Bringing the hammer down

[sgrizzle]

quote:Originally posted by Wrinkle

Has anyone actually made an offer to the owner?
What's his price? And, what is the building actually worth?

Is it really too much, or just more than whomever wants it is willing to pay?

Actually, I'm wondering if the owner is even aware of what is going on. Did officials just mail a letter to the record address and call it "it"? For that matter, do we actually know they did that much?

I heard he wants about 10x what he paid.

[booWorld]

Yesterday I talked to a couple of architects about the possibility of saving the building.  Both have experience with the restoration of historic buildings, here in Tulsa and in New England.  

The first architect said that there isn't significant water damage yet.  I'm not sure how he knows this.

The second architect also has information on the building in its current condition -- encouraging information about its structural stability.

Yes, I've also heard that the owner wants much, much more than what he paid for it.  I remember that World Publishing didn't pay very much for the Skelly Building -- less than $200,000 as I recall.  In the case of the Skelly Building and the Froug Building, the assessed value of the real estate was lowered after demolition.  That results in less tax revenue for the county.  

We can guess about the Tulsa Building's condition's effect on the value of surrounding properties, so a comparison to the Skelly and Froug sites might not be a fair one.  The Skelly Building and Froug Building appeared to be in relatively good condition shortly before they were demolished -- better than the Tulsa Club Building appears to be now.  I've tracked the assessed values of World Publishing's block and surrounding properties, both before and after the Skelly/Froug demolitions.  There was a net loss in assessed value.  If all property owners in the county trashed their buildings as World Publishing chose to do, the overall decrease in property tax revenue would be absolutely devastating.

There are many variables and unknowns in the big picture besides abandoned buildings.  Downtown cores are defined by streets and buildings.  Corner buildings are especially important.  One thing I know for sure:  Tulsa is not known internationally for its special and unique parking lots, vacant land, and Tulsa Development Authority opportunity sites.  Tulsa is recognized around the world for its Art Deco buldings, several of which were designed by Bruce Goff.  Tulsa has many problems to face.  Are 60 neglected buildings really holding us back?

[Renaissance]

quote:Originally posted by booWorld

quote:Originally posted by Floyd

quote:Originally posted by booWorld

quote:Originally posted by Floyd

Can you explain how the revolving loan fund would work?  I'm not familiar with the concept.

As far as the urgency of the issue, my guess is that the city has learned from experience.  The farther you allow these absentee landlords to let their buildings languish in illegal conditions, the more difficult it is for restoration to occur.  Ultimately, without code enforcement, the most profitable way to "restore" the property is to demolish and start over.  That's obviously undesirable, hence the "urgency."

The Mayo Hotel was abandoned for a long time.  The Ambassador Hotel was empty for years also.

Completely agree.  Those are good examples of how aggressive code enforcement might have prevented deepening disrepair of Tulsa's architectural icons, thus saving the city money in subsidizing renovations and preventing tragic degradation of historic buildings.

My emphasis.  We don't know.  Aggressive code enforcement also might have increased the pressure for demolition in those cases, as it took years to find developers willing to take on those hotels.  Dozens if not hundreds of buildings have been razed downtown.  I don't see how another vacant lot is going to help the city.  


Monday, Monday, can't trust that day
  ~John Phillips

You appear to be suggesting that these aggressive fines are increasing the risk of demolition of valued architecture.  What is your recommendation instead?  Non-enforcement of building codes?  Because we see what happens when landowners allow their properties to decay--ultimately, the value declines to the point that renovation is almost impossible, and demolition starts to make financial sense.

On another topic, you never explained the revolving loan fund.  I'm curious about what it is and how it works in this situation.  

Finally--a new thought.  I think Tulsa needs some sort of demolition ban downtown.  Maybe we could have some kind of approval board for any proposed demolition inside the IDL.  This would probably be an easier mechanism than eminent domain to make sure Tulsa doesn't lose its architectural heritage.  It would also keep the city out of the real estate business.

[booWorld]

quote:Originally posted by Floyd

quote:Originally posted by booWorld

quote:Originally posted by Floyd

quote:Originally posted by booWorld

quote:Originally posted by Floyd

Can you explain how the revolving loan fund would work?  I'm not familiar with the concept.

