They touched on one reason why keeping old buildings is so important - the rent is cheap. For a city that claims it wants to grow start-up companies and re-energize the core they need to know that can't be done at $20-$30/sq ft.

But if it gets redeveloped properly, it won't be cheap any longer. The reason it is cheap now is the same reason so many left and are leaving.

But if it gets redeveloped properly, it won't be cheap any longer. The reason it is cheap now is the same reason so many left and are leaving.

Yes, and do that enough times and it will eventually force start-ups and small offices out if the downtown market. I am not saying FNC specifically but just west are multiple class B and C buildings that are set to come down. If every thing cost top dollar where do start-ups go?

There is still plenty of Class B space downtown.

All of Chase Tower, for one large example but there are many others.

They touched on one reason why keeping old buildings is so important - the rent is cheap. For a city that claims it wants to grow start-up companies and re-energize the core they need to know that can't be done at $20-$30/sq ft.

Part of why often the hot spots for new development which change in a city after a neighborhood gets established enough that higher end business/retail/housing starts taking off in the area.

They touched on one reason why keeping old buildings is so important - the rent is cheap. For a city that claims it wants to grow start-up companies and re-energize the core they need to know that can't be done at $20-$30/sq ft.

That should be done with coworking installations, which is also a potentially fabulous untapped market in OKC, NOT by having copious Class C real estate. The reality is that there is NO market for Class C office space, regardless of the name of the city.

That should be done with coworking installations, which is also a potentially fabulous untapped market in OKC, NOT by having copious Class C real estate. The reality is that there is NO market for Class C office space, regardless of the name of the city.

Did you read the article? There are enough tenants left in FNC desiring class C rents to fill Hotel Black.

Also, for start-ups and the like they typically gather around the periphery; places like Film Row and Midtown and Auto Alley.

It's not often that the new guy just getting started goes and rents space in a CBD tower.

I would tend to agree with Spartan. C is pretty much undesirable space. Even at $9, you can find the same quality of space outside of downtown (as Pete said) at an even lower rate. OKC won't lose anything by losing all of it's C space downtown.

Lets not confuse B space with crap though either. It may not be the fanciest stuff, but it's suitable for most general offices. Some of the towers float between A and B depending on what the market is like and if the building has made and improvements lately or not.

Also, for start-ups and the like they typically gather around the periphery; places like Film Row and Midtown and Auto Alley.

It's not often that the new guy just getting started goes and rents space in a CBD tower.

That's because that is where the cheap rent is (or at least used to be).

That should be done with coworking installations, which is also a potentially fabulous untapped market in OKC...

YES. There are several here in Seattle:

https://www.wework.com/locations/seattle/south-lake-union
The Makers Space - Seattle Office Spaces (http://www.themakersspace.com/)
Coworking wiki / CoworkingSeattle (http://wiki.coworking.org/w/page/16583695/CoworkingSeattle)

There were (are?) a couple here. Not sure if any of them still exist.

Pete, have you heard any news regarding the sale?

No, I haven't heard anything.

I was told a couple of months ago that the current owners absolutely had to do something soon because there is almost no revenue (most the remaining tenants were cleared out) and tons of expense just to keep the doors open.

I should have more time next week to see if I can get more info.

I think if there is anything worth a TIF or maybe even a bond package it is this. First National Center is too important to allow to sit and continue to deteriorate. It would be so awesome to see it eventually become a hotel/residential as the people who were trying to purchase it wanted to make happen.

There have been open discussions about creating a TIF just for FNC, and I think that's the easy part.

The hard part is to get the current ownership out of the picture.

Did you read the article? There are enough tenants left in FNC desiring class C rents to fill Hotel Black.

I know. They are mostly public sector and/or stagnant enterprises...barbershops, Jari Askins, OK Dept of Tourism, Jari Askins, et al..

You were talking about startups. You can creatively find ways to produce a lot of startups in Class A space.

There have been open discussions about creating a TIF just for FNC, and I think that's the easy part.

The hard part is to get the current ownership out of the picture.

How about the taxes?

There have been open discussions about creating a TIF just for FNC, and I think that's the easy part.

The hard part is to get the current ownership out of the picture.

I've been reading a book of ninjitsu I got from the library and have some chinese stars from the mall. When I get really good with them, the current ownership will not be a problem.

I've been reading a book of ninjitsu I got from the library and have some chinese stars from the mall. When I get really good with them, the current ownership will not be a problem.

Had to laugh. My first twisted thought was, hmm, ya know, I know some people who probably know some people.

