TAP sues Kerr McGee -- Condo deal off

[Pete]

Downtown condo deal off, group sues Kerr-McGee
by Ted Streuli
The Journal Record
8/11/2006

OKLAHOMA CITY – A $30 million deal that would have converted vacant downtown offices to condominiums and retail space fell apart Thursday, prompting a legal fight among partners.

The deal, announced in November, called for Corporate Redevelopment Group LLC to convert vacant buildings owned by Kerr-McGee at 324 N. Robinson Ave. and 135 Robert S. Kerr Ave. into 70 condominiums and street-level shops.

Corporate Redevelopment Group, known as CRG, is led by TAParchitecture, which is allied with Kerr-McGee in The Triangle, another downtown housing development. CRG filed a lawsuit Thursday accusing Kerr-McGee of a contract breach that cost the plaintiff at least $8 million.

“We anticipated it closing today, but we reached an impasse,” said TAParchitecture principal Anthony McDermid. “I’m very disappointed for our development group and the prospect of the project for downtown.”

In exchange for the property, CRG agreed to build a parking garage near Kerr-McGee’s offices for the company’s use.

“After that was completed, Kerr-McGee would provide to CRG the properties,” said Kerr-McGee spokesman John Christiansen. “Awarding of the properties was contingent upon the garage. We stand ready to perform under the terms of that contract, but CRG sought to change the terms.”

When Kerr-McGee’s sale to Houston-based Anadarko Petroleum was announced in June, Christiansen said the real estate deals would move forward as planned. But CRG argued in its lawsuit that Kerr-McGee made plans to squelch the deal as soon as the Anadarko deal was struck.

“A representative of Kerr-McGee even informed CRG, after the proposed merger was announced, that Kerr-McGee Corp.’s new parent company was not interested in proceeding with the projects,” the plaintiff said in the petition.

McDermid said Anadarko officials last week refused a request to meet with CRG.

Anadarko completed its acquisition of Kerr-McGee on Thursday, but Christiansen said the two scheduled closings and their outcomes were unrelated.

McDermid said June 25 that the project to rehabilitate the former office buildings was in the design stages. The site at 135 Robert S. Kerr Ave. is an 11-story building built in 1921 with 155,911 square feet; 324 N. Robinson Ave. is a 10-story building with 75,584 square feet and was built in 1923. A third building, at 111 Robert S. Kerr Ave., was part of the deal, but its future had not yet been planned. That structure, a 38,736-square-foot, seven-story building, was built in 1902.

“I can’t quantify it, but it will certainly have a slowing effect on the delivery of any for-sale housing in the central business district,” McDermid said. “But we believe so strongly in the merit of the project that we are still open to any prospects to complete it.”

[Doug Loudenback]

Very distressing. Perhaps the project is not yet dead ...

[SoonerDave]

Certainly is nice to know the new owners of Kerr McGee are working hard to burn those bridges...

-SoonerDave

[Midtowner]

Well, the new owners may have a better use planned?

Doubt it, but all we spectators can do is remain optimistic.

[BDP]

Obviously, I don't know the specifics of the agreements, but usually when you buy a company you buy all of their agreements, along with their liabilities. If Anadarko doesn't want to hold up Kerr-McGee's end of the deal, then it sounds like CRG is due some restitution.

Who knows, this could lead to CRG being able to complete the project without assistance... The worst case would be if Anadarko decides that they don't want to do it and that it's worth it to fight the agreement. I can't imagine that 8 million would be worth it to them at this point, but we'll see how messy it gets.

The interesting part of this deal is that Kerr McGee wanted the garage for their use. Now that they're not here, they can't use the garage, which may mean they don't have to hand over the properties. It'll come down to the wording, I imagine, as most things do.

[Pete]

It sounds like the new owners just don't want to put up the money for the garage, which was part of the deal.

They probably also want to take stock of all the real estate holdings before they let anything go forward.

Such is the way with big business.

[metro]

I saw that in the Daily Oklahoman today. I don't think the deal is dead yet, at least I hope. I know some people behind the scenes and will see what I can find out.