Plans for shuttered TPS Wilson Middle School

[cannon_fodder]

The news reported that the University of Tulsa and TPS were in negotiations on the building, and when it was officially put up for bid TU was the highest (and only) bidder.  However, TPS had more invested in the building than anyone was willing to pay so they have decided to keep paying to maintain the building and grounds and allow it to decline more.  As they have decided to do with all other TPS buildings to date.

http://www.fox23.com/news/local/story/University-of-Tulsa-withdraws-bid-to-buy-Wilson/aLNpjON2nUGUzyu1ZPYiTA.cspx

http://www.tulsaworld.com/news/article.aspx?subjectid=332&articleid=20111103_19_A13_CUTLIN342790

The grape vine told me that the University of Tulsa had many millions lined up to refurbish the building and make it into the Medical School (as previously announced in conjuncture with OU). 

So we know there are no other bidders and TPS has indicated that they have not heard interest from anyone else.  And it is hard to think of a better use for the community.

PLEASE, PLEASE TPS don't do what the City did with Old City Hall.  Stall any noteworthy project for years while holding and maintaining the property for so long we actually lost money.  Unless there is something I don't know, sell sell sell!

If you want more money and TU won't pay more, come up with a creative solution.  TU professors as visiting teachers for some lessons.  TPS teachers able to survey courses for continuing education.  Come up with something!

[RecycleMichael]

TU wants has moved on...

It appears now they have interest in the Hartford Bldg downtown.

http://www.cityoftulsa.org/our-city/meeting-agendas/display.aspx?ID=0000B942

[cannon_fodder]

Perhaps.  It could be the TDA trying to present an alternative or TU trying to persuade TPS to act.  I heard just a couple weeks ago they were still hoping to land Wilson.  Im not sure if Id prefer to see it go in at Wilson or downtown, I think Wilson because I can't really imagine another good use for that structure (as well as the location next to campus).

I'd hate to think TPS is as dumb as the city - such that when there is only ONE interested and obvious party they so alienate them that said party just walks away.  If that is the case I expect most of the schools to sit empty and cost TPS millions in maintenance over the years.

[rdj]

Its not they "want" more money.  Its that they won't make a cent on it if they sell it for that price.  The repayment of bond proceeds make disposing of school sites very sticky.

[cannon_fodder]

Its not they "want" more money.  Its that they won't make a cent on it if they sell it for that price.  The repayment of bond proceeds make disposing of school sites very sticky.

No, they want "MORE" money.  The offer is $1,000,000 or zero.  They want more than $1,000,000 so they are accepting zero and will continue to pay to maintain and heat/cool the building as it continues to decline.  I confidently predict that by the time they dispose of the facilty they will have even more money into it such that whatever amount they get in excess of the current $1mil offer will be offeset by the expense of continued costs.

I understand they OWE more on the building than that, but that notions is compeltly irrelevant.  The money they put into the building is a sunk cost.  It is gone.  Considering as part of the equation is a mistake only government would make.  IIRC they want $4mil to cover the outstanding bonds - well, the offers so far are ZERO and $1mil.  I don't see a $4mil offer on the horizon.

[Red Arrow]

Considering as part of the equation is a mistake only government would make could get away with. 

[AquaMan]

Don't be so hard on them CF. Consider this as one of your investments and the board is trying not to lose 3 million of your dollars. In this case the taxpayers dollars. So they have one offer in 6 months and its a lowball, take it or leave it offer. What that means is the property is slow moving, just like thousands of other properties for sale right now. It will take some marketing and some dedicated effort to sell the property. Saying no to your first offer when its that low isn't incompetence, its prudent.

Someone no doubt will figure just what the breakeven point is for debt service, maintenance, marketing costs etc and come up with a package to maximize the return on what is a very well built, very well placed commercial property. I think its a great property for TU, but they may believe it requires more updating and remodeling for their purposes and can't justify the price but that doesn't mean the price is too high.

[rdj]

Where do you propose they come up with the cash to cover the shortfall?  The "lender" is the taxpayer that paid the bonds, that's a lender that can't accept a short fall.  See BOKF v City Tulsa in regards to Great Plains Airlines, et al for a similar outcome.

It can't come from new bond funds.  I don't think the operating budget has that cash.

[AquaMan]

Where do you propose they come up with the cash to cover the shortfall?  The "lender" is the taxpayer that paid the bonds, that's a lender that can't accept a short fall.  See BOKF v City Tulsa in regards to Great Plains Airlines, et al for a similar outcome.

It can't come from new bond funds.  I don't think the operating budget as that cash.

Who are you addressing? Cause I pretty much agree with you. If TPS were to accept the low ball offer, the taxpayer will have to make up the difference.

[rdj]

Who are you addressing? Cause I pretty much agree with you. If TPS were to accept the low ball offer, the taxpayer will have to make up the difference.

Sorry, it was "cannon fodder".

[Teatownclown]

The city should trade Christ the King on 15th for Wilson and then we'd have us some parking and more land available along Cherie Street for redevelopment....just trying to be creative. 

[DTowner]

Don't be so hard on them CF. Consider this as one of your investments and the board is trying not to lose 3 million of your dollars. In this case the taxpayers dollars.

The $3 million was lost when TPS made a large capital investment in a school building it subsequently mothballed.  TPS will continue to bleed money every month it has to pay upkeep. 

[Breadburner]

TU needs to pony up and quit being bottom feeding low-ballers.....

[cannon_fodder]

TU needs to pony up and quit being bottom feeding low-ballers.....

Bottom feeding low-ballers?  I'm pretty sure they are infinitely higher than the next bidder.  They are the most generous bidder out there.  Well, they were anyway.  Why should TU, a prudent institution, "pony up" and bail out an institution that dumped money into an unneeded building?  Better yet - why doesn't TPS stop trying to blackmail TU and sell the property at the auction price to the highest bidder (to be used for education nonetheless)?

What we are failing to grasp here is that when there is NO ONE ELSE TO SELL THE BUILDING TO the only bidder is the best bidder.  I don't care if TPS had $1,000,000,000 in the building - it is far better off the books for $1mil if there is no realistic possibility on the horizon of getting it off the books for more.  I will say it again:  no matter how much money they have in the school it is a sunk cost.  It doesn't mean that is what the asset is worth.  An asset is worth no more than someone is wiling to pay for that asset.

I can put $10k into fixing up my wife's 2001 Taurus, it won't be worth $10k to anyone else. Worse yet, TPS has multiple properties that are the equivalent of a $10k Ford Taurus.

As to the question of how will they pay off the bond:  the same way they were planning on paying off those bonds all along. The citizens of Tulsa will be on the hook for the $4mil or the $3mil - whichever it may be.  What TPS has is the chance to now get a lump sum towards those bonds plus paying off the remainder less the ongoing cost of maintenance. 

If the theory is TPS cannot sell any assets for a loss - I suspect TU will not be selling many structures at all.  Sorry, an old school building in need of serious renovation is not worth much to many people.  Whoever the real estate agent is that told TPS they should expect bidding wars and full value for those properties should be suspect.  Again, they are only worth what people are willing to pay (I apperently cant say that enough).

[Red Arrow]

TU needs to pony up and quit being bottom feeding low-ballers.....

It could be that's all the property is worth to TU.  If that's not enough money for TPS, regardless of the reason, then TPS needs to find another buyer. If no buyers step forward with a higher offer, then the offer from TU is what it is worth (at least for now) regardless of what TPS has invested.

Ever have more money invested in an object than what you could sell it for?  

Edit:
Darn, beat by 60 seconds this time.  I need to learn to type faster.