City Hall Consolidation (purchase of One Technolog

[Wrinkle]

I'll be surprised if this thing makes it out of UED Committee tomorrow.

http://www.cityoftulsa.org/Agendas/agendax.asp?FN=00138F5C&num=1

The sooner it's killed the better.

[Double A]

quote:Originally posted by Wrinkle

I'll be surprised if this thing makes it out of UED Committee tomorrow.

http://www.cityoftulsa.org/Agendas/agendax.asp?FN=00138F5C&num=1

The sooner it's killed the better.

Yep, if it does make it out of committee I will be there to fight it at the regular meeting.

[Oil Capital]

quote:Originally posted by Floyd

quote:Originally posted by Oil Capital

quote:Originally posted by Double A

Back on topic, this city hall move will be a clusterf#*ck of epic proportions that Tulsa will not recover from for many, many years.

Could not agree more.

I disagree.  It will be good for city pride and morale.  If all goes well, this move will look both pragmatic and visionary.  Even in the worst case, the city still gets an upgrade and gets rid of a dilapidated embarassment.

That's not the worst case at all.  The worst case (which also, sadly, is reality if this happens) is the city gets a huge ($76 million) debt, higher operating costs, and a less accessible city hall.  PLUS, it will put on full display for any visitors and potential business relocators just how out of whack this city's priorities are.  Talk about an embarassment.  

Offer the choice between a well-maintained, clean, well-functioning city with a "dilapidated" city hall versus a crumbling, dirty city with a fancy, over-sized, palace of a city hall; I (and most businesses) will choose the former every single time.

[Double A]

Leave it to a woman who lives in a 28 million dollar mansion to stomp and scream for a status office to go to work in. Maybe we should convert the cities fleet vehicles to Hummers? Maybe get Versace to design couture uniforms for the city employees too? Boy, that would sure improve morale and pride in Tulsa.

[cannon_fodder]

Ok, I have sat back and taken this all in.  Here is my take:

Pros:
- City services under one roof
- Current facility is reportedly sub par
- projected long term financial savings
- New shiny building for the city of Tulsa (maybe attract better workers?  Better presentation to potential conferences or businesses?).
- Eat up some vacant office space, MAY encourage downtown development

Cons:
- Initial Cost is very high.  City debt load with 2025 already stretched
- No plans for the many abandoned buildings the city will leave - INCLUDING the current eyesore
- Parking Situation
- Would divide the city services from police, the library, the city, county and federal courts, the post office, and the city council chamber.
- Will result in less funding to maintain/fix the current plaza area as well as add another area to maintain
- Restricted Access to the building - not only the parking, but it is not easy to get to the building.  It is at a corner of 2 one way streets and back into the rail road tracks (not hard for anyone that knows downtown, but...).
- Projected savings is based on occupancy and future borrowing cost, land sales, and projected operating expenses.  How well did we estimate the last large purchase (BOk center)?
- May discourage a company from filling that prime office space downtown


I am steadfastly against this move UNLESS a firm plan is in place for the abandoned properties.  Otherwise we just add tot he asset, maintenance cost, and wasted space the government already has as we watch the properties deteriorate.  given enough time, surely the city will find a use for them and the new building will be an addition - not a replacement.

and hey, for a $1mil bonus I can pretty well tell you that anything you present is a great idea.  I'd like to know how often this company comes down on the "no I dont want my bonus" side of the fence.

[edit]random jarbled text at the bottom removed[/edit]

[Double A]

Sure would be nice to have some purchase option contracts on these buildings to be vacated before making the move, wouldn't it? I don't understand why the city doesn't look at the area west of the convention center as a possibility for hotel development. Even if everything worked out perfectly on this deal it will be many years before we would see a hotel development on the civic center site.

[TulsaSooner]

http://www.tulsaworld.com/news/article.aspx?articleID=070711_1_A9_spanc21100

Article about council concerns regarding the OTC deal.

City councilors are concerned that a proposal to buy a downtown high-rise to house a consolidated City Hall doesn't include council oversight.

"Is this just a check for $76 million and that is the last the council sees of it?" Councilor Cason Carter asked Tuesday about a resolution on which the council will vote Thursday.

The resolution seeks permission to incur indebtedness, not to exceed $76 million, to buy One Technology Center and to fund other costs related to the proposed consolidation.

The $76 million includes the cost of the building, which sources close to the deal say is $52.25 million. The rest of the money would cover the bonding costs, the demolition of some vacated city structures, relocation costs, security and consultant commissions.

During a council committee meeting, council attorney Drew Rees said approval of the resolution would be the council's last action on any further decisions related to the move.

Carter said he is "concerned about the risk matching up with the accountability."

The deal depends heavily on revenue from third-party leases of excess space in the building to help repay the revenue
bonds that would fund the move.

Although the Tulsa Public Facilities Authority would be issuing the bonds, the financial risk falls on the city, Finance Director Mike Kier said.

Economic Development Director Don Himelfarb said the risk of leasing the space is minimal and that he is confident that in addition to the current tenants, the city will be able to attract other renters.

Carter said he thinks it's unfair for one entity to bear the risks while another controls the allocations.

