ULI "Real Estate Roulette" on Oct. 13th

[George]

The Urban Land Institute (ULI) is having a fun event on Tuesday, October 13th with an interesting panel of OKC bloggers. The bloggers/panelists will be Steve Lackmeyer, Blair Humphreys, and Jeff Click. Everyone probably already knows Steve. Blair is also well-known in urban planning circles, plus he is kind of the “founder” of ULI Oklahoma. Jeff is a major suburban home builder and the president of the Central Oklahoma Home Builders Association.

We will discuss a range of important issues -- like MAPS 3 and what makes for a good real estate development -- from an Urban vs. Suburban perspective. Plus, we take a large number of questions from the audience. These events tend to be very participatory, which is what makes them fun. The event, called “Real Estate Roulette” (the reason for the name will be apparent if you attend), will be at Midtown Deli from 5:30PM – 7:00PM. To find out more, you can check out this link:

The Urban Land Institute


(Note to Mods: I hope this post is appropriate, given the subject matter and people involved. However, if you disagree, please accept my sincere apologies and feel free to move/pull the post. Thanks!)

[betts]

Thanks! Good planning to schedule it between the two preseason Thunder games. I'm going to try to go to this. Is the Midtown Deli big enough?

[Midtowner]

These three panelists will agree on far too much for this panel to be interesting.

-- that's not an innately bad thing, IMHO, since they're promoting a certain type of downtown development, but the model I'm guessing they'll be in favor of (i.e., using OCURA, condemning 'blighted' land and transferring to the wealthy and well-connected) is maybe not the best way to go about things.

[Steve]

Midtowner, you've not been privy to discussions I've enjoyed with Blair or Jeff. Don't be too sure on what to expect. Heck, I don't know what to expect other than a good meal at the MidTown Deli. Why don't you come and add to the mix. This is a very interactive discussion, and I've wanted to meet you anyway.

[George]

Betts: we think the size of Midtown Deli is perfect for this type of panel. In addition, we try our best to have these sorts of events at newer/emerging urban restaurants -- supporting these establishments fits in well with the goals of ULI and also seems to dovetail nicely with the kind of audience we attract.

Midtowner: with all due respect, it sounds like you haven't yet been to a panel where Jeff Click was one of the speakers. ;-)

[Midtowner]

You're probably right, George. I'm not as familiar with Jeff Click as I am with the other panelists. Panel discussions can be fun. Especially when there's a small group involved.

I'm not nearly as educated in these matters as the panelists probably are and I'm really hoping that they're selling something different than OKC's typical urban redevelopment model which awards political connections and old money rather than merit and good design.

Out of curiosity, what are Click's bona fidées with regards to urban development?

[George]

Midtowner, I've read a bunch of your posts so I know you are knowledgeable about and committed to intelligent urban development. Regarding Jeff Click: Jeff is a suburban developer, by design. That is why we think he is so integral to this panel. We really want to understand better what Urban Developers and Suburban Developers can learn from each other and, also, the rationale behind any key areas of contention.

To learn more about Jeff, you might start at Jeff Click Homes, L.L.C. - Divinely Inspired, Sinfully Stylish

or with his blog at ModernLandRun

Thanks for your interest, and we really hope to see you there!

[Steve]

Midtowner, this is a chance for you and others to push quality suburban homebuilders to take a chance on the central city.

[Midtowner]

Midtowner, this is a chance for you and others to push quality suburban homebuilders to take a chance on the central city.

Ordinarily, if there were freer credit out there, I'd think that downtown development would be a 'can't miss' proposition. You get the land for a song, build what are essentially a lot of spec homes on a smallish plot of land at a slightly higher cost, then you sell them at reeeeeediculous prices ranging from $125 sq. ft. in Midtown to $250-$300/sq.ft. in other parts of downtown.

I lived downtown for 5 years and loved it. I work in Midtown and can often be found downtown at the county courthouse or (crossing my fingers here because my application to the Western District of Oklahoma Bar is pending) at the federal courthouse.

I paid ~ $70 sq. ft. for a posh residence in NW OKC, touching lake Hefner, complete with bike trails, a fine golf course and one of the largest municipal parks in the country. I really liked downtown living and the lifestyle, but as a young professional, no way am I paying $250-$300/sq. ft. or even $125 when I know damn well that the costs in developing downtown, at least building brownstones, aren't a whole lot different from developing in suburbia, and if they are, there sure as heck isn't a $200 sq. ft. difference. It's a different type of development and my suspicion is that OKC homebuilders simply lack the expertise to enter the marketplace, meaning that they might have to do something more than fly on autopilot -- something they can pretty much do when developing suburban communities.

The problem with downtown development is that developers seem to be stuck on the notion that they can expect to see absurd profits by demanding sky-high prices -- much of their built in profits come from extremely low land acquisition costs [thanks to us taxpayers].

