I'm re-posting this because 1) I think it got missed due the to dreaded page break, and 2) to emphasize we have at least two groups with deep pockets and great experience vying for this beautiful property, and there is absolutely no reason to be discussing demolition:

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It seems the “dream team” of local developers are very much in the picture for gaining control of First National Center.

My understanding is this group includes Mark Beffort, Andy Burnett, and Don Karchmer – and others as well.

There had been talk about them withdrawing but I was told by a reliable source that they came in with a strong, late bid and are one of the potential groups of buyers that were asked to make “final bids” by July 31st.

It may come down to them versus the previously-mentioned Alterra of Philadelphia.

No matter who may come out on top, it's a certainty they will need to work with Cathy O'Connor and the Alliance of Economic Development to obtain various incentives, grants, credits and financing. Cathy very successfully spearheaded a similar effort for the Skirvin Hotel.

The Skirvin was about a $50 million project; this will be 2 to 4 times that amount.

We probably won't know more until early next month.

This "Dream Team" would be an incredible group of developers. I hope you're right about hearing something as soon as next month. I wonder why Alterra is so interested? I looked at their onlin portfolio and everything they have done is in Pennsylvania.

If the “final bids” deadline is July 31st, what does that mean for the selection announcement? A few days, a few weeks, a few months?

It could be months after bids are due. This is still very early. Inspection periods on assets like that could be anywhere from 30 to 90 days!
And announcements are never before a property has had a chance to close, because contracts fall apart all the time.

Unless this is a special circumstance..?

They might not make an announcement for a while but our OKCTalk network will likely have more info in a week or two.

I love "our OKCTalk network." :)

This "Dream Team" would be an incredible group of developers. I hope you're right about hearing something as soon as next month. I wonder why Alterra is so interested? I looked at their onlin portfolio and everything they have done is in Pennsylvania.

Their web site says they have assets in 15 states.

I love "our OKCTalk network." :)

Can we get a show featuring Pete on OETA?

Then have like 10 minutes of people reading from Politics thread in funny voices.

Then have like 10 minutes of people reading from Politics thread in funny voices.

this would have been perfect for the cable public access channel we used to have. -M

Their web site says they have assets in 15 states.

I guess they're only proud of the ones in Philly.
Alterra Properties » Properties (http://www.alterraproperty.com/properties/)

So what exactly is the " Dream Team " going to do? Will this be Condo/apartments for sale/rent? Will it be mostly office space? Will it be the Convention Center Hotel? My vote is for, individual home owner units and office space. Then we build a highrise convention center hotel at another site. We need more info Pete/Steve/Anyone?

It was specifically built to allow for natural light into that otherwise windowless space.

Would love to see that feature returned -- it would make a huge difference.

If it gets glass back and the roof removed, won't they need some seriously thick hail-proof glass? Not sure how that worked there in the past...

So what exactly is the " Dream Team " going to do? Will this be Condo/apartments for sale/rent? Will it be mostly office space? Will it be the Convention Center Hotel? My vote is for, individual home owner units and office space. Then we build a highrise convention center hotel at another site. We need more info Pete/Steve/Anyone?

Lots of due diligence and financial metrics to do even for the winning team, but likely headed towards office & rental housing.........Pete has mentioned before it will not be a hotel.

If it gets glass back and the roof removed, won't they need some seriously thick hail-proof glass? Not sure how that worked there in the past...

The Great Banking Hall has many floors above it; the exterior light wasn't coming from directly above.

I believe the light was fed via external windows surrounding the room.

The Great Banking Hall has many floors above it; the exterior light wasn't coming from directly above.

I believe the light was fed via external windows surrounding the room.

Actually, the space directly above the GBH is open to the sky; the back of the tower is built in a u-shape around it.

If you were to put in clear glass in that skylight, you'd actually see the sky above.