As far as the urgency of the issue, my guess is that the city has learned from experience.  The farther you allow these absentee landlords to let their buildings languish in illegal conditions, the more difficult it is for restoration to occur.  Ultimately, without code enforcement, the most profitable way to "restore" the property is to demolish and start over.  That's obviously undesirable, hence the "urgency."

The Mayo Hotel was abandoned for a long time.  The Ambassador Hotel was empty for years also.

Completely agree.  Those are good examples of how aggressive code enforcement might have prevented deepening disrepair of Tulsa's architectural icons, thus saving the city money in subsidizing renovations and preventing tragic degradation of historic buildings.

My emphasis.  We don't know.  Aggressive code enforcement also might have increased the pressure for demolition in those cases, as it took years to find developers willing to take on those hotels.  Dozens if not hundreds of buildings have been razed downtown.  I don't see how another vacant lot is going to help the city.  


Monday, Monday, can't trust that day
  ~John Phillips

You appear to be suggesting that these aggressive fines are increasing the risk of demolition of valued architecture.  What is your recommendation instead?  Non-enforcement of building codes?  Because we see what happens when landowners allow their properties to decay--ultimately, the value declines to the point that renovation is almost impossible, and demolition starts to make financial sense.

I don't know the effect of the aggressive fines.  We both used the word "might" in our posts, which I emphasized.

From Monday's Tulsa World article on the subject:

quote:Ridding the downtown area of vacant buildings will improve the quality of life for people who live and run businesses in the area...

Perhaps this is true, but how many people actually live in the vicinity of the Tulsa Club Building?  Are those few residents really concerned that the building's condition is lowering their quality of life?  What attracted them to move to the area in the first place?  Could it have been the unique collection of buildings and streetscapes which can't be found anywhere else in Tulsa?  How many buildings were vacant when they chose to move downtown?

I'm not trying to evade your question about the revolving loan fund, but it's something that Michael Bates could answer better than I.  Such a fund would be a carrot to offer up in addition to (or perhaps in lieu of) the stick (of aggressive code enforcement).  I doubted rwarn's post, so I was mainly asking for clarity about the context in which Michael Bates may or may not support eminent domain.      

[TheArtist]

If the guy who owns the Tulsa Club building bought it for say 250,000 and now wants 2 mill for it. I hope the city is collecting property taxes as per the 2 mill that the owner says its worth. The city should do that with a lot of properties like that and perhaps those abandoned buildings or lots that someone bought for a song and now sits there because the person wants a lot more for it, well if it really is worth a lot more they should pay property taxes on it. If they dont like paying the higher property taxes they can lower the price, sell it, or do something positive with the property so that the property is making enough money to pay the taxes.

[booWorld]

^ I've heard different figures, but that's not how property taxes are assessed anyway.  

This is an interesting thread.  I haven't been inside the Tulsa Club Building since the early or mid-90s, but I've received a bunch of information about it within the last 30 hours or so.  I need to digest all the numbers and sleep on it.


Source:  Beryl Ford Collection / Rotary Club of Tulsa, Tulsa City-County Library, Tulsa Historical Society

[Chicken Little]

quote:Originally posted by Floyd

On another topic, you never explained the revolving loan fund.  I'm curious about what it is and how it works in this situation.

If Booworld won't answer, Floyd, I will.  A revolving loan fund is a loan pool dedicated  to a special purpose, in this case it would be to breathe new life into downtown buildings.  As loans are repaid back into the fund, the fund grows and new loans are made.  Thus, the pool is constantly revolving and growing.

Because the fund's mission is something other than profit, you could do things that banks typically won't.  For instance, funds could be offered at a lower interest rate, and "riskier" loans could be made.  But if you really want to make the most of such a fund, you'd probably want to offer smaller amounts at market rates and to be used as seed money to leverage much bigger bank loans.  

