The City as LandLord....

[FOTD]

Of course they're subject to market interest, but investors know that a municipal GO will be paid back because the municipality can and is required to levy for the taxes to pay them. 

There was no vote because the bonds used to buy the building were not GO's and, therefore, a vote was not required.  Just like it isn't required when TMUA issues bonds to improve the water system. 

The City is fortunate that BOK stepped up with the Master Lease whether people believe it or not.

The "dinosaur" of Williams that was "unloaded" cost them, from what I know, in the n'hood of $250 million to build and the City bought the building for less than $60 million.  Old City Hall would have required millions and millions of reinvestment and/or repair if the City didn't move so money was going to be spent one way or the other.  And old City Hall can and will eventually be sold.

Speculation? Is government in the speculation business?

Would a capitalist landlord have committed to Tenant Improvements with a guarantee and collateral? 

Deals like this make me sorry to agree with "we need less government in our lives."

[shadows]

Also, I know of no limit on the amount of GO's the City can issue as long as they are approved by the voters.  No matter the amount, the City levies for the funds to pay the debt, whatever it may be.

I'm guessing you are referring to the limit of 5% of the valuation of taxable property in the city in Article 10, Section 26, however, that limit is exempted in Section 27:

SECTION X 27
Indebtedness for purchase, construction or repair of public utilities.

Any incorporated city or town in this state may, by a majority of the voters of such city or town, voting at an election to be held for that purpose, be allowed to become indebted in a larger amount than that specified in Section 26, for the purpose of purchasing or constructing public utilities, or for repairing the same, to be owned exclusively by such city or town, or for the purpose of constructing, reconstructing, improving or repairing streets or bridges.

That would be MY uneducated take on it anyway.

In all due respect I cannot find were section 27 invalidates section 26 allowing the city to issue revenue bonds to enter into the real-estate marketing to be defined as a public utility.  Even buying a building that the city cannot attach a sign to its exterior is beyond reasoning.  But as passing a city ordinance with an emergency clause, without citing the emergency as interpreted by AG as need, which circumvents the voter's right to petition, is answered by legal with "We have always done it this way".         

The issuing of revenue bonds have been questioned before when the attorney for the airport authority appearing before the city commission on issuing RB's in excess of 90M for a sweetheart deal for AA of which part of the money was to be used in their facilities in another state, informed the commissioners that the city would not be responsible for the bonds in case AA was to default but unless they assumed the liability their credit rating would be reduced.

All information on the sale of the bonds is available under the Freedom of Information Act.  It should be available in the city clerks office but some information is hidden by search fee's unless one knows the exact date the information  was recorded.  If it is recorded on the main frame computer to get a record requires furnishing a blank tape ($20) and $80 dollars or more in search/setup fee's.   The city exercise sovereignty powers over their subjects.

That is the road I have been down.

[nathanm]

(which, imo, were to unload a dinasour from BOK/Williams in some way).

Wasn't One Tech built after the WilTel IPO? Additionally, after the whole entity was bought out of bankruptcy by Leucadia, I fail to see what Williams or BOK has to do with any of it other than being the usual fodder for your conspiracy theories.

[shadows]

I cannot recall if the final figurer was ever made public of the sale and overselling of the stock that was authorized of which the company deleted the equity of the stockholders costing many hardships on citizens who intended  it for their retirement.  The company had only a need for two floors which they are using now and failed to get any interest in leasers for the addition floors.

The entire purchase of the glass cube is shrouded in a thick smoke screen with cost of repairing the old city hall being greatly blown out of  reason  IMHO.

The horse we are beating is dead but the smell will remain in the coming years as the  maintenance cost increase on the poorly constructed glass shrouded building.   

[RecycleMichael]

The horse we are beating is dead but the smell will remain in the coming years as the  maintenance cost increase on the poorly constructed glass shrouded building.   

You think just because the building is glass it will demand higher maintenance costs?

[shadows]

At any time one of those degraded tropical storms can target Tulsa  which in the past moved just west of town with the hail and winds of 100 MPH the building will not be a suitable storm shelter.   As sheet glass ages it changes it careerists becoming more brittle.  In the event of any approaching wind storm I sure would seek shelter elsewhere. 