Lots of due diligence and financial metrics to do even for the winning team, but likely headed towards office & rental housing.........Pete has mentioned before it will not be a hotel.

When did Pete mention that it won't be a hotel?


Sent from my iPhone using Tapatalk

Actually, the space directly above the GBH is open to the sky; the back of the tower is built in a u-shape around it.

If you were to put in clear glass in that skylight, you'd actually see the sky above.

I wish that were true, but when I was over at the Oklahoma City Geology Society they have windows that overlook that area of the roof. Steel beams and offices exist above the "skylight" that exists in the Great Banking Hall.

When did Pete mention that it won't be a hotel?

I had said that I had heard that most potential buyers were concerned about the huge amount of hotel space in the pipeline and the high cost required for hotel conversion and thus were shying away from that use and towards residential and office.

But at least from my end, my information wasn't that a hotel would definitely not be included. I actually hope that proves to be the case, I just think it may be less likely that previously presumed.

I wish that were true, but when I was over at the Oklahoma City Geology Society they have windows that overlook that area of the roof. Steel beams and offices exist above the "skylight" that exists in the Great Banking Hall.

What you saw were probably the light fixtures built over the skylight.

You can see the floorplate from the county assessor; note the plan in the upper left corner that shows everything above the 2nd level (where the GBH is located) as cutout:

http://www.oklahomacounty.org/assessor/Searches/Sketches/sketchfile/2730/R010013400001.jpg

If it gets glass back and the roof removed, won't they need some seriously thick hail-proof glass? Not sure how that worked there in the past...
Not that difficult, laminated glazing is readily available. All of the new Federal building has blast resistant laminated glazing.

Did Fiserv used to be a tenant here?

Did Fiserv used to be a tenant here?

I think so, and before them it was First data back in the early '80's.

Here's picture I took today with my phone that shows the light well over the banking floor.
8758

The Great Banking Hall has many floors above it; the exterior light wasn't coming from directly above.

I believe the light was fed via external windows surrounding the room.

solatubes before they were cool? :-)

Pete is right - there is a "courtyard" between the tower and the rest of the FNC that allows natural light into the Great Banking Hall - I think there are actually two layers of glass up there, the one that we see from the GBH and then a sturdier, opaque layer a few feet above that is meant to allow light in while acting a a roof of sorts - keeps hail, rain, whatever from coming straight into the building - I could be wrong on this count but when I officed in the FNC, you could never see directly into the bank through the glassed roof

I know they are showing the building off to interested parties - around 10:30/11 AM today there was a group of folks waiting at the top of the stairs to the GBH and Chuck Ainsworth was bringing someone into the FNC from across the street to meet them - supposedly Mayor Mick has toured the place recently with a group as well

What an absolute shame that this Grand Lady of a building has been allowed to waste away - three of the four elevators that go to the higher floors in the tower are not working, leaving only one working elevator to floors higher than 14 - the escalators to the skybridge across Robinson aren't working - we've all seen the pic of the current state of the former Beacon Club space - such a glorious building allowed to wither away

I get a kick out of the debates here as to what the FNC should be transformed into, at least the tower - I can't see it being transformed into a hotel, there's no room for parking, dropoff/check-in, valet, etc. like you see at normal high-end hotels - think Skirvin, Renaissance or Sheraton and their front door drives and then tell me where one would go for the FNC tower hotel as I can't dream up anywhere feasible - I *can* see it being transformed into some mixed form of housing and office space like across the street in the Ramsey Tower/Globe Building - but to do so will mean gutting the entire building to install basic infrastructure - water, heat, air, internet, gas, electricity, whatever utilities you'd need in everyday life would need updating - the floor plates would need to be rearranged without compromising the structural integrity of the building - there's too many hallways, boiler rooms, telephone closets, janitor closets, etc. on each and every floor that eat up space that could be otherwise turned into useable square footage