Remember back in the day when you had to have 20% equity to get a loan?  Well, as long as the bank gets paid back first, the bank would see your 2nd position revolving loan as "equity" on your project.  And so the fund managers could use the revolving loan to leverage lots of bank loans.  This would allow them to achieve their mission more quickly...and in smaller bites.  By spreading that money out over lots of different projects, they'd be managing their risk pretty effectively.      

It's a good idea, but it's not magic.  I don't think access to loans is the problem downtown.  Kanbar certainly doesn't need a revolving loan.    And I would think that with the growing number of successes downtown (McNellie's, Philtower, and many, many more), that banks would be eager to make loans down here.

As I said, the problem isn't access to capital, it's access to vision.  The Tulsa Club guy has zero ideas.  He's intellectually bankrupt.  That's harsh, I know, but the guy apparently doesn't even have the smarts to keep the graffiti off of that gem of a building.  What does a stranger to Tulsa think when he or she sees this kind of craziness?  It hurts his investment in ways that far outweigh the cost of a can of paint thinner.  And, it diminishes downtown.

I can pretty safely say that he's not willing to borrow a penny at any interest rate, and he'll sit on that building and do nothing until it rots to the ground if he's allowed.  His "business model" is to camp out and wait for an angel to come along with a solution that makes him rich.  Ironically, he's the problem.  He's scaring the angels away.

So, if somebody offers up revolving loan funds as the solution for downtown, they either don't know what they are talking about, or they are trying to trick you.  It's a jitney.

As for the demolition ban, I don't know if I'm willing to go that far.  Personally, I'd like to see how the city does with this nagging and hectoring thing.    I'm confident that he'll either do something or sell.

[booWorld]

^ Also, the possibility of using the fund to purchase endangered properties outright, secure them, and then sell them to developers with appropriate re-use plans was discussed on KFAQ Tuesday morning.


Source:  Beryl Ford Collection / Rotary Club of Tulsa, Tulsa City-County Library, Tulsa Historical Society

[si_uk_lon_ok]

This sounds all really good about the revolving loan fund. However I'd really like to see it used in a way that doesn't reward reckless building owners. If they guy who owns the Tulsa Club building can name his price because his bizarre business model which involves buying a nice building close to other buildings, neglecting it until it becomes dangerous then forcing people to buy it off him. Won't he just buy more Tulsa buildings and pull the same stunt?

We need to reward people who look after their buildings and those who renovate, but punish those who neglect there buildings. He should be fined $1000 a day, but this should be combined with a moratorium of building demolition within a set area. To only use fines encourages people to 'get rid of the problem' be it by sale or demolition, the city should force peoples hand to sell the building if they have no interest in maintaining it and it is a danger. I don't understand the attitude of 'oh woe is me, haven't we lost so many buildings?', but on the other hand aren't prepared to use legislation to prevent it happening in the future.

[Chicken Little]

quote:Originally posted by booWorld

^ Also, the possibility of using the fund to purchase endangered properties outright, secure them, and then sell them to developers with appropriate re-use plans was discussed on KFAQ Tuesday morning.

Si, nailed it.  Letting negligent building owners have anything to do with setting the price is nuts.  You'd be rewarding them for being awful.  Besides, how are you going to do business with a guy that claims his rotting building is worth 10 times what it is?

Fine him.  Push him to do something.  Ultimately, if the guy refuses to act, why shouldn't the city take the building from him, pay him it's appraised value, and then resell it to the highest bidder with a restoration plan?  What, exactly, is so evil about that?  And how is it worse than giving greedy do-nothings get everything they want.

[booWorld]

The fines might be the best option in this case.  I'm questioning the process.  I don't have a solution, especially when a building owner has unknown or illogical motivations.  Also, I don't recall identifying any particular mechanism as evil.

I've seen selective code enforcement in Tulsa, and I think it's unfair.  I wondering if that might be what's going on here.

[Chicken Little]

Booworld, you are right and proper in questioning the actions of our government.  My only recommendation is that you be similarly skeptical when a talking head from KFAQ offers a "solution".

[TheArtist]

quote:Originally posted by booWorld

^ I've heard different figures, but that's not how property taxes are assessed anyway.  

