of interest. If you have money, you usually have your finger in many things, have a couple of businesses or ways of making income, investments, charitable organizations, know other people, are connected to other businesses, boards, etc. etc.  and no matter what you do someone can find some connection and holler conflict of interest.

I started noticing a pattern with many of my clients when I asked them what they do. Its not like us "working class" peeps who have a job. They do many things and know a lot of people. Most of them really want the best for Tulsa and contribute to stuff here. Yea there may be some sneaky b@stards and bad apples in the bunch. Yes they can have a tendancy to think they know whats best, often they really do. They do after all know how to make money and if Tulsa does well, they make even more money. Its the times when they still think they know whats best, but dont that gets everyone and it can be really hard for them to tell the difference between when someone is legitimately pointing that your doing something wrong because people raise just as much cain when they are doing the right things. If you DO anything, someone gripes and tries to stop you, so they just start to ignore the griping and finger pointing all together and try to find ways to do things in a manner that will get as little public scrutiny and avoid all the "blocking" maneuvers that the gripers will throw at just about anything you do.

Its a shame that this kind of situation exists. But perhaps its just part of the way things are. One group is going to want to do something, another is going to not want it to happen... and there ya go. People start "being creative". lol And then the lines can tend to slowly shift and blur.

[MDepr2007]

But Artist ,it's also the reason alot hasn't happened here....

[Oil Capital]

Maybe TheArtist should change his name to TheEnabler.

I suppose there MIGHT be a good reason the construction of our new ballpark is substantially higher than any other minor league park ever built (and, yes, that is accounting for inflation), but nobody has been able to divine what that reason might be.

[TheArtist]

quote:Originally posted by MDepr2007

But Artist ,it's also the reason alot hasn't happened here....

Oh, I know that. There is pleeeenty of blame to go around on BOTH sides.

[Rico]

quote:Originally posted by Oil Capital

Maybe TheArtist should change his name to TheEnabler.

I suppose there MIGHT be a good reason the construction of our new ballpark is substantially higher than any other minor league park ever built (and, yes, that is accounting for inflation), but nobody has been able to divine what that reason might be.

C'mon... man, the Ballpark will just be the beginning of something Great for Downtown......!

No matter what the price.

just imagine



That Mercedes parked right up next to the door will be me in 2010.

[sgrizzle]

quote:Originally posted by Oil Capital

Maybe TheArtist should change his name to TheEnabler.

I suppose there MIGHT be a good reason the construction of our new ballpark is substantially higher than any other minor league park ever built (and, yes, that is accounting for inflation), but nobody has been able to divine what that reason might be.

Do you research stuff or just make it up? They are almost done with one in Ohio right now for $55M. I don't know what the land purchase price is, but the construction costs on ours are only $39.2M.

[swake]

quote:Originally posted by sgrizzle

quote:Originally posted by Oil Capital

Maybe TheArtist should change his name to TheEnabler.

I suppose there MIGHT be a good reason the construction of our new ballpark is substantially higher than any other minor league park ever built (and, yes, that is accounting for inflation), but nobody has been able to divine what that reason might be.

Do you research stuff or just make it up? They are almost done with one in Ohio right now for $55M. I don't know what the land purchase price is, but the construction costs on ours are only $39.2M.

The sock's only frame of reference is what Oklahoma City has ever done or spent.

[DowntownNow]

Perhaps SGRIZZLE you could provide the name of the ballpark you are referring to?

I know Michael Bates did some extensive research when the issue was first raised months ago on surrounding area ballparks and found that for similar sized (seats) and simmilar teams, the $30 million mark was prevalent.  No doubt we could go and build a $40 million ballpark but do we really need it?  Would $30 million not suffice?

No one has yet to address that the projected cost has risen from $30 million that was the original projection starting with the Nordam site to the $40 million now projected.  No one has provided the breakdown of services to be rendered to all of the downtown IDL area and their contracted costs over the next 10 years so that we can make sure we are budgeting appropriately and ensuring that those services for the property owners (that are bearing a significant brunt of this ballpark cost) will in fact benefit them and not have to worry about a shortfall 6 years down the road and a cut back in services.  

It seems logical that those costs be worked out first, and whatever is left is the budget from which to work for a ballpark development.  Let's also not forget that they are expensing the purchase of surrounding properties for private development within that projected $60 million.  

Is it going to be:  Ballpark $40 million, IDL Services $10 million, therefore $10 million for surrounding property purchases and improvements?

I'm fine with building a ballpark, dont think we need it and it hasnt been proven in Tulsa that new development of a public facility such as this encourages significant business, residential development (see the area around the BOK Center) but if thats what they want to do, then stick to their ideals that development of such a facility will encourage private reinvestment and development in the area and build just a ballpark, dont convolute it with the surrounding property development if the intent is to promote further development.  

If they feel that development of the ballpark is not enough to spur ecnomic growth and further development without their own assistance, then what is the point?

And to answer SGRIZZLE your land cost question, out of approximately 7 acres of land for the ballpark itself, 5 acres is being conveyed free and clear to the Trust by Tulsa Development Authority, the other 2 acres is being purchased by the Trust for approximately $726,000 since those 2 acres were purchased using HUD CDBG funds and therefore must be purchased for a determined fair market value as required.

[MDepr2007]

The Greenwood Chamber swapped land with whom? ( city?) Why would there be a cost for the swapped land?

[RecycleMichael]

Gary, Indiana...has a fairly new stadium that seats 6,100. It opened in 2003 and cost $45 million to build.

Allentown, Pennsylvania opened a new ballpark in 2008 that cost $48 million to build.

Columbus, Ohio's new park (Huntington Park)opens next year and current building estimates are at $56 Million.

Gwinnett Stadium is just north of Atlanta and opens next year and estimates are at $59 million.