I'm hopeful that the building gets the revamping and treatment that it deserves from whatever group takes it over from the current ownership - and I'm hoping that whoever that group is has a passion for the FNC and doesn't just see it as yet another historic property to put a gloss on and flip

Bob Loblaw

There are several old office buildings that have been converted into hotels here in Denver and in Dallas and Houston that have very similar site constraints. Most of those hotels do not have a drive-thru, they use the street (parking lane), even most older hotels in urban centers have that same situationThe Magnolia hotel chain is based on that model and those hotels were built by gutting the entire building and building out what they needed. Even the Skirvin does not have the same layout that it did in its prior life, even for an office retrofit you would have to pretty much gut it as well.

There are several old office buildings that have been converted into hotels here in Denver and in Dallas and Houston that have very similar site constraints. Most of those hotels do not have a drive-thru, they use the street (parking lane), even most older hotels in urban centers have that same situationThe Magnolia hotel chain is based on that model and those hotels were built by gutting the entire building and building out what they needed. Even the Skirvin does not have the same layout that it did in its prior life, even for an office retrofit you would have to pretty much gut it as well.

True, and, if part of the office space to the east is converted to parking, it shouldn't be too difficult to use an area there for drop off and pick up into the main building. It doesn't have to be curb drop off.

Plenty of hotels in New York that have neither a drop-off or a parking garage, or any sort of parking accommodations, you're just "on your own". I know, this is not New York. Just saying it's doable.

^

OKC already has a bunch: Colcord, Skirvin, Ambassador, Hampton Inn, Hilton Garden Inn, Holiday Inn Express, etc.

You either park on your own or you valet your car and they charge you to park it at one of the nearby garages.


And of course, it's pretty much a certain any redevelopment of FNC will involve demolition of some or all of the non-historic sections east of the tower and replacement with structured parking, which would then be connected directly to the tower.

From Steve's article today:

OKC Central News Briefs - Midtown's Town House Hotel, Citizens Bank on NW 23 | News OK (http://newsok.com/okc-central-news-briefs-midtowns-town-house-hotel-citizens-bank-on-nw-23/article/5111460)

"A group I’d call a “dream team,” one that included Mark Beffort and Gary Brooks, absolutely did not submit a bid. They did make an offer months before the property’s Los Angeles owners decided to seek bids instead. Beffort on Wednesday reiterated to me they have not submitted any new bids since their earlier offer."

Looks like if it does sell it will likely be an out of state group..

^

Remember that what people say in the press is often carefully constructed semantics.

Even if they didn't officially submit a recent bid does not mean they are out of the running.

Did Fiserv used to be a tenant here?


I think so, and before them it was First data back in the early '80's.

They still are... on the 7th floor.

I've head the owners have narrowed it down to two: Alterra and the local group.

Should be making a final decision soon.

I've head the owners have narrowed it down to two: Alterra and the local group.

Should be making a final decision soon.

Help me out here Pete: does that mean they are definitely going to sell to one of them or is it just to see their proposals and what they are offering to buy the building for?

Help me out here Pete: does that mean they are definitely going to sell to one of them or is it just to see their proposals and what they are offering to buy the building for?

I would think if they're narrowing that they're definitely selling. If no one bid high enough originally, they'd have just "re-listed" it.

It seems they are pretty motivated to sell.

Beyond identifying finalists -- which demonstrates they have two potential buyers at least in the general ballpark -- their already limited cash flow is dwindling all the time, as their occupancy continues to drop.

I understand they've instructed the property managers to severely curtail a lot of the maintenance, which was hardly stellar to begin with.

They have to be losing money and it's only going to get worse. Even if they were willing to invest tens if not hundreds of millions, nobody is going to sign a lease with the present owners and they know it. Plus, there is no place for them to park anyway.


You add it all up and you can expect this property to sell in the next few months.

It seems they are pretty motivated to sell.

Beyond identifying finalists -- which demonstrates they have two potential buyers at least in the general ballpark -- their already limited cash flow is dwindling all the time, as their occupancy continues to drop.

