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Thread: Great Plains costing Tulsa big bucks

  1. #1
    Patrick Guest

    Default Great Plains costing Tulsa big bucks

    With the followout from the Great Plains collapse comes a huge bill to the city of Tulsa. Obviously, it was a matter of time before this was to happen. Tulsa put about millions to try to make Great Plains a success. Was the risk worth it? Well, in my opinion it was. Sure, they lost money on this deal, but I think we need to offer more incentives like this to try to get better air service in our city and state. You win some, you lose some! Unfortunately, Tulsa just lost out on this one, and they're probably going to hear about it from their citizens for sometime.

    IMO, it's just a risk you take to try to improve your airport. I commend the Tulsa Airport Trust for trying to make something happen. I wish our Airport Trust was that forward thinking.

    "Great Plains' end may cost Tulsa
    By Adam Wilmoth
    The Oklahoman

    TULSA - Great Plains Airlines appears permanently grounded after the carrier asked a bankruptcy court to liquidate the company last week.
    The motion probably is one of the final steps for the troubled airline that had attempted to create direct air service from Oklahoma to the East and West coasts.

    Besides losing the promise of improved air service, liquidation could leave Tulsa with a bill for $7 million to $9 million because of loan guarantees made by Tulsa International Airport, according to a Tulsa City Council report released in November.

    "It's bad news to worse news for the education system, the police force, the emergency system, the city workers and the rest of Tulsa," Tulsa money manager Jake Dollarhide said. "What was a bad situation for the common traveler is now a bad situation for the common citizen who normally wouldn't have been as affected."

    Tulsa Finance Director and acting Airports Director Mike Kier said he could not comment on the possible debt because of an active lawsuit between the airport and its former general council about that issue.

    Kier, however, said he was not surprised by Great Plains' decision to liquidate.

    "The movement from reorganization to liquidation is probably less surprising given the amount of time they've been in Chapter 11, not really making any progress during that time on any fronts," Kier said. "I know they tried to do some things to see if they could keep the airline going, but I don't recall them making any encouraging announcements about those efforts."

    Great Plains executives and their attorneys did not return phone calls to The Oklahoman on Monday.

    In its bankruptcy filings Friday, Great Plains said it had no choice but to convert to liquidation because all its efforts to emerge from bankruptcy had failed.

    Great Plains filed for Chapter 11 Bankruptcy protection Jan. 23, 2004, citing "heavy debt" and a lengthy repair schedule for two of its aircraft. The airline then tried to reorganize, but over the next year, the carrier's five aircraft, maintenance division, spare parts and most other assets were either repossessed or sold.

    The company said its recovery strategy ranged from resuming scheduled airline service to providing charter service to providing cargo service.

    Most recently, the airline tried to sell to another company with the hopes the new owners would continue service from Tulsa and Oklahoma City. A memorandum of understanding was reached Nov. 1, but the potential buyers decided not to purchase the carrier because of failed attempts to obtain long-term funding, Great Plains said in the filing.

    Besides the grants and loan guarantees the airline received from Tulsa, the Legislature also contributed $27 million in two rounds of tax credits in 2000 and 2002.

    Rep. Kevin Calvey, R-Del City, said he hopes the state learns from the failed attempt to support the airline.

    "I think it's a sad event, but I also think it's a very good lesson for all policy-makers that we shouldn't be throwing around tax credits like we did on a venture like that," said Calvey, who led the fight against Great Plains' second round of tax credits in 2002. "Policy-makers should be much more cautious about corporate welfare. But if you can learn from your mistake, you're ahead of the game."

    Rep. Darrell Gilbert, D-Tulsa, agreed that legislators should be more cautious about supporting similar companies in the future, but he also said the promise of nonstop flights to the coasts was worth the investment.

    "I think it was a good risk to begin with, but nobody predicted that 9/11 would happen," Gilbert said. "And even after 9/11, there was still the hope they could increase their routes."

    Great Plains creditors have until mid-February to file complaints to the liquidation motion. "

  2. #2

    Default Re: Great Plains costing Tulsa big bucks

    Is anyone even surprised by this outcome?

  3. Default Re: Great Plains costing Tulsa big bucks

    After the trouble Great Plains had expanding, it does not surprise me at all they had to file chapter seven. It really is a shame they could not have survived. It was a great idea.

    Maybe they can try again, but be a commuter airling serving small cities in Oklahoma like Ponca City, Enid, Muskogee, McAlister, Lawton, Ardmore, Wichita (not really small, but no service from OKC), and a couple of others. Those cities need service from here. BADLY!

