Bricktown developer plans auction of canal property in Oklahoma City
STEVE LACKMEYER
Published: November 25, 2008

http://photos.newsok.com/2/showimage/520129/lead620/

Gary Cotton proposed a $36 million two-tower development in January along the Bricktown Canal. The undeveloped properties, as depicted in this rendering, are set to be auctioned off next month. Rendering Provided



Gary Cotton is calling it quits in Bricktown and will offer up all of his holdings at a public auction Dec. 4.

Cotton bought his first properties a few years ago, but didn’t attract attention until he secured a prime undeveloped corner along the Bricktown Canal across from the AT&T Bricktown Ballpark. In January, he announced plans for a $36 million two-tower retail and condominium development that would span both sides of the Bricktown waterway.

That canal-front property, along with the former home of Margarita Mamma’s and an empty nightclub at 329 E Sheridan, will all be auctioned by Louis Dakil.

"I’m putting everything up for sale because I absolutely need to sell at least part of it,” Cotton said. "There’s a lot of disappointment; I wanted to do it bad. Hopefully somebody can pick it up and make it work. But I can’t.”


‘Potential is there’David Burnett, a broker with Sperry Van Ness who worked on the team that tried to market Cotton’s proposed "Cotton Exchange,” said the project designs will be available to property buyers.
"This is not a reflection on the property itself, but an owner who got stretched too thin,” Burnett said.

"The potential was there. We had a list of people who said no matter the price, at that location they would pay to be there.”

Burnett said his firm also had "strong retail” tenants interested in the proposed towers’ lower levels.

"The whole canal curves there at Mickey Mantle Drive — we have prime frontage all along,” Burnett said. "Somebody can have a full acre there if they want it.”

Burnett and Cotton said they think the Oklahoma economy remains in good shape despite the national crash. They also said the arrival of the NBA at nearby Ford Center adds to the properties’ value.

Jim Cowan, director of the Bricktown Association, is hoping any potential buyers will not be "flippers” — people who buy properties and leave them untouched hoping to reap a profit by selling a few years later.

Several high-profile properties in Bricktown have been on the market for months, but without any takers.

"I really hope whoever is interested will be interested in developing all this,” Cowan said.

"I really hope the days of easy flips are over.”

I wonder how this auction is going? It started at 2pm.

I wonder if slackmeyer is out there getting the scoup.

Of course he is.

any predictions on who the winning bid will be??

Hogan?
Funk?

I would be shocked if Hogan shelled out $5M for an acre of land.

I honestly wonder if anyone will come up with the minimum bid in this market. It's overvalued.

I propose a grassy knoll.

I propose a grassy knoll.
Done! Next order of business?

I'm on it. Story might surprise you.

KOCO just reported no one bid, it went unsold.

That's a quick take. There's more to it. The actual bids are what surprised me.

SURPRISE, SURPRISE, SURPRISE!!!

Actually I am not.

Save the "grassy knoll".

I heard this morning that the auctioner is going back to the highest bidders and seeing if they can negotiate some sort of deal.

Bricktown property’s auction a bust, so far
Owner remains confident after bids failed to cover his investment
BY STEVE LACKMEYER
Published: December 5, 2008

http://photos.newsok.com/2/showimage/523660/lead620/
Potential bidders and real estate brokers review a listing of properties before the Thursday auction of Gary Cotton’s Bricktown holdings. Photo By Steve Lackmeyer, The Oklahoman

Gary Cotton is hoping a buyer for his Bricktown properties might still result from an auction Thursday that failed to generate any bids that would cover his original investments.

Properties auctioned by Louis Dakil included the former home of Margarita Mama’s, 108 E California (on the Bricktown Canal), undeveloped canal front property, and the former home of the Green Door, 329 E Sheridan.

"I expected more. But I knew in this economy, I knew it was a gamble. So far, it hasn’t panned out, but something can still happen. I understand that with these things a deal can happen afterwards ... I definitely need to get one part of it sold,” Cotton said of the auction.

Cotton said he had been advised to go to auction in August, before the national economic crash.

At the time he was still hoping to find financing to build a $36 million mixed use development for the canal property he tried to launch in January, he said.

"I held on too long,” Cotton said. "I was trying to make my big deal happen. In retrospect, it was a bad decision.”

About 30 people attended Thursday’s auction. They included 14 registered bidders, Realtors, and fellow Bricktown property owners who have struggled to sell their own holdings the past year.

Dakil, who oversaw the auction with Sperry Van Ness, said talks were continuing afterward with potential buyers.

"I’m very bullish on Bricktown,” Dakil said. "Even with what’s going on nationally, there is still interest here locally.”


Things are changing
Jim Cowan, director of the Bricktown Association, said the relatively low bids at Thursday’s auction, when combined with a slowdown in property sales, might indicate the days of multi-million flips might be over.

"People are taking a more realistic approach to property prices in Bricktown than they have the past five years,” Cowan said. "More people are putting thought into how they get return on their dollar instead of just thinking ‘Wouldn’t it be great to buy a building in Bricktown.’”