I understand they've instructed the property managers to severely curtail a lot of the maintenance, which was hardly stellar to begin with.

They have to be losing money and it's only going to get worse. Even if they were willing to invest tens if not hundreds of millions, nobody is going to sign a lease with the present owners and they know it. Plus, there is no place for them to park anyway.


You add it all up and you can expect this property to sell in the next few months.

Best news I've read here in a long time!

I've head the owners have narrowed it down to two: Alterra and the local group.

Should be making a final decision soon.

It's been almost two weeks, what's the latest on this?

As far as I know, the ball is in the owner's court.

Does anyone know if First National Center has any openings for office space available? I went in there a couple months ago, and I wasn't able to see the girl who manages the property as she was on the phone with her boyfriend. I left my card for her with the receptionist, and we never heard back from her. They gave us permission to look around and I noticed that there are many empty floors. We also noticed they are doing construction, rennovation, or repair on the top floor. Does anyone have any idea what is going on?

^

They have tons of vacancy but may not be signing any new leases since the property is likely to sell very soon.

Along those lines, what happens to the already tight market when/if the existing tenants have to vacate after a sale?

So if the dream team buys it what are the chances we get an awesome night club/ jazz lounge and cigar lounge in this city again like First National Center used to have. I would love to have a really classy place in this city to meet clients and just hang out.

So if the dream team buys it what are the chances we get an awesome night club/ jazz lounge and cigar lounge in this city again like First National Center used to have. I would love to have a really classy place in this city to meet clients and just hang out.

Too early yet to say what the specific plans may be for First National but Fedora will soon be going in on nearby Automobile Alley and WSKY Lounge is small but pretty great.

Another options -- although not a cigar lounge -- is the O Bar in the new Ambassador Hotel in Midtown.


We should he hearing something about First National selling soon. I know the Dream Team thinks they have the upper hand.

Too early yet to say what the specific plans may be for First National but Fedora will soon be going in on nearby Automobile Alley and WSKY Lounge is small but pretty great.

Another options -- although not a cigar lounge -- is the O Bar in the new Ambassador Hotel in Midtown.


We should he hearing something about First National selling soon. I know the Dream Team thinks they have the upper hand.

I can't like this enough.

Pete, or anyone else that knows who is on the Dream Team, I'd like some opinions - based on the Dream Team's lineup and that of the Philadelphia developer, who would you prefer to see win the bid for First National? Outside of Devon, I've routinely felt let down by what OKC developers propose. They just seem to lack the grand vision and ability to execute at a high level like I've seen developers do in some other cities. Do you think we'd get a better final product with the group from Philadelphia? Or is Dream Team one that could really restore the luster to First National?

I think local developers/investors with a passion for OKC and this building are the best bet. We saw how things worked out when the current supposedly deep pocket investors from Los Angeles became owners. It's been a pretty big nightmare.

I know there have been some disappointments but there has been a lot of great development by locals: Devon Tower, Leadership Square, all the Midtown Renaissance stuff, the Colcord, etc. The renovation of City Place has also been top-notch.

With this property, I know all the serious bidders went in with the assumption they would be spending tens of millions (if now $100 million +) to make this complex really work in terms of cash flow. Taking out part of the non-historic eastern section to make way for substantial structured parking is almost a given.

The only real issue is what will become of the tower. Alterra (Philly) focuses almost exclusively on apartments and frankly, I'd rather see it go more towards hotel and/or for-sale units. I think that's the best bet for the Great Banking Hall seeing it's highest and best use as a semi-public space that could enjoyed by the entire community. It would also likely mean higher grade finishes across the board (vs. apartments).

Keep in mind the current owners don't give a rat's rear about what is best for OKC... They are just seeking the most money they can get.