Molly Fleming (writer for the Journal Record) was teasing on twitter, "Interesting news about First National Center hitting the @JournalRecord website tonight and newsstands in the morning." Once it is posted on the JR website, I'll post it here. Pete, any idea what this might entail?

Coincidentally, I just talked to Amy Dunn (broker handling the sale) today and while she wouldn't say much, she said the deal was definitely not stalled, which I took as encouraging news.

She also implied there was something happening but wasn't ready to share.

Here you go... This all sound very encouraging.


Out of limbo: Documents reveal First National has buyer; judge rules sale should move forward
By: Molly M. Fleming The Journal RecordApril 29, 20150

OKLAHOMA CITY – Court documents regarding the lien placed on the First National Center reveal that the property has a buyer, and U.S. District Court Judge Stephen P. Friot ruled that the sale should move forward.

A lien was filed on the property in August 2014 by New York resident Howard Abselet. He claims he is owed $6 million by former building owner Aaron Yashouafar, who declared bankruptcy.

The building went on sale in March 2014 and all interested parties were supposed to submit offers by July 2014. The property did not have a listing price. The building is owned by Los Angeles-based Neman Brothers & Associates and is 26-percent occupied.

The sale should no longer be halted, Friot wrote.

“There is nothing in my determination today that prevents the closing of a sale of the First National Center,” Friot wrote. “I hasten to add that the court will certainly entertain any motion for interim relief that would, consistent with the rights of the parties, provide clarification or comfort to any prospective purchaser, title insurer, or lender. There is nothing to be gained by anyone, least of all the good people of Oklahoma City, from continuing this iconic property in a state of limbo.”

The center’s potential buyer, who was not identified, is ready to pay $23 million for the 992,000-square-foot center, according to the April 14 objection to motion for order directing escrow of sales proceeds and brief in support. The center stands along Park Avenue from Robinson Avenue to Broadway. Friot directed that the sale proceeds to be put into escrow.

Abselet’s attorney, John Stiner, also filed a motion April 14 to appoint Price Edwards & Co. Senior Vice President of Retail Jim Parrack as receiver. According to the motion, Parrack will agree to serve as receiver in exchange for a fee of 1 percent of gross sales proceeds and a flat fee of $10,000 per month to manage the property, plus $250 per hour for actual time spent.

A settlement conference was scheduled for Wednesday morning to iron out details, with another hearing regarding the escrow proceedings scheduled for Thursday morning. The motion to appoint Parrack as receiver will be reviewed on May 5.

Because of the pending sale, tenants on the upper-level floors were asked to leave, but first-floor retailers have not been dismissed. When their leases end, they are offered six-month agreements if they want to stay. Feed the Children’s Story of Hope announced last week that it will be leaving the center soon, but never gave a closing date.

Awesome!

First National Center is a massive piece of the puzzle for downtown OKC. While given the property's history I am going to be cautiously optimistic, this is very, very encouraging.

$23 million isn't much to give for that property but that low-ish amount is a good thing because it increases the likelihood they can actually make the project work.

I bet this closes pretty soon. It's been under contract for quite some time and the buyer has hung in there.

$23 million? That seems a bit steep.

For a million square feet?

For a million square feet?

That has to be complete gutted and 1/3 of it torn down and tossed in the trash. Yashouafar paid $21 million and it was widely believed he way over paid, especially considering the people he bought it from only paid $5 million. I guess that multiple parties were interested at +$20 million is a good sign for the OKC market.

http://newsok.com/okcs-first-national-center-runs-into-another-roadblock/article/5374184

Yashouafar made similar promises when he paid $21 million for the property in 2006. Observers questioned whether Yashouafar paid too much (the prior sale was $5 million and the property was in no better shape when it was sold to Yashouafar).

The property may not have been in any better shape but downtown has gotten to be more marketable location since 2006 though and is still improving

^^^^^^
Exactly

I don't know much about commercial real estate and receivers but 1% of the sales price plus $10,000/mo PLUS 250/hour for actual time spent for managing the property. Is this normal?

The property may not have been in any better shape but downtown has gotten to be more marketable location since 2006 though and is still improving

Yes, the market has completely changed in those 9 years.

Pete or someone else that knows how to calculate these things, how will this sale price effect comps for the convention center land, wherever it might be located.

I won't even include this sale in my downtown comps (which I keep and update periodically) because it's mainly building driven and not land driven.

Same reason I don't use Robinson Renaissance, the old IRS Building, etc.

Still hoping it becomes a boutique hotel! Can you imagine walking up the stairs to check in to your room and seeing the Banking Hall for the first time??

A hotel will definitely be a major component.

Nothing has changed in the deal as far as I know. Same buyers, same plans.

