Page 2 of 2 FirstFirst 12
Results 26 to 42 of 42

Thread: 1720 NE 23rd - Oklahoma City Clinic & Global Health

  1. #26

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    I was wondering the same thing...

  2. #27

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    Quote Originally Posted by riflesforwatie View Post
    I'm generally strongly opposed to TIF but given how hard it is to get things built on the NE side, does it make sense in this case? Genuinely asking.
    There are legitimate issues with getting banks to lend money for projects over there.

    But in that case, the City could look at underwriting a loan rather than just gifting millions of tax dollars.

  3. #28

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    Quote Originally Posted by Pete View Post
    There are legitimate issues with getting banks to lend money for projects over there.

    But in that case, the City could look at underwriting a loan rather than just gifting millions of tax dollars.
    But they already have 55% of the project leased and ready to go. Its not like its a spec retail/office project with no guaranteed income yet.

  4. #29

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    Quote Originally Posted by onthestrip View Post
    But they already have 55% of the project leased and ready to go. Its not like its a spec retail/office project with no guaranteed income yet.
    Right but I was told by the developers that many banks simply won't lend money in that area of town.

  5. #30

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    Quote Originally Posted by Pete View Post
    Right but I was told by the developers that many banks simply won't lend money in that area of town.
    Then maybe its time they put up more of their own money.

  6. #31

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    I see this project is going to council tomorrow and the more I read about it the more I just cant square up the city giving $1,300,000 to this project, which is over 30% of the entire costs of the project. With it being 18,000 sf building, that equals $72 per square foot the taxpayers are subsidizing, that goes quite a ways in finishing out a space. When it comes to retail, $72psf will cover all of the finish out. I also wonder how true their numbers are on saying this is a $4,300,000 project. They are spending $239 per square foot on the entire project, and apparently only have less than half the building rented for now?

    Thats the problem with handing out TIF money so easily and frequently, the city is basically asking developers to fudge the numbers, claiming they are going to have to spend a ton of money and that their pro forma only shows the worst case scenario for rent/income. This is basically a handout, a freebie imo.

    https://agenda.okc.gov/sirepub/cache...7091937755.PDF

  7. #32

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    The cost to the City is actually well more than $1.3 million because this money is to be paid to the developers upfront and there are virtually zero funds accumulated through TIF #9 (NE side).

    So, the money is being taken from the 2007 GOLT funds and will only be repaid as TIF #9 starts to generate TIF revenue.

    Another case of lots of additional and hidden cost not quantified and included in the presentation. Very similar to the Omni deal where they made sure to leak numbers to the Oklahoman and then completely left out about $50 million in additional lending costs.

    In this case, let's think optimistically and say this loan term will last 10 years. At 5% that is an additional cost of $841,112, for a total of $2.141 million which equates to nearly 50% of the total project cost.

    If it takes 20 years to repay the City, that would be a total cost of $3.526 million or 82% of the total cost of this project.

  8. #33

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    The Oklahoman continues to mis-report the public money being given to this development:

    http://newsok.com/city-is-investing-...rticle/5571078

    Opposition to the financing deal was led by Ward 2 Councilman Ed Shadid, whose role as a critical eye on these projects is healthy for the city. The amount of the assistance with the clinic is indeed significant when compared to the overall project cost of $4.3 million.

    That is 30 percent, when most projects come in at under 15 percent.
    Completely misleading. The highest percentage of TIF ever awarded is 10% to the 21c Hotel. And the average is below 7%:

    http://www.okctalk.com/showthread.php?t=39599

    And I will restate: The City has to borrow money to pay the developers up front and that cost is not reflected anywhere in these figures, similar to how the Oklahoman failed to report the tens of millions in borrowing costs involved in a similar arrangement with Omni Hotels.

    And, TIF in this area will be depleted for years (probably for the life of the TIF) all on this one development.

    The public assistance for this project will come in at 5 to 10 times average and several multiples of the previous largest TIF award. And, they will be asking for more for Phase II.


    Whether that is warranted is another discussion but the reporting by the Oklahoman on this project has been outright deceiving and amounts to nothing less than opinion, advocacy and bad information masquerading as news stories.

  9. #34

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    Quote Originally Posted by Pete View Post
    The Oklahoman continues to mis-report the public money being given to this development:

    http://newsok.com/city-is-investing-...rticle/5571078



    Completely misleading. The highest percentage of TIF ever awarded is 10% to the 21c Hotel. And the average is below 7%:

    http://www.okctalk.com/showthread.php?t=39599

    And I will restate: The City has to borrow money to pay the developers up front and that cost is not reflected anywhere in these figures, similar to how the Oklahoman failed to report the tens of millions in borrowing costs involved in a similar arrangement with Omni Hotels.

    And, TIF in this area will be depleted for years (probably for the life of the TIF) all on this one development.

    The public assistance for this project will come in at 5 to 10 times average and several multiples of the previous largest TIF award. And, they will be asking for more for Phase II.


    Whether that is warranted is another discussion but the reporting by the Oklahoman on this project has been outright deceiving and amounts to nothing less than opinion, advocacy and bad information masquerading as news stories.
    This might be the craziest part of the story, they'll be back asking for even more! I just dont understand it. If they want to help NE 23rd, rather than highly subsidize ONE development, a fairer idea might be a streetscape improvement. There is a lot of good building stock along this stretch and $2million would go a long way if they improved sidewalks, streets, and lighting.

  10. #35

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    Seems like $1.3 million would be enough to buy the dang building outright AND bring it up to Class A or B standards (without tenant build-out). So is the city is being asked to subsidize both the developer AND the tenant costs? At least the other stakeholders/risk-takers are getting equity out of the deal. The city just gets a lot of risk with seemingly no tangible return.

