Towerview Apartments

[MichaelC]

quote:Originally posted by waterboy

Valuation of real estate falls roughly into two methods, income producing ability or market for resale. Since the property was not likely to be rehabilitated and sold as rental, its income producing value dropped to $0. Maybe even negative if you figure fines, taxes, removal. Its market resale value then becomes what its value is. No one else wants to rehab the building either so the Land is its value.

The owners have said all along, they have no intention of selling this property.  They're intention was to rehab.  This, I believe was an outright lie, but that's kind of beside the point.  They've been using that to up the value of the property.

You're right, right now it has pretty much everything to do with the land.  That wasn't the case before the fire.  Before the fire, the owners were saying "we are going to rehab this."  Meaning:  The value of the BUILDING was also in question.

quote:I'll repeat something that didn't sink in earlier.

Pleasant.

[tulsa1603]

quote:Originally posted by akupetsky

^I am sure that someone will correct me if I am wrong, but I don't believe that's true.  There is a procedure for determining that a building is "dilapidated," and requires demolition, and another procedure for determining that property is blighted and subject to urban renewal.  The city can tear down a building on your property if it is unsafe, and you would continue to own the underlying land (plus you would be responsible for paying for demolition costs).  After thinking about it, I am guessing that the city won't proceed under the "dalipidated building" proceedings, since they have already begun the eminent domain proceedings.  Still it would be an interesting question whether the city can determine that a empty lot is blighted.  My impression is that most parking lots downtown are owned by either TCC or the churches.  Wouldn't it be great if the city determined the parking lot next to the Tulsaworld was blighted?

I don't think parking lots are considered blight.  But nice thinking!  

http://en.wikipedia.org/wiki/Blight_%28urban%29

[tulsa1603]

quote:Originally posted by MichaelC

In order to demo the building, the city will likely have to take the property.  So it will already be owned by Tulsa via the TDA or some entity.

The problem essentially is, will the owner take care of it?  Same problem as before, but NOW it's a question of is this building a hazard to the general public?  The owners can't be allowed to leave a burnt out shell of a building downtown.

Even though it's now basically useless as a building, it's still owned by the folks from Oregon.  To me it seems like the owners options boil down to: 1) Repair the building, 2) Demo the building, or 3) sell the property.  They probably will have a very limited timeframe to make a decision because of the current state of the building, and up to this point I see no reason to believe that they'll take option 1 or 2.  If they won't do any of those, the city has no choice but to take this property.

On surface lots, many of the surface lots are already owned by the TDA or other city entities.  So turning them into something else is no big deal.  Not sure how much is privately owned.  When you see "Central Parking" or "American Parking" or whatever, those companies are contracted to run parking lots and garages.  I don't think they own the lots.

The city can tear down a dilapidated property without owning it.  Then they can place a lien on your property for the cost of the demolition.  I lived in that neighborhood south of 21st between Harvard and the BA a few years ago, and we (the HOA) worked hard to get three houses condemned by the city, and we all became pretty well educated in the process.

[tim huntzinger]

Can we not declare a 'do not resuscitate' order for the building?  Why was it saved when it is condemned anyway?

The walls are unstable, losing bricks, and the rattrap should be torn down or allowed to burn.

[waterboy]

quote:Originally posted by MichaelC
The owners have said all along, they have no intention of selling this property.  They're intention was to rehab.  This, I believe was an outright lie, but that's kind of beside the point.  They've been using that to up the value of the property.

You're right, right now it has pretty much everything to do with the land.  That wasn't the case before the fire.  Before the fire, the owners were saying "we are going to rehab this."  Meaning:  The value of the BUILDING was also in question.

quote:I'll repeat something that didn't sink in earlier.

Pleasant.

Don't take it personal! It doesn't matter what they said they were going to do with it. We had a phrase when I sold real estate, "Buyers are liars". It goes both ways, though.

Don't confuse price with value. Value is appraised, price is offered. For instance there are several buildings in the downtown area that are priced ridiculously high, if for sale at all, because of the speculating on the arena's impact as well as other downtown activity. They don't add up on an income producing basis (they won't make enough to cover the loan payment) and don't match any comparables in the market. Nonetheless they hang a sign out and wait for someone to see the potential. Its better than just flattening them.

If the Towerview owners said they wanted to price it based on its re-habbed value in order to increase the price they were asking, it was because the income producing value of re-habbing it, including rents, grants, write-offs, cash flow, etc. was better than its value for market resale based on comps. Its a simple benefits comparison. I do believe they were bluffing, as there doesn't seem to be extreme demand for housing of that type downtown. Nothing too unique about the building I guess. But they may have seen something I didn't.

I agree Rico, they probably had in mind a certain return on this property and that was where the price came from. Whether it happened quickly or over time wasn't of consequense. The burn down doesn't matter. I bet they'll take the present value of that predicted return on investment if the authorities will deal in good faith.

[MichaelC]

quote:Originally posted by tulsa1603

The city can tear down a dilapidated property without owning it.  Then they can place a lien on your property for the cost of the demolition.  I lived in that neighborhood south of 21st between Harvard and the BA a few years ago, and we (the HOA) worked hard to get three houses condemned by the city, and we all became pretty well educated in the process.

I understand that.  This is a major problem for this owner.  Like you said, the owner will have to be willing to take on that cost, even if the city simply bills the owner for demo costs.