I don't know much about commercial real estate and receivers but 1% of the sales price plus $10,000/mo PLUS 250/hour for actual time spent for managing the property. Is this normal?

Wondered that myself.

A hotel will definitely be a major component.

Nothing has changed in the deal as far as I know. Same buyers, same plans.

Excited/cautiously optimistic. Whatever this becomes will certainly make the recommendations in that retail study for Park Ave look more viable.

I don't know much about commercial real estate and receivers but 1% of the sales price plus $10,000/mo PLUS 250/hour for actual time spent for managing the property. Is this normal?

Sometimes you gotta scrape by...

In regards to the Park Ave retail study, I hope they close the interior corridor.

In regards to the Park Ave retail study, I hope they close the interior corridor.

Doubtful

What does a receiver do in this instance?

I am afraid to goggle.

In regards to the Park Ave retail study, I hope they close the interior corridor.Doubtful

Why do you think it will be doubtful? They plan to tear down the middle section and put in a parking garage. Won't the garage be required to have sidewalk fronting space?

Why do you think it will be doubtful? They plan to tear down the middle section and put in a parking garage. Won't the garage be required to have sidewalk fronting space?

Yes, but they've said they plan to retain the mall which I assume would mean most of the retail space. Half of the retail space is on the south side of the building that backs up to the alley between FNC and the Main Street parking garage. That space is only accessible from the interior corridor. Even if they eliminate only a portion of the interior only access retail space by adding a garage, that would still leave quite a bit that they would lose by closing the corridor all together. There are also several elevator banks for the middle buildings in the corridor, so it would depend on how much of the office space they plan to remove for parking as to weather those elevators would still be needed.

Towering challenges: Escrow fund could allow First National Center sale, despite liens
By: Molly M. Fleming The Journal Record May 12, 20150

OKLAHOMA CITY – The First National Center was under contract to be sold in November, but the legal case over who should receive the sale’s proceeds has slowed the deal.

The debate isn’t expected to end soon, but recent court filings outline how the sale can move forward.

Howard Abselet filed a lien on the property in November 2014. Abselet is not an owner of the property, but he claims previous owners Massoud Aaron Yashouafar and Solyman Yashouafar owe him money, so he should get some of the profits.

Also, Simon, Nasser and Kefayat Barlava, doing business as Carla Ridge, filed a lien on the property in February 2015. Their claim is speculative and the details have not been completely reconciled, according to court documents.

The building is 50 percent owned by FNC I, FNC II and Joshua Paradise Holdings LLC, which are all operated by the Leon and Firoozeh Neman Family Trust. The other half is owned by a company called FNB II; Carla Ridge claims a 99-percent ownership in FNB II, but that is in dispute.

Until the ownership details and lien claims are clarified, U.S. District Court Judge Stephen P. Friot has ordered the sale proceeds to be held in escrow.

“If I didn’t think that plaintiff had a plausible shot at it, I would likely have done something other in the hearing last March than I did do,” Friot said, according to the transcript of a hearing on April 30. “But nevertheless, plaintiff (Abselet) has a fair amount of work to do, including some aspects of the matter that will require extraordinary adequate equitable relief.”

At the hearing, Friot asked FNC I, FNC II and Joshua Paradise Holdings to submit a proposed order for escrow, giving them 10 days to turn in their order. It was submitted on Monday. The parties asked that Abselet and Carla Ridge drop their liens. They proposed that $8.16 million be held in escrow, which represents Abselet’s claims. Another $1.4 million would be held for Carla Ridge.

The money would be held until directed to be dispersed by a judgment. Any remaining sale proceeds would be given to the FNC entities, because they are the current titleholders.

The building is expected to sell for $23 million. The potential buyer has not been disclosed.

Towering challenges: Escrow fund could allow First National Center sale, despite liens
By: Molly M. Fleming The Journal Record May 12, 20150

OKLAHOMA CITY – The First National Center was under contract to be sold in November, but the legal case over who should receive the sale’s proceeds has slowed the deal.

The debate isn’t expected to end soon, but recent court filings outline how the sale can move forward.

Howard Abselet filed a lien on the property in November 2014. Abselet is not an owner of the property, but he claims previous owners Massoud Aaron Yashouafar and Solyman Yashouafar owe him money, so he should get some of the profits.

Also, Simon, Nasser and Kefayat Barlava, doing business as Carla Ridge, filed a lien on the property in February 2015. Their claim is speculative and the details have not been completely reconciled, according to court documents.

The building is 50 percent owned by FNC I, FNC II and Joshua Paradise Holdings LLC, which are all operated by the Leon and Firoozeh Neman Family Trust. The other half is owned by a company called FNB II; Carla Ridge claims a 99-percent ownership in FNB II, but that is in dispute.