  11. #36

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    ^

    Again, it's not $1.3 million. It's that amount plus borrowing costs which O'Connor and Co. always leave out when presenting.

  12. #37

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    Quote Originally Posted by onthestrip View Post
    This might be the craziest part of the story, they'll be back asking for even more! I just dont understand it. If they want to help NE 23rd, rather than highly subsidize ONE development, a fairer idea might be a streetscape improvement. There is a lot of good building stock along this stretch and $2million would go a long way if they improved sidewalks, streets, and lighting.
    ^^^^^^as an 'eastisder' myself I absolutely agree with your sentiments. Yet they still send odot over to the eastisder to repair streets with asphalt.....smh

  13. #38

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    Wanzer development gets $1.4M from 23rd Street TIF

    By: Brian Brus The Journal Record January 30, 2018

    OKLAHOMA CITY – An as-yet-unnamed retail and commercial district on NE 23rd Street received nearly $1.4 million for economic development from Oklahoma City Hall on Tuesday.

    In early 2015, the City Council adopted the Northeast Renaissance Project Plan and created tax increment finance or TIF district No. 9 in response to a proposal by developer group Twoyetmany LLC. The developers wanted to turn six parcels in the 1700 block of NE 23rd into 19,000 square feet of commercial space. The conversion would complement a nearby clinic, a Twoyetmany representative said. The project was estimated at more than $4.4 million.

    The commercial development takes an entire city block. Most of the buildings were constructed in the 1940s and ‘50s and have been vacant for years, development group representative David Wanzer said.

    “There are some challenges with this project,” he said. “There hasn’t been much development in the area. It’s been tough finding a partner bank for this.

    “We do have in place, at this point, some environmental issues with the service station that was across the street.”

    There are tremendous opportunities, including an ice cream shop, a barber, more restaurants, retail co-sharing incubator spaces and offices, Wanzer said. Tenants will have ownership of the project if they fulfill the lease terms. More than 70 percent of the building will be minority-owned businesses.

    This year, the TIF district review committee recommended assistance be provided as development financing in conjunction with private financing and after all equity is expended. About $575,000 of the funds will be in the form of a forgivable loan and $800,000 will be an incentive payment. The loan will require a second mortgage on the property and disallow reselling it for 15 years.

    However, in order to meet lender requirements, the developer requested the assistance be made as a payment up front. That’s not possible with the money current in TIF No. 9, but City Hall financial staff members reported they feel confident the district will continue to grow strongly and produce more money in time. So Tuesday’s resolution moved money from the 2007 general obligation limited tax, or GOLT, bond to the Economic Development Trust fund as an internal loan covered by TIF revenue.

    Farmers Bank and First Security Bank have agreed to be finance partners in the deal, Wanzer said. The Oklahoma City Black Chamber of Commerce is helping to name it.

    The banks won’t actually close on the loans until the entire project is 70 percent leased, which protects the city’s investment, he said.

  14. #39

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    Steve's article on newsok indicates that the TIF funding that was just approved is for the Phase II development.

    Pete, is that correct? If so, does that mean they never received any TIF funding for the clinic?

  15. #40

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    ^

    The $1.4 million is in addition to the TIF they had already been awarded for for the Clinic and first phase.

  16. #41

    Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    $2.8 million or so for a strip center. Crazy.

  17. Default Re: 1720 NE 23rd - Oklahoma City Clinic & Global Health

    ^^^^^^^^^
    Fair to say on the surface, but the hoops the developers had to jump through on this make for an incredible story, much of which will maybe never be fully told publicly. Suffice to say that in the financial sector there is a systemic bias against development in places like the NE side. Decades ago it was more overt and could be pointed to directly as redlining, but these days it is more insidious and put off onto things like comps, available tenant mix, lack of national credit tenants, etc.

    Bluntly put, if this center were west of I-235 this project would have been a slam dunk, banks probably would have been standing in line to lend money, and none of the convoluted (and expensive) developer/investor hoops would have existed. That’s reality.

    Though obviously on a smaller scale, in its own way this development was as challenging for its various participants to put together as First National was for ITS champions, and it really took Herculean effort from the developers, their investors, City officials, and even some tenants.

    Hopefully (and likely) this development will be a catalyst for growth on the NE side, and will provide a jumping off point for NE side businesses owners, plus make capital acquisition a little less onerous for future development in the area. As pointed out in the article there’s also an innovative lease structure whereby a tenant upon completion of their lease term will own a financial interest in the entire development.

    The whole thing is unusually complex and even with the TIF it represents a huge risk for the developers, who will have much less potential for financial reward here than the rest of their projects offer, owing to the unusual aspects required to put it together. At this point it’s become a passion project for them, and they will tell you that as much as anything this one (by necessity but also by opportunity) has become more about personal and professional growth than about profit.

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Oklahomans & Global Warming
    By Tundra in forum Ask Anything About OKC
    Replies: 74
    Last Post: 01-12-2016, 09:44 PM
  2. Oklahoma City National Memorial & Museum
    By Plutonic Panda in forum Development & Buildings
    Replies: 12
    Last Post: 02-08-2015, 10:06 PM
  3. whats your fave city in Oklahoma & why?
    By mireaux in forum Current Events & Open Topic
    Replies: 10
    Last Post: 06-27-2009, 10:06 AM
  4. Sexual Health in Oklahoma City
    By dismayed in forum General Civic Issues
    Replies: 16
    Last Post: 05-27-2008, 03:28 PM
  5. Replies: 28
    Last Post: 04-30-2007, 08:50 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Single Sign On provided by vBSSO