We had a similar argument over a year ago about should the city take this property vs. the potential value of Towerview as loft apartments.  I've said the entire time, that IMO this owner has no intention whatsover of rehabing this building.  It turned out to be assumably true, yes the owner still had time to get rehab rolling, but it's been nearly a year since the owners said they were active and ready to do so.  The same owners that when confronted by the Health Department, simply kicked out the residents instead of paying to repair the building.

I don't believe the owners want to sink a dime into this property.  We'll find out.  There are a ton of factors for the owners to take into consideration at this point.

[MichaelC]

quote:Originally posted by waterboy

Don't confuse price with value. Value is appraised, price is offered. For instance there are several buildings in the downtown area that are priced ridiculously high, if for sale at all, because of the speculating on the arena's impact as well as other downtown activity. They don't add up on an income producing basis (they won't make enough to cover the loan payment) and don't match any comparables in the market. Nonetheless they hang a sign out and wait for someone to see the potential. Its better than just flattening them.

I got ya.  If we're planning on arguing semantics, lets just declare you the winner.  I'm not a pro, and I've graduated from believing I need to be one.

I doubt that the owner's of this property are particularly happy about the fire.

[waterboy]

quote:Originally posted by MichaelC

quote:Originally posted by waterboy

Don't confuse price with value. Value is appraised, price is offered. For instance there are several buildings in the downtown area that are priced ridiculously high, if for sale at all, because of the speculating on the arena's impact as well as other downtown activity. They don't add up on an income producing basis (they won't make enough to cover the loan payment) and don't match any comparables in the market. Nonetheless they hang a sign out and wait for someone to see the potential. Its better than just flattening them.

I got ya.  If we're planning on arguing semantics, lets just declare you the winner.  I'm not a pro, and I've graduated from believing I need to be one.

I doubt that the owner's of this property are particularly happy about the fire.

Hey, you're letting your ego get in the way of reasoning. It's not semantics, its the jargon of the business. No one expects the average person to understand the details of a field they're not familiar with. I was just trying to add some of my insight from having worked in that field as the remarks being made just didn't add up. Bottom line? It doesn't much matter what people say on this thread. But one hopes it is based on more than guesses.

BTW the cost of destroying that building is not exhorbitant or time consuming. If it suits the owner to drop it he will. If the city insists it come down and their cost is less than what the owner is quoted then the city will do it. And I've seen worse buildings taken down to their skeleton and rebuilt so you assumption that they never considered re-habbing is just that. Economics rules.

[MichaelC]

It is an assumption.  It's not a far leap though.  Certainly not farther than leap it would take to jump my ego.

Yes it can be rehabilitated.  Yes it can be demolished.  Those things can happen.  

However, if it is to be rehabbed.  If the owner STILL continues that this is the case.  They better be quick about it, because NOW the building can be called unsafe to the general public.  It's a whole new problem, with new potential solutions.

If the building is to be demolished either by the company or the city.  Same deal.  They're going to end up with a defined amount of time to make this decision.  Time is now a factor.  Money is now a factor.  They can no longer afford to simply wait out the city until they get the biggest offer.

On the other hand, if they fully intend to sell it to the city, now might be the time.  I'm not sure of the extent the city and the owners are dealing with each other.  But the owners might want to get this done quick, before the city gets a chance to fully re-evaluate the situation.

[RecycleMichael]

I was in a meeting this morning that included the city's development people and DTU folk.

They jokingly swore they all can account for their whereabouts during the fire. The one thing I have learned in life is that it is good to have an alibi.

Fires in abandoned buildings are pretty common. According to the U.S. Fire Association, "The statistics on abandoned buildings are compelling. According to the USFA, over 12,000 fires in vacant structures are reported each year in the US resulting in $73 million in property damage annually. The National Fire Protection Association (NFPA) estimates that 6,000 firefighters alone are injured every year in vacant or abandoned building fires".

I think we should tear down the building right now. Having a burned-out shell of a building looks terrible next to our biggest and newest public investment.

[Wrinkle]

Sure, it's going to be torn down, now that 'fate' has lend its' hand.

Who does it at what cost is not relevant.

As WaterBoy states, the value is in the land. Always has been. Though, a renovation of the existing structure was ostensibly a possibility for economic reasons.

Those reasons are now gone.

But, the value is in the land.

The land is actually more attractive (and, thus more valuable) to developers without the building since demo costs can now be deducted).

The owner could now suggest he has plans to develop a hotel on his parcel, or a highrise condo project or simply hold onto it for future appreciation.

IMO, the City of Tulsa has no reason to bother this guy further, at least once the hulkskin is handled.

In court, there's no one who can suggest a hotel development _requires_ this parcel since there's more than enough available for a huge project without it. It would have to be argued a particular plan requires it, and that is subjective.

City leaders have a hard time with Free Markets, don't they? And, with so much of our money to play with, they cannot seem to contain themselves.

[MichaelC]

If I were the City, I'd start low-balling these guys for sure.

[Wrinkle]

If I were the owner, I'd take bids immediately on demolition/removal. Finish with a nice, clean lot.

Then, I'd start plans to build a huge condo/hotel project. And, make offers to purchase surrounding parcels to enlarge the project.

It only makes economic sense.

[MichaelC]

A lot of things make economic sense.  Like holding this building in it's pre-fire condition, refusing to make repairs so that the building can continue to generate revenue, then mentioning plans about plans that don't really exist, and upping the ante on the City.

Hope the building didn't have any asbestos.

[sgrizzle]

How much does it cost to get a vagrant to start an  "accidental fire?"

... just wondering.