[Red Arrow]

At any time one of those degraded tropical storms can target Tulsa  which in the past moved just west of town with the hail and winds of 100 MPH the building will not be a suitable storm shelter.   As sheet glass ages it changes it careerists (characteristics?) becoming more brittle.  In the event of any approaching wind storm I sure would seek shelter elsewhere. 

Glass is brittle to begin with.  I don't know that it becomes more brittle with age. Brittleness and strength are not the same material property.  Brittleness defines a failure mode as compared to ductile.

[Wilbur]

The new City Hall at One Tech was supposed to save the City $15,000,000 over ten years.  In order to keep that promise, it now needs to save $16,500,000 over the next nine years, since those 'savings' in the first year was actually a $1.5M loss.

Also, the Mayor recently sent out a note that the BOK Center has made a profit of $1,100,000 in the first year.  Congratulations!  Just 160.8 years to go until that place is paid off.  Only politicians claim a profit without considering expenses in the equation.

No wonder this city is flat broke.

[Wrinkle]

This brings up another question.
The City has a habit of "self-insuring" everything.
That means that if disaster happens, the City (we) pay it out
of cash reserves.

Such it is when a police car, firetruck or other city vehicle is involved in a collision, or they run into each other (as seems to happen fairly frequently here).

I would think, in a commercial enterprize such as a 'public' building being leased to private businesses, a self-insurance arrangement would bring an entirely new set of liability potential to the City. And, we also now know this building my be more sensitive to environmental occurances, such as high winds, which may cause damage.

Makes me want to ask what the insurance arrangement is on this building. Maybe our Council will bring it up soon.

Hope they also ask for an accounting of the $67 million purchase + move costs and the $76 million bond costs, and the difference.

It'd be interesting to see where all that money went, that is, to whom.

[Wrinkle]

Of course they're subject to market interest, but investors know that a municipal GO will be paid back because the municipality can and is required to levy for the taxes to pay them. 

There was no vote because the bonds used to buy the building were not GO's and, therefore, a vote was not required.  Just like it isn't required when TMUA issues bonds to improve the water system. 

The City is fortunate that BOK stepped up with the Master Lease whether people believe it or not.

The "dinosaur" of Williams that was "unloaded" cost them, from what I know, in the n'hood of $250 million to build and the City bought the building for less than $60 million.  Old City Hall would have required millions and millions of reinvestment and/or repair if the City didn't move so money was going to be spent one way or the other.  And old City Hall can and will eventually be sold.

That's just it. Bonds issued with no vote. Is a government, shadow or otherwise, which has the ability to indebt us to the tune of $76 million (or, potentially, much more) what we want? Is that what we asked for?

As it is, bond packages are an economy to themselves. There's huge money involved in just the issuing. Since they're never bid here, it's a closed market. Could it be Tulsan's may want the opportunity to invest in their own city, too? They may want to purchase some of these bonds, since they're such a stable, reliable investment.

But, they're captive in a closed market, favorable to those in charge and offered only to select few.

Besides all that, they're marked up to make them attractive, then privately marketed. Once purchase, I feel certain they're often resold on open markets at a discount (and for which the open market still considers them market rate at that point).

Cities bond structure is consider safe and reliable, and, thus, are often sold at well below normal bond rates in the open market for just that reason. Here, they're sold at a premium.

IOW, someone's making money on the backs of taxpayers here. It doesn't matter what the project is, it's the bond financing which is the attraction.

[Wrinkle]

btw, I did use "dinasour" inappropriately.
One Tech, as a building/architecture, is not considered a 'dinasour'.
Was trying to adjective something large and heavy, like a boat anchor.

[shadows]

In my experience with glass when it is new it is flexible and easy to cut.  As it gets older quite often it becomes harder to cut and cannot stand the pressure, becoming fragmented very easy.