Until the ownership details and lien claims are clarified, U.S. District Court Judge Stephen P. Friot has ordered the sale proceeds to be held in escrow.

“If I didn’t think that plaintiff had a plausible shot at it, I would likely have done something other in the hearing last March than I did do,” Friot said, according to the transcript of a hearing on April 30. “But nevertheless, plaintiff (Abselet) has a fair amount of work to do, including some aspects of the matter that will require extraordinary adequate equitable relief.”

At the hearing, Friot asked FNC I, FNC II and Joshua Paradise Holdings to submit a proposed order for escrow, giving them 10 days to turn in their order. It was submitted on Monday. The parties asked that Abselet and Carla Ridge drop their liens. They proposed that $8.16 million be held in escrow, which represents Abselet’s claims. Another $1.4 million would be held for Carla Ridge.

The money would be held until directed to be dispersed by a judgment. Any remaining sale proceeds would be given to the FNC entities, because they are the current titleholders.

The building is expected to sell for $23 million. The potential buyer has not been disclosed.

At the hearing, Friot asked FNC I, FNC II and Joshua Paradise Holdings to submit a proposed order for escrow, giving them 10 days to turn in their order. It was submitted on Monday. The parties asked that Abselet and Carla Ridge drop their liens. They proposed that $8.16 million be held in escrow, which represents Abselet’s claims. Another $1.4 million would be held for Carla Ridge.

Assuming it works out like this, how quickly could we see a sale after that 10 day deadline?

This seems to provide a way forward for the sale, because the current owners are willing to set aside the funds being requested by the two other parties.

As long as they release the liens under this arrangement, the property can be sold with clear title, and then the past owners can deal with the other claims completely separately.

This seems to make the most sense for all involved, because even the people claiming they are owed money can only get it if the property actually sells.


I wouldn't be surprised if the sale now closes relatively quickly.

BTW, great job by Molly Fleming on all this reporting. She's the one that has been on top of this case the entire time.

This is just me, but if I was the lien holder I doubt I would drop me lien unless all the sales proceeds were put in escrow. No one gets paid until I get paid, especially the person that owes me money.

This is just me, but if I was the lien holder I doubt I would drop me lien unless all the sales proceeds were put in escrow. No one gets paid until I get paid, especially the person that owes me money.

Except that means there is little motivation for the current sellers which would also mean there will be no money generated.

Why would the lien holders want or expect more money to be escrowed than what is owed to them?

I wouldn't want more than what is owed but if the first party wants their $18 million bad enough that will provide them incentive to settle with me as soon as possible.

Speed bumps only work if they are in the way.

The liens are speed bumps; they were only to get the money owned to them.

Yes, and they can work it out in court at great expense over a long time with only one motivated party, or do it when the other party has something to gain, not when they have nothing to lose.

Anyhow, that is just how I would do it.

The basics of the Journal article seem to be what Steve and Brianna reported earlier would be taking place. Molly does flesh out some subsequent events, however.

Oklahoma judge clears way for sale of historic First National Center | News OK (http://newsok.com/oklahoma-judge-clears-way-for-sale-of-historic-first-national-center/article/5414847)

^

Molly Fleming wrote an article before that one, and it was very obvious the Oklahoman basically took her work and did a quick "me too" story as they often do.

I only point that out because you are misplacing the credit and diminishing the fact she did all the hard work.

^

Molly Fleming wrote an article before that one, and it was very obvious the Oklahoman basically took her work and did a quick "me too" story as they often do.

I only point that out because you are misplacing the credit and diminishing the fact she did all the hard work.

Pete, you're reading something into my post that I didn't do and wasn't intended. I think Molly does a great job. I also think Steve and Brianna do great jobs independent of Molly

Pete, you're reading something into my post that I didn't do and wasn't intended.

My apologies.

Steve and Brianna greatly expound on the complexities of this building.

Ownership of downtown Oklahoma City landmark is in dispute | NewsOK.com (http://m.newsok.com/ownership-of-downtown-oklahoma-city-landmark-is-in-dispute/article/5422722)

Steve and Brianna greatly expound on the complexities of this building.

Ownership of downtown Oklahoma City landmark is in dispute | NewsOK.com (http://m.newsok.com/ownership-of-downtown-oklahoma-city-landmark-is-in-dispute/article/5422722)

The whole situation sound crazy, how was that guy able to get all those people to keep doing business with him. I am pretty much on board with the guy saying the entire amount should be in escrow till the all the claims are settled.

Just sell the darn thing and let this band of swindlers and liars battle it out off to the side, where it impacts no one but them.