But, part of being able to offer more is making the most of the various incentives and I would think the locals would have a big leg up in working with the Alliance and other local bodies in that regard. And Cathy O'Connor said as much.

Wanted to share more information about the current status of First National Center.

First, it has always been a bit unclear as to what happened when Los Angeles owner Aaron Yashouafar had the building on the brink of foreclosure, then suddenly transferred it to a new LLC. Was this truly a new owner or just another Yashouafar entity?

Turns out the property was in fact sold to an LLC which tracks back to Leon Neman, a prominent textile importer in Los Angeles. It seems Neman and Yashouafar were acquainted through the large and active Persian Jewish community in Los Angeles, which led to the sale.

Here is an interesting article about Neman and his brother and their role in the Persian Jewish community: Persian Arrivals | Rob Eshman | Jewish Journal (http://www.jewishjournal.com/rob_eshman/article/persian_arrivals_20040319)


Neman acquired FNC in late 2012 for $5.3 million; Yashouafar had paid $21 million in 2006, which seemed like crazy money at the time.

I've learned that when bids were first solicited for First National, members of the local “Dream Team” flew out to Los Angeles to meet with Neman.

However, after Neman received four bids all in excess of $20 million, the locals declined to pursue the property any further, as their initial number was well below that amount.

As we previously reported, it appears Alterra from Philadelphia remains the leader. They may also have a partner in the deal.

And although the Dream Team may not have submitted a formal bid, it is very possible that some or all the members may be drafted by the winning bidder to help shepherd the project through the labyrinth of grants, City incentives and development challenges that await.

It is also my understanding that all the development proposals are very similar: the tower would be converted to a hotel and part of the non-historic eastern section would be demolished in favor of structured parking. There may also be some office and/or residential depending on the group involved.

I'm not sure about a timetable for a decision on the winning buyer. I suspect there are lots of things happening behind the scenes in terms of due diligence with possible financing and various incentives.


However, it does appear 1) that Neman is motivated to sell and 2) he has plenty of healthy offers.

Also, since Neman only paid $5.3 million, looks like he will earn an incredible return on just a two-year hold.

Thanks Pete for the update. Any idea what kind of hotel chain we could see there? I am curious how it will affect the new convention center hotel.

Way too preliminary to know any details on a possible hotel, but there seems to be plenty of demand for hotel rooms.

Way too preliminary to know any details on a possible hotel, but there seems to be plenty of demand for hotel rooms.

Obviously there are. I would think this would be a higher end flag like what we are expecting for the convention center hotel, but obviously I know nothing about it.

It will be interesting to see if Clayco's proposal for the land south of the OG&E Tower includes a hotel.

I believe the OG&E location was looking to pursue one to help serve as conference space for OG&E and whatnot. Sort of a weird relationship fi you ask me. Ask someone else to build a second tower to house the hotel/conference space that you'll request to use so you don't have to maintain it. I mean I guess that way the room makes money when it's not in use by OG&E, assuming someone else IS renting it, but the ROI on adding a floor or two of conference rooms seems to be a lot better to me than some outsourced model like that...it's just strange. The hotel is really the same way....there are so many options (and will be more), why do this weird thing where they want some sort of un-owned partnership with that developer.

Anyway, I'm astonished that the new FNC owners have been able to find buyers like this. If the buyers are out there now, why where they not out there in 2012? If they're willing to fork over 20million after a 5million sale-off, it just seems CRAZY! Especially if they're doing this knowing that they are going to have to re-develop the thing. If it all holds out, I'm glad parking is going to become part of it (toss all that non-historic ugly crap). If you're a hotel, you HAVE to have it or people simply wont stay there. I would be concerned about the new buyers continuing the cheap road to renovation though. If they can see the thing was sold for 5 and they're having to fork over 20+, there's going to be a much larger radar of cost focused on any effort. Especially if it's going to be one that requires gutting out the piece of the property (albeit the ugliest) that is actually making money.