The Bids
A handful of people submitted bids for properties offered up for auction Thursday by Gary Cotton. None of the bids exceeded Cotton’s undisclosed minimum price.

• Dakil said an unidentified bidder talked to brokers after the auction and offered to pay $1.5 million for undeveloped land along the Bricktown Canal across from the AT&T Bricktown Ballpark. County records show Cotton bought the same land for $2,075,000.


• Veteran Bricktown developer Don Karchmer bid $440,000 for a former nightclub building at 329 E Sheridan. Cotton bought the building in 2006 for $600,000.


• Baron Hopgood , who tried to start up a CBA basketball team in Oklahoma City last year, bid $1.43 million for the former home of Margarita Mama’s, 108 E California. Cotton has kept the building empty and unimproved since buying the canal-front building for $1.95 million in 2004.

Sounds like Cotton just needs to take what he can get and cut his losses.

City needs to start squeezing these owners that don't develop their properties to force them to either get off the pot and develop or sell for what they can. Heck some of those buildings aren't in the best of shape and city should condemn them and take them over.

.oO(donate corner parcel to UCO/School of Rock & continue to peddle the rest)Oo.

Sounds like Cotton just needs to take what he can get and cut his losses.

I agree. Looks like he'll have to bite the bullet and buy high, sell low. He bought into the hype and now the credit market is dried up, he's having to sell. Bad situation when you have cash calls when you don't have the cash.

He's lucky to even be getting bids this high. Better take the money and run. $1.5 million for Margarita Mama's is as good as it gets.

This is a perfect example of when real estate flipping goes bad.

This is a perfect example of when real estate flipping goes bad.

Not the exact legacy I bet Cotton was hoping for, he went from what would have been the largest private development in Bricktown, to probably Bricktown's biggest real estate loss.

This is a perfect example of when real estate flipping goes bad.

Remember though that Cotton's intent was not to just flip it. It was just really bad timing with the economy and he couldn't get financing.

I don't buy it that his intent was not to "flip" the property.

He totally bought this property to flip it and make an easy million or two. Then things started to cool down in the real estate market so he came up with a ten dollar computer rendering showing the possibility of a dream project in order to stir up more investors for the "flip".

It was only bad timing because he held onto these properties for to long. It all backfired on him, and let's all hope that he cuts his losses and moves on.

Remember he made some nice coin off of flipping other bricktown properties. And saying that he couldnt get financing as an excuse is no reason that his other properties remained vacant and unsightly.

This is all my opinion of course, as I have no factual evidence of his intentions. Although I do have a little knowledge of flipping properties too.

He didn't have the corner canal property more than a couple years, and that was not a cheap design.

A fairly detailed set of drawings by ADG, the involvement of Timberlake Construction and Sperry Van Ness is hardly the same as a ten dollar computer rendering. I have met Gary, but don't pretend to know him at all, so I have no real idea what his motivations were. But the players he involved were impressive, the plan was actually very interesting, and I guarantee those plans were not cheap to produce.

I obviously dont know the true details of this, but one thing sticks out to me. If he is in such a hurry to get rid of the property for financial reasons, then how in the hell did he think he had the money to develop his plan. If he can barely sit on the land, how was he going to build on it.

He didn't think he had the money. He was trying to get financing.

He spent some money to get ADG and others involved, we do preliminary design on developments all the time that never get built due to various reasons but we still expect to get paid. They spend money on all that preliminary design, developing pro-formas and market research, you have to have all that stuff lined up to get to the point of seeking financing. Almost everything is built using incremental financing, so you have to go through similar steps and hoops each time.

The reason why he probably needs to dump the properties, they were probably bought with financing and maybe the preliminary design was paid for out of those loans and they are now coming due. I have seen it happen more than a few times.

Like it was said earlier, Cotton needs to cut his losses and move one. Hopefully someone can get the ball rolling on these properties, especially the property on the canal.

I know Gary and he was really trying. Timing with the economy just blew up. He really tried hard and he invested a great deal of his own money to get it to the point of having a viable project. A year from now it will probably work. Til then, speculative developments paid with financing will have tough sledding, no matter how appealing they seem.

The other problem is that for anybody interested in a lot of these properties, credit has dried up. I was talking to somebody the other day who said a commercial loan officer at a local bank told them they were waiting for these bailouts of the big banks to trickle down and it's not happening.

Maybe it will soon start to seem like a better option to the owners to fill up the space that's down there than to finance expansions and speculative investing.

A year from now it will probably work.

What makes you think that?

I said it would work a year from now because there is a demand (demographically) for the type of housing he was proposing and for flats vs. the multi-level townhouses now being developed. Everything can't be lofts or 3-4 story townhouses. Traditional condos in the urban setting will be bought up by the older more sophisticated buyers who don't want to use stairs or an elevator just to go to bed. A year from now we will see oil back to the $70 level and credit flowing better. Recessions last 1 1/2 to 2 yrs. traditionally and we have been in one for a year now. Plus, given the time to construct, developers have to start ahead.

Updated?