This is an interesting thread.  I haven't been inside the Tulsa Club Building since the early or mid-90s, but I've received a bunch of information about it within the last 30 hours or so.  I need to digest all the numbers and sleep on it.


Source:  Beryl Ford Collection / Rotary Club of Tulsa, Tulsa City-County Library, Tulsa Historical Society

Wow, I wonder if those columns and beams are still in there? That architecture is a hidden Tulsa treasure if it is. I have often thought it would be neat to have an Art-Deco museum downtown in part of one of those buildings. A downtown Art-Deco museum would be a great fit for Tulsa. I have searched the web for art-deco museums and havent found but perhaps 1 or 2 and they were both more like tiny, cluttered, roadside, antique stores, not real museums. We could easily create the worlds premier Art-Deco Museum. I am actually suprised nobody else has done it.

[Renaissance]

quote:Originally posted by Chicken Little

quote:Originally posted by Floyd

On another topic, you never explained the revolving loan fund.  I'm curious about what it is and how it works in this situation.

If Booworld won't answer, Floyd, I will.  A revolving loan fund is a loan pool dedicated  to a special purpose, in this case it would be to breathe new life into downtown buildings.  As loans are repaid back into the fund, the fund grows and new loans are made.  Thus, the pool is constantly revolving and growing.

Because the fund's mission is something other than profit, you could do things that banks typically won't.  For instance, funds could be offered at a lower interest rate, and "riskier" loans could be made.  But if you really want to make the most of such a fund, you'd probably want to offer smaller amounts at market rates and to be used as seed money to leverage much bigger bank loans.  

Remember back in the day when you had to have 20% equity to get a loan?  Well, as long as the bank gets paid back first, the bank would see your 2nd position revolving loan as "equity" on your project.  And so the fund managers could use the revolving loan to leverage lots of bank loans.  This would allow them to achieve their mission more quickly...and in smaller bites.  By spreading that money out over lots of different projects, they'd be managing their risk pretty effectively.      

It's a good idea, but it's not magic.  I don't think access to loans is the problem downtown.  Kanbar certainly doesn't need a revolving loan.    And I would think that with the growing number of successes downtown (McNellie's, Philtower, and many, many more), that banks would be eager to make loans down here.

As I said, the problem isn't access to capital, it's access to vision.  The Tulsa Club guy has zero ideas.  He's intellectually bankrupt.  That's harsh, I know, but the guy apparently doesn't even have the smarts to keep the graffiti off of that gem of a building.  What does a stranger to Tulsa think when he or she sees this kind of craziness?  It hurts his investment in ways that far outweigh the cost of a can of paint thinner.  And, it diminishes downtown.

I can pretty safely say that he's not willing to borrow a penny at any interest rate, and he'll sit on that building and do nothing until it rots to the ground if he's allowed.  His "business model" is to camp out and wait for an angel to come along with a solution that makes him rich.  Ironically, he's the problem.  He's scaring the angels away.

So, if somebody offers up revolving loan funds as the solution for downtown, they either don't know what they are talking about, or they are trying to trick you.  It's a jitney.

As for the demolition ban, I don't know if I'm willing to go that far.  Personally, I'd like to see how the city does with this nagging and hectoring thing.    I'm confident that he'll either do something or sell.

Thanks for the explanation.  That definitely sounds like a program that could benefit Tulsa.

But I think a demo ban could help the architectural landscape of downtown, as long as it was discretionary.  Take Trinity Episcopal's demolition of the Auto Hotel, for instance.  That parking garage was junk--barely functional.  But it was a decent-looking corner building, providing that sense of urban streetscape that gives a downtown its feel.  A demolition review board could have said--alright, you can take down the Auto Hotel, but what you erect in its place must maintain the density of the streetscape.  Trinity's replacement wasn't the worst possible, but the church certainly could have done a better job of preserving the feel of the street.  That's just one possibility.  

Of course, the downside is that it's still government meddling with the rights of property owners.  It's still something to consider.  Doesn't OKC have something like it in place?

[dsjeffries]

Noticed some more graffiti on the Tulsa Club today as I shot pictures of the Slums on Elgin...





And here's one I took a while back: