Downtown Deals Raise Questions
Curious deals downtown raise questions
By Steve Lackmeyer
Street Talk
What does it all mean?
That's the question that's popping up a lot this week after some curious transactions downtown.
Consider first Oklahoma RedHawks owners' refusal last week to submit a minimum $8.53 million bid for a city-owned parking lot east of the AT&T Bricktown Ballpark. Bob Funk and Scott Pruitt, who have a long-term lease for the lot, spent the past two years trying to convince the city that the spot is prime for development.
And, if McDonald's is ready to build a restaurant across the street at Reno Avenue and Lincoln Boulevard, who is to argue otherwise? Funk and Pruitt were working with established developers on plans for a mixed-use center involving retail, housing and a hotel. They threw out a lot of brand names like Ritz and Whole Foods, and suggested their investment could total $200 million.
Neither the city nor the team owners ever disclosed purchase offers submitted during closed negotiations, but numerous sources have indicated the amount was far less than the minimum bid ultimately set by the city. And that minimum bid was based on an appraisal that was calculated from other recent Bricktown property sales.
The whispering in some circles is that the city's failure to get a bid indicates that Bricktown property might not be as valuable as hyped. Even before last week, more than one broker confided that Bricktown may be suffering from "irrational exuberance.”
A lot of Bricktown property is for sale right now, and has been for months or even years. Homebuilder Jeff Moore turned heads by buying an entire block at Oklahoma and Sheridan avenues two years ago for $10.9 million. He started out with three restaurant tenants and a fourth lease pending. Now he's down to just two tenants.
Other recent buyers, including Gary Berlin, who bought the Oklahoma Mercantile Building, and oilmen Charles Harding and John Shelton, who bought the Zio's building along the Bricktown Canal, had no prior downtown development experience before entering the entertainment district. And former car dealership owner Gary Cotton has bought and sold several Bricktown buildings the past couple years and has yet to start any substantial development.
Bricktown has always been cyclical: boom in the spring and summer, bust in the winter. But tally it all up, and the amount of empty space seems to be heading up, not down.
The opposite is true in MidTown and the adjoining Arts District. And veteran Oklahoma City developer Nicholas Preftakes has spent millions this past year buying up properties along Hudson Avenue between Main Street and Sheridan Avenue. He's being coy about his plans, though he's generating a lot of speculation as to what he's up to.
Preftakes is not the kind of guy who would buy property in Bricktown. He prides himself as one who buys wholesale, and not retail. So he is seeing an opportunity along Hudson Avenue — but what is it?
A look at the overall site suggests that it is large enough to build a pretty impressive office tower with a view of the Oklahoma River, the Myriad Gardens and the downtown skyline. The block is immediately across the street from the Central Business District, within walking distance of City Hall, the courthouse, the art museum, and the City Center Garage.
And, as some have observed, it's also across the street from a site rumored to be the future site of a new Devon Tower (which may or may not be close to becoming a reality).
Certainly Preftakes isn't the only person buying up chunks of west downtown. Chip Fudge has been very active along Sheridan Avenue in an area being dubbed the Film District, while Greg Banta has recast MidTown as a localized entertainment district where one can live, work and play — without paying $5 or more to park.
All this leads to the question: Is the east fringe of downtown over-rated, and is the west fringe the next big development bonanza? We might very well find out within the next couple years.
Originally Posted by soonerkev
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