Councilor Bill Martinson asked whether the resolution could be amended to require council approval for some future actions related to the move to ensure accountability.

It also was suggested that the council approve only the issuance of a promissory note to cover the purchase of the building while other options are considered.

One option that might be considered is someone buying the building from the city and then leasing space to the city. Himelfarb said that while that would eliminate the risk, it would be more costly and the city would lose control of the building.

If the city owns the building and has three tenants, the total expenses in the 10th year are estimated at $4.5 million, Kier said. With no tenants the figure is $8.9 million, he said.

If the city doesn't move, its expenses in the same time period are estimated at $6.5 million, which includes deferred maintenance costs on its existing facilities, he said.

If the council agrees only to purchase the building, it would need at some time to fund the move into it, Kier said.

Himelfarb stressed that the council should not lose the opportunity to buy the building at the current price, adding that the option could go away at midnight Thursday.

Earlier Tuesday, Himelfarb described the deal to the Economic Development Commission as something "right out of the conservative Republican playbook."

After the council meeting, Himelfarb said the deal would be "transformational," giving the city a "multiyear leap forward" in economic development.

[cannon_fodder]

I though of a few other things:

1. At least the Mayor was thinking outside the box.  Assuming this deal isnt as corrupt as it could be, she is looking for ways to improve things for the long term.

2. The purchase of the building would require the city to enter the commercial real estate market:

a) to sell some properties
b) to rent space in One Tech

this is a pro and a con.  An interest in developing downtown, but at the same time a risk for the city AND competition with other downtown space (older buildings will lose priority to the cities need to make $).

Just some more thoughts.

[TulsaSooner]

I'd think it is fairly common for the City to be in the "real estate market" of buying/selling certain properties.  They own stuff, so that's going to have to happen.

I'm not that big a fan of them having to find tennants for the remainder of OTC, however.  If downtown office space is 37% unoccupied like they stated on the news last night, that could be a risky proposition.  A better idea, to me, would be to consolidate more government properties into OTC so there is no need to lease space thereby reducing the risk and increasing the consolidation/reducing the associated costs.

[Conan71]

What's the first rule of buying real estate?

Don't get emotional about the deal.

Himelfarb sounds like he is about to pee his pants.

[TulsaSooner]

quote:Originally posted by Conan71

What's the first rule of buying real estate?

Don't get emotional about the deal.

Himelfarb sounds like he is about to pee his pants.

I thought it was location, location, location.

[]

[PonderInc]

I'm confused about the "parking nightmare" related to moving City Hall to OTC.  A quick glance at Google Earth confirms that there are ENTIRE CITY BLOCKS of surface parking within a block or two of OTC.  There's also an attached parking garage with air-bridge access.  This garage was originally owned by Williams Communications when the building was built.  Wouldn't the City acquire the parking garage if the building is purchased?

Also, it seems likely that the city could dedicate certain parking areas for "in-and-out" access to city hall.  Unlike office workers, who would park their cars all day, visitors to city hall would be popping in and out.  Thus a dozen people might use ONE parking spot during an average day.  It changes the math on how many spaces are actually required.

[RecycleMichael]

The parking argument is bogus. The current parking is shared with events at the Civic Center and the other government offices. Did you ever try to find a parking spot when a big convention was in town?

The parking will be better at the new place.

The other bogus argument is about having the city in the real estate business. The city is already in the real estate business. They rent out facilities to Subway in the current building, the county lease out expo square to the Drillers and Big Splash, even the RiverParks leases to a restaurant.

Lots of businesses will want to be in the same building as city hall. I am more worried about having contractors, consultants, chambers, etc. be too close.

I also think that they could work out an arrangement with a property company to minimize the risk. That would allow the city to have a middle man take any risk and the city could have a guarantee of income.

I am convinced that this move will re-energize downtown. I am in favor.

[Conan71]

Okay, parking argument is somewhat fallacious, I'll give you credit on that.

However, having half a building (or how much ever) of class A office space to rent is a lot different than leasing to Subway and River's Edge Bistro.  

Too much of the payment structure on this is based on being able to rent out the rest of the space, which is what I call speculative financing.  It's using a best case scenario to push this through.

Outsourced property management comes with a fee.  Those companies have to make a profit and that comes at a cost to the city.  I really don't see how that takes risk away from the city, as they are still the building owner.

Fine, if they came to the table with 10 year leases for 100% occupancy PRIOR to completing the purchase I'd feel more comfortable about this.

The fervor to push this through is leading myself and a lot of my politically-oriented friends to think either some people in the admin are getting too emotional about a vanity purchase for the city or there's something corrupt deep in the background on this.

Just too much speculation and chance on how to pay for it and there are too many underlying details which came to light after Himelfarb's meeting with the councilors to make me believe this is a slam-dunk.

[PonderInc]

I read an article somewhere recently that said that 46% of OTC is currently leased.  Is this number right?  Is this one tenant that would need to be kicked out, or multiple tenants, most of whom would stick around?

I agree with RM that many different entities will want to have "One City Hall" as their business address.  Lends them a certain "je ne sais quoi"....