Obviously there are. I would think this would be a higher end flag like what we are expecting for the convention center hotel, but obviously I know nothing about it.

If converting FNC to a world-class hotel means scrapping the convention center hotel then so be it. FNC has the potential to be a very special place for Oklahoma City, possibly the city's "crown jewel" hotel.

First of all, you could not put the same type of hotel in there that you could build ground-up next to the convention center. A hotel in that building would probably fall somewhere between the Colcord and Skirvin (or even more upscale, which would be great), but with more rooms. A true convention hotel is a completely different animal.

That doesn't have any impact on landing a brand for the convention center. Second, scrapping plans for a true convention hotel adjacent to the convention center would severely limit chances for success for the most expensive of our MAPS 3 investments. Tell me again why that is in any way OK?

This is not a zero sum game; gaining a great hotel in FNC should have little or no effect on getting a great flag to participate in a convention hotel.

If converting FNC to a world-class hotel means scrapping the convention center hotel then so be it. FNC has the potential to be a very special place for Oklahoma City, possibly the city's "crown jewel" hotel.

Yeah, I have to agree with Urbanized on this and I don't think we are going to be pitting the two against each other. I would guess this one would be closer to getting a flag than the CC hotel since there is no plan in place right now for the CC hotel. I would love to see a Four Seasons or JW in this one and an Omni or W in the CC hotel. As Pete stated, there is plenty of demand for hotel rooms in the core, especially higher end so I think we can sustain both.

^^^^^^^
100% agree

Yeah, I have to agree with Urbanized on this and I don't think we are going to be pitting the two against each other. I would guess this one would be closer to getting a flag than the CC hotel since there is no plan in place right now for the CC hotel. I would love to see a Four Seasons or JW in this one and an Omni or W in the CC hotel. As Pete stated, there is plenty of demand for hotel rooms in the core, especially higher end so I think we can sustain both.

I was thinking Four Seasons myself for FNC. Ritz Carlton might be another possibility.

My only fear is that when the time comes to do incentives for this, the incentives for the CC hotel will suffer because they will probably be fairly close together. I know Shadid is opposed to incentives for the CC hotel. I will be interested to see what his thoughts on incentives for FNC will be.

Anyway, I'm astonished that the new FNC owners have been able to find buyers like this. If the buyers are out there now, why where they not out there in 2012? If they're willing to fork over 20million after a 5million sale-off, it just seems CRAZY! Especially if they're doing this knowing that they are going to have to re-develop the thing. If it all holds out, I'm glad parking is going to become part of it (toss all that non-historic ugly crap). If you're a hotel, you HAVE to have it or people simply wont stay there. I would be concerned about the new buyers continuing the cheap road to renovation though. If they can see the thing was sold for 5 and they're having to fork over 20+, there's going to be a much larger radar of cost focused on any effort. Especially if it's going to be one that requires gutting out the piece of the property (albeit the ugliest) that is actually making money.

OKC is *still* a risky investment for outside investors, but it's made up a lot of headway since 2012 mainly in terms of showing that the growth here is sustainable. Any city can have a good year, but OKC has made its most serious strides in the last 5 and every year has brought increasingly bigger/better development as more "infrastructure" has been put in place to ensure success of these developments.

For instance, the amount of hotels that an area can sustain increases with the amount of residents and businesses in an area. Well, in the last 2 years, how much has OKC's downtown housing stock grown? How many more businesses have moved into the area? It's been a significant amount.

Even though the County Assessor shows a sales price of $5.3 million, we don't know all the details of the transaction.

Perhaps there was an assumption of debt or liens on the property.

We do know that when this transfer was made that Yashouafar did not openly market it or hold any sort of bid solicitation.

Also, due to Yashouafar's well-earned reputation, the property was simply not as valuable in his hands. I'm sure people were very wary of entering into contract with him, especially since up until it transferred it looked like it was headed for foreclosure and other legal problems.