The bonds seem to be subscribed for before they are mentioned to the public.  They, not being subject to income taxes caused a group of us to assemble several thousands in money.  I call the finance commissioner under the old un-amended charter and ask him when the bonds would be available as we had a group that was interested in bidding on some of them.  He said he would check and call me back.  This he did and told me that the bonds were already subscribed for and considered sold before the project was finalized.  Today when 10K CD are paying less than one percent, revenue bond paying six percent and not taxable would be a premium in anyone's retirement portfolio, don't you think?

[TulsaSooner]

Unless they are a negotiated sale, I'm pretty sure you are welcome to bid on the bonds assuming you make the good faith deposit and are able to buy the entire issue; the bonds must be purachased in their entirety by the bidder. 

All GO's are sold at par or better and are competetively bid. 

[shadows]

Unless they are a negotiated sale, I'm pretty sure you are welcome to bid on the bonds assuming you make the good faith deposit and are able to buy the entire issue; the bonds must be purachased in their entirety by the bidder. 

All GO's are sold at par or better and are competetively bid. 

I am sorry I thought we were talking about R bonds being issued where G.O. bonds should have been required.  If a sewer line fails and the raw sewerage is running down the street then emergency bonds can be issued being the sewer is public utility.  The purchase of the new city hall does have a smell to it but I cannot see where it was a public utility.

The proper procedure in disposing public property, when there is such surplus as we are told exist, has been done by taking bids for the sale of the  property.  This procedure has been followed in housing by HUD.
One could very easily get the feeling that the disposal of this high valued city public property is limited to a closed group being very selective of how it is disposed.  In this time of money crunch where the sales taxes that have become one of the major providers to the general fund, is being diverted to the suburbs, the rainy day fund needs a shot of disposal income.

Like so many things in the city the purchase of the bonds have been limited by having to take the entire amount.  The city has never heard of Brokers. The working poor deposit their monies in the banks and receive one percent interest so the bank can loan the money to the city at a much higher interest rate to limit individual investments in their city's bond issues.  No wonder the Tulsa schools are in trouble with teaching math or is it that this is what the working poor deserves for failing to exercise their voting power? 

[Wrinkle]

Wasn't One Tech built after the WilTel IPO? Additionally, after the whole entity was bought out of bankruptcy by Leucadia, I fail to see what Williams or BOK has to do with any of it other than being the usual fodder for your conspiracy theories.

Yeah, maybe, but Williams apparently owned the building throughout.
During the reorg, Williams stated on its' own website on 2002-07-26 that it would sell the building for $45 million cash and a $100 million note to WCG as part of the reorg. However, to my knowledge, that never occurred, at least until later, perhaps as late as the day prior to the City making contract on it, and quite possibly under different terms.

Read it yourself:
http://www.williams.com/newsmedia/2002/20020726_294.htm

That particular transaction was not ever mentioned again in any press releases after that, but a BIG deal was made of the $180 million Leucadia paid Williams to settle outstanding Williams claims against WilTel (WCG) in October of 2002 with the Federal approval of the reorg plan, and which does not appear to have included the building. In that transaction, Leucadia obtained only 44% of the Common Stock in WCG, with certain restrictions on its' ability to sell those shares, leaving 54% to bond holders and, depending on the source, 2% for remaining shareholders (i.e., next to nothing, if not nothing outright). Again, nothing mentioned as to the disposition of that building at that time, which appeared to remain in Williams domain.

Since WilTel's primary operations center became St. Louis, they had little need of a Tulsa facility to operate. Williams left holding the bag, at least, it appears, until taxpayers were committed to its' purchase. Problem solved.

Read it yourself:
http://www.nytimes.com/2002/10/02/business/company-news-williams-communications-will-end-bankruptcy-soon.html

I'm just presuming the building remained an asset of Williams right up to the time the City decided it needed it. And, there remained a good chance BOK held some of the related debt there until then as well. If the City purchased the building from Leucadia, it was a turn-around, likely with some profit motivation on their part for participation. I suspect if that occurred,  it were within days of each other.

And, just for additional curiosity, who do you suppose is included in the makeup of the 54% Bond holders? Another question could be why it's considered a 'Leucadia' company when they own only 44% of it, all in common stock. Then, there's the question about Preferred  and/or Convertable Stock as well.

Theory, perhaps, but well founded.
So, in comparison, what are your assumptions?