1st Street Lofts Rant/recap

[sgrizzle]

This is what I've heard

1. the TDA loan isn't the only loan
2. He was pulling six figures per year as a developer fee
3. His rent rate is closer to $12 than $22.

[carltonplace]

There's no reason he can't find more financing either.

Since this was tax payer money and TDA administered the loan is there anyway to file to have the loan information made public? I assume there was some sort of business plan he had to submit. Why were these loans not administered like a private construction loan where they could only draw from the funds when materials and supplies were being bought? If there was, there should be some sort of record of what he paid himself to "manage" the project. Where's the follow through (checks/balances) for this money?

Because: Sager - "the savior of downtown".

[rdj]

There's no reason he can't find more financing either.

He's leasing ~6,500 sq. ft. on the first floor for most likely $22.00 NNN (that area's market rate).

He has a $1.3 million interest free loan - 10 year term (or is it longer?) = $130,000 per year

He is having $143,000 per year of income from those retail spaces.

He probably took a $200,000-300,000 "developer fee" and "project manager fee" too. So essentially ripped off tax payers and pocketed a few hundred thousand dollars. Then nets $13,000 a year from the retail spaces and then a full $143,000 when the loan is paid off. Then get's credit for being the Downtown savior while he's ripping tax payers off!!

What a F-ing joke. 

He could easily go to a bank and get financing to complete the multifamily buildout.

Since this was tax payer money and TDA administered the loan is there anyway to file to have the loan information made public? I assume there was some sort of business plan he had to submit. Why were these loans not administered like a private construction loan where they could only draw from the funds when materials and supplies were being bought? If there was, there should be some sort of record of what he paid himself to "manage" the project. Where's the follow through (checks/balances) for this money?

There is no doubt there is a lot of cash in the marketplace for real estate and in particular multi-family.  That said, financing a project that's been stalled for ten years isn't just walk into a bank and walkout with your cash.  Given the public perception of the project I would guess a lot of local banks would be extra diligent in their underwriting of the project.  Good bankers consider the reputation risk of their projects as well.  Also, the vast majority of deals that are getting done have strong equity in the deal usually via cash injection up front and guarantors that have strong liquidity or cash flow not dependent upon the deal.

[cannon_fodder]

[argh, I started posting an update to the record and messed up the original post...sorry]

[rdj]

Meanwhile, looking at a benefits analysis, a commercial real estate loan obtained as a second mortage might have a 1% origination fee, .25% maintenance, and assuming a 7% rate - run the numbers on $1.3mil in interest free money for 10 years and the subsidy may be worth over $1,000,000.  What is the return on our investment?

Few real estate deals work at these numbers.  Rates on CRE are now down in the high-3's to mid-4's depending on the project, the guarantors and the lender.  National lenders tend to be cheaper but pickier, the local banks will stretch on a deal but demand a higher rate.

[PonderInc]

Now that we have some more of the underlying facts... thoughts?

Um... both Sager and the TDA are incompetent...?

[Vision 2025]

At a recent City Council committee meeting I was asked about the status of any incomplete Vision projects and I mentioned the Down Town Housing loan program's one, as yet uncompleted, project.  This generated into discussion about recourse and future use etc., which were both beyond the agenda and my purview so Councilor Ewing suggested and others agreed that they needed to and would be inviting TDA to a future Council committee meeting in order to discuss issues and the programs future.

Kirby

[Townsend]

At a recent City Council committee meeting I was asked about the status of any incomplete Vision projects and I mentioned the Down Town Housing loan program's one, as yet uncompleted, project.  This generated into discussion about recourse and future use etc., which were both beyond the agenda and my purview so Councilor Ewing suggested and others agreed that they needed to and would be inviting TDA to a future Council committee meeting in order to discuss issues and the programs future.

Kirby

Good to know.  Hoping this starts a course of positive action with the building.

[Cats Cats Cats]

The Sagers' sold 311 E 2nd st S, the one Yokozuna/Dwelling Spaces/Tallgrass is in for 2.7 million in April.  According to the Tulsa County Assessor site.  Loft Money?  Fingers crossed

[Conan71]

The Sagers' sold 311 E 2nd st S, the one Yokozuna/Dwelling Spaces/Tallgrass is in for 2.7 million in April.  According to the Tulsa County Assessor site.  Loft Money?  Fingers crossed

Don't get your hopes too high.

Sager sold Arnie's/Blue Dome/Woody's properties in '12 or '13 for $1.2 mil and it resulted in nothing on the loft project.

[sgrizzle]

The Sagers' sold 311 E 2nd st S, the one Yokozuna/Dwelling Spaces/Tallgrass is in for 2.7 million in April.  According to the Tulsa County Assessor site.  Loft Money?  Fingers crossed

One of those things is not like the other...

[Vision 2025]

KJRH Story http://www.kjrh.com/news/local-news/investigations/after-nine-years-1st-street-lofts-to-see-rapid-completion

[Tulsasaurus Rex]

KJRH Story http://www.kjrh.com/news/local-news/investigations/after-nine-years-1st-street-lofts-to-see-rapid-completion

Ross Group pitching in? huh.

[TulsaGuy]

Yeah it was a poorly written story.  Is Ross Group just donating money to the project?  I did appreciate how they called out Sager for his inability to perform a bit.  I just wish they had provided more details on the progress of the project.

[Townsend]

KJRH Story http://www.kjrh.com/news/local-news/investigations/after-nine-years-1st-street-lofts-to-see-rapid-completion

Pegues says the project should be complete in 15 months.

While I'm pleased to see the story...