metro
10-28-2008, 09:12 AM
Devon Energy's plan creates growing interest in city-owned garages
by Brian Brus
The Journal Record October 28, 2008
OKLAHOMA CITY – Devon Energy Corp.’s interest in acquiring one of Oklahoma City’s downtown parking garages to support a massive new corporate tower has prompted the city’s parking authority to ask if anyone else might be interested in other lots.
Devon Energy Corp.’s interest in acquiring one of Oklahoma City’s downtown parking garages to support a massive new corporate tower has prompted the city’s parking authority to ask if anyone else might be interested in other lots.
http://www.journalrecord.com/_images/articles/t_labsbb-parking-garages_ms%20WEBSITE.jpg
(Photo by Maike Sabolich)
A request for proposals, or RFP, is expected to be publicly posted this week, said Rick Cain, administrator of the Central Oklahoma Transit and Parking Authority.“It’s not that we’re looking to divest the city’s parking garages,” Cain said. “But as a result of the Devon corporate tower development project … it has increased inquiries to us, to see if there are any garages up for sale.
“So what our board has said is that we’re not looking to get out of the parking business by any stretch of the imagination,” he said. “Let’s see what kind of true interest is out there. Is it just talk or are there people out there who are interested in a garage?”
Earlier this year, Devon executives announced plans to build a 54-story skyscraper just north of the Myriad Gardens. The tower and adjoining buildings are expected to cost more than $750 million. Work should be completed by 2012, officials said.
Devon Chief Executive Larry Nichols has said the company is interested in buying the larger part of City Center Garage, one of two parking towers sometimes referred to as Galleria parking just south of the downtown library. If Devon gains control of the building, the company would add five more floors to it and restrict its use exclusively for Devon employees and visitors.
That’s mixed news for Oklahoma City – expanding office space for about 3,000 downtown employees would be an economic boost, but city officials are expecting a headache during the shuffle of people from one area to another.
Oklahoma City operates six parking garages downtown, with more than 7,700 total spaces available. According to COTPA’s latest figures, total occupancy systemwide was 87.8 percent for September. The City Center Garage itself had 2,382 spaces sold out of a total 2,652 available.
Ironically, Devon’s expansion plans come at an inopportune time in the current economic downturn, Cain said. Because even though Oklahoma City’s credit ratings and finance history are nearly pristine, investors are tightening their wallets in even the best funding vehicles.
Standard & Poor’s earlier this year improved its rating of Oklahoma City’s series 2008 general obligation bonds to AA+, shortly after Moody’s Investor Service affirmed its own upgraded Aa1 rating of city bonds, placing Oklahoma City on par with large cities such as Dallas, Phoenix and Denver. High ratings mean lower interest rates the city pays to sell bonds to fund major capital projects such as streets, sidewalks and parks. The less the city pays in interest, the more there is to spend on bond projects.
“It’s not necessarily just a simple situation of someone offering a high price to buy a garage,” Cain said. “Because all of our garages are pledged as collateral for parking revenue bonds which were sold to support the system.
“So we really have to look at this in terms of the impact of that garage on the overall financial health of the system, as well as what it does to public parking. … That garage might be generating sufficient cash flow into the system to support some lesser-performing garages,” he said. “If we sell it, we could conceivably weaken the position of bond holders.”
by Brian Brus
The Journal Record October 28, 2008
OKLAHOMA CITY – Devon Energy Corp.’s interest in acquiring one of Oklahoma City’s downtown parking garages to support a massive new corporate tower has prompted the city’s parking authority to ask if anyone else might be interested in other lots.
Devon Energy Corp.’s interest in acquiring one of Oklahoma City’s downtown parking garages to support a massive new corporate tower has prompted the city’s parking authority to ask if anyone else might be interested in other lots.
http://www.journalrecord.com/_images/articles/t_labsbb-parking-garages_ms%20WEBSITE.jpg
(Photo by Maike Sabolich)
A request for proposals, or RFP, is expected to be publicly posted this week, said Rick Cain, administrator of the Central Oklahoma Transit and Parking Authority.“It’s not that we’re looking to divest the city’s parking garages,” Cain said. “But as a result of the Devon corporate tower development project … it has increased inquiries to us, to see if there are any garages up for sale.
“So what our board has said is that we’re not looking to get out of the parking business by any stretch of the imagination,” he said. “Let’s see what kind of true interest is out there. Is it just talk or are there people out there who are interested in a garage?”
Earlier this year, Devon executives announced plans to build a 54-story skyscraper just north of the Myriad Gardens. The tower and adjoining buildings are expected to cost more than $750 million. Work should be completed by 2012, officials said.
Devon Chief Executive Larry Nichols has said the company is interested in buying the larger part of City Center Garage, one of two parking towers sometimes referred to as Galleria parking just south of the downtown library. If Devon gains control of the building, the company would add five more floors to it and restrict its use exclusively for Devon employees and visitors.
That’s mixed news for Oklahoma City – expanding office space for about 3,000 downtown employees would be an economic boost, but city officials are expecting a headache during the shuffle of people from one area to another.
Oklahoma City operates six parking garages downtown, with more than 7,700 total spaces available. According to COTPA’s latest figures, total occupancy systemwide was 87.8 percent for September. The City Center Garage itself had 2,382 spaces sold out of a total 2,652 available.
Ironically, Devon’s expansion plans come at an inopportune time in the current economic downturn, Cain said. Because even though Oklahoma City’s credit ratings and finance history are nearly pristine, investors are tightening their wallets in even the best funding vehicles.
Standard & Poor’s earlier this year improved its rating of Oklahoma City’s series 2008 general obligation bonds to AA+, shortly after Moody’s Investor Service affirmed its own upgraded Aa1 rating of city bonds, placing Oklahoma City on par with large cities such as Dallas, Phoenix and Denver. High ratings mean lower interest rates the city pays to sell bonds to fund major capital projects such as streets, sidewalks and parks. The less the city pays in interest, the more there is to spend on bond projects.
“It’s not necessarily just a simple situation of someone offering a high price to buy a garage,” Cain said. “Because all of our garages are pledged as collateral for parking revenue bonds which were sold to support the system.
“So we really have to look at this in terms of the impact of that garage on the overall financial health of the system, as well as what it does to public parking. … That garage might be generating sufficient cash flow into the system to support some lesser-performing garages,” he said. “If we sell it, we could conceivably weaken the position of bond holders.”