  4. #4
    myshero55 Guest

    Default Re: Great Plains costing Tulsa big bucks

    I wonder if anyone is still keeping an eye on "Great Plains" today. BOK, who recently supposedly paid $11 million for naming of a new arena after them, is suing the City of Tulsa for 7 million because it did a loan to the airport and used city land as collateral, a no no, and now wants the city to repay them. Yet, because they (BOK) are such good buddies with the City, they want the taxpayers to pay for a loan that they knew (or should have known), was bad, so they can pay back their (Great Plains) investors (behind the scenes).

    BOK or Great Plains didn't ask John or Jane Doe Taxpayer if we wanted the credit, but we will be required to foot the bill.

    These guys are smart. Make the citizens pay for a private deal and we will walk away with the biggest credit, which is a writeoff from Uncle Sam, and the taxpayers are footing the bill because we of a good idea. I wonder if I could get that kind of deal. That is smart.

    Tulsa is in financial trouble because the Mayor, whose relative serves on the BOK board, is making stupid/smart decisions on obsurd economic development iniatiatives that the suburburbs are growing twice as fast as the metro part of the city and because the X Mayor (Savage) is the Secretary of State and I'm sure has some undue influence on who gets credits, or who gets recommendations from the state. Because after all she was the person that set all of the outreagous (for us citizens) in the works before she left office.

    I'm sure most of the people that think its a good deal are those that don't understand the magnitude of having to pay back more than $50 mill in tax credits and bad loans. I'll trade places with them any day

  5. #5
    swake Guest

    Default Re: Great Plains costing Tulsa big bucks

    The Mayor's relative on the BOk board is his uncle, the former mayor, and LaFortune was not mayor when the loan was made, so that is not even a connection. What's more, Susan Savage WAS mayor when the loan was made, not secretary of state, so she could not have had undue influence on the state credits given to Great Plains.

    It was a tough loan to make, that's why BOk wanted the city to put up land at the airport for collateral. The city, or rather the city's and airport authorities lawyers, should have known it was not legal to give that land as collateral, as the FAA stated, but, nothing was criminal, as also stated by the FAA, and none of loan mechanism was hidden. The lawyers didn't do thier homework, and they and the director of the airport were then correctly fired over this.

    Anyway the main reason the airline didn't make it was not fraud, it was 9/11, and that was not foreseeable, to the bank or the city.

    Playing very lose with the facts there myshero, where did you get them? KFAQ?

  6. #6
    myshero55 Guest

    Default Re: Great Plains costing Tulsa big bucks

    Yeah Sure. If you're a bank around as loon as BOK, you know the land is not available for collateral. Yeah, Savage was the Mayor, and now she's SOS. Coincidence, I don think so. Plus, now Mayor, gave an additional $mill but know one knows how it was spent.

    Plus even councilors (Mautino) admit the bank admitted to them that they were not going to make the loan because it was not a good loan, but ended up doing the loan anyway. WHY? If Kansas, OKC and others didn't want the deal, why would Savage, and Lafortune continue to throw good money after bad?

    Things that make you go HUM!!!

    Besides that, please tell me why BOK is always the only bank that gets all the financial deals (bonds, etc) and other banks don't. Nothing seems to deter them from continuing to do business with the city. Could it be that there is some strong hold on City Hall by members from BOK and BOK family members and friends? They make many loans and donations to family members, and the Mayor gives those same family members all the federal funds. WHY? Where's the competition in this.

    I'd have no problem if it was a business deal among friends gone bad, and I don't have to foot the bill as a taxpayer. But that's not so.

    Well, check these fact and let me know.

  7. #7
    swake Guest

    Default Re: Great Plains costing Tulsa big bucks

    You have no facts, family members of what family? I think you have confused BOk with F&M Bank. The Lorton's (Tulsa World) are friends with the Davis family that owns F&M and there are some intertwined deals there between the World and F&M, that is easier due to the fact that F&M is small and is not a publically traded bank.

    As for BOk getting a lot of deal with the city and such, we the public have asked that as much money as possible stay in town when the city does deals, well, BOk is the only really large bank based in Oklahoma, so that kind of follows. As for who owns BOk, it is a publically traded bank. Now the family of the bank would have to be George Kaiser, he owns a controlling interest in the bank. I'm sure that $7 million is a huge deal to him and he colluded with the city to rip off the citizens of Tulsa of that money.

    Of course, he's one of the wealthiest men in the world and is the wealthiest person in the state, Let's see, $7 million is what percentage of $3 Billion? Oh, and he's already stated that he's going to donate the vast bulk of his estate to different causes in Tulsa and Northeastern Oklahoma. So, he ripped off the people of Tulsa, making his status as CEO of BOk in jepordy, just so he could give that $7 million back, it being less than 5% of his net worth. Right, that makes perfect sense.

    And for the record, you have presented no facts, only accusations.

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