If I'm wrong, I'll apologize, eat my words, etc. I'm often wrong, so I have lots of practice at this. Could anyone educate me as to why and where I'm mistaken? I'd love to be a little more educated in this area.

[Steve]

Midtowner, you should come to the roundtable. I think you would enjoy it.

[soonerguru]

Why do we care what suburban developers think? No offense, but what suburban developers think and want have dictated our city's development for 50-plus years.

[Midtowner]

guru, they're the only folks developing at all in OKC. If someone's going to develop urban communities, it's either going to be an out-of-towner (not likely with OCURA politics) or a suburban developer. The best we can hope for is a suburban developer who cares to build an urban development.

[betts]

Ordinarily, if there were freer credit out there, I'd think that downtown development would be a 'can't miss' proposition. You get the land for a song, build what are essentially a lot of spec homes on a smallish plot of land at a slightly higher cost, then you sell them at reeeeeediculous prices ranging from $125 sq. ft. in Midtown to $250-$300/sq.ft. in other parts of downtown.

I paid ~ $70 sq. ft. for a posh residence in NW OKC, touching lake Hefner, complete with bike trails, a fine golf course and one of the largest municipal parks in the country. I really liked downtown living and the lifestyle, but as a young professional, no way am I paying $250-$300/sq. ft. or even $125 when I know damn well that the costs in developing downtown, at least building brownstones, aren't a whole lot different from developing in suburbia, and if they are, there sure as heck isn't a $200 sq. ft. difference.

The problem with downtown development is that developers seem to be stuck on the notion that they can expect to see absurd profits by demanding sky-high prices -- much of their built in profits come from extremely low land acquisition costs [thanks to us taxpayers].

If I'm wrong, I'll apologize, eat my words, etc. I'm often wrong, so I have lots of practice at this. Could anyone educate me as to why and where I'm mistaken? I'd love to be a little more educated in this area.

Midtowner, I'm really happy you only had to pay $70 a square foot for "posh". I seem to recall someone posting here last week who was thrilled to pay $82 a square foot in Mayfair Park, for a house that needed a little bit of work.

I built a house in Deer Creek, a house in Nichols Hills, and now I live in one of the brownstones. Twenty years ago I paid $90 a square foot to build a nice house in Deer Creek. Not posh by any stretch of the imagination. Floors were tile and carpet, it was built with 2 x 4s and had a wood roof. Ten years ago I built a house in Nichols Hills for $250 a square foot. It was a bit nicer, built with 2 x 6s, but had a composite roof, and some of the tile I picked out at home depot. I had granite in the kitchen only and tile and manmade counters everywhere else. I used an Edmond builder, who gave me his cost for everything, and simply charged me a builder's fee, so he wasn't making an absurd profit either.

I recently bought a brownstone for just over $200 a square foot. The kitchen and every bathroom have granite, I have far more wood floors than in my last house and nothing came from home depot. My walls are solid concrete, my roof is slate and my gutters are copper. I'm pretty satisfied, considering what I had in my other houses for what money. And, considering what I had to spend for my other houses, I'm not sure the builders downtown are raking in "absurd" profits compared to builders elsewhere. I'm pretty sure I read the Maywood Lofts cost $14 million to build. I'm trying to figure out how the builders are going to break even at that cost, much less make an absurd profit.

In every city I've lived in, it was more expensive to live downtown than in the suburbs. The only reason prices downtown here aren't even higher (and closer to what they are in other cities) is because there's less demand and more land. But, building costs are building costs, and if you get a bargain, you've either bought an old house, a house someone is desperate to sell, or one built with cheaper materials: cheaper quality wood, less insulation, cheaper roofing and gutters, builders grade tile and appliances, etc. Again, you get what you pay for, and if you need to pay less, you usually get less. If you want to pay more, you can get more.

[Steve]

Midtowner, George, I think Midtowner's comments should be presented at the roundtable. Ideally, Midtowner, I'd like to see you join up. If you want to challenge the status quo, get people thinking, then it seems like someone like yourself could be a great addition to this discussion.

[George]

Steve, I agree. I'd love to see Midtowner at the event in person because, to fully vet this issue, there probably needs to be a bit of respectful back-n-forth. I was just glancing at the attendee list and saw that there are already a number of experienced development professionals signed up. So, in addition to the panelists, there will be some good people in the room prepared to explore this issue.

Midtowner, I seem to recall (from other posts) that you work fairly close to Midtown Deli. If you have an interest and are available, please consider attending. Asking tough questions makes us ALL better off.

[jclick]

Ordinarily, if there were freer credit out there,
If I'm wrong, I'll apologize, eat my words, etc. I'm often wrong, so I have lots of practice at this. Could anyone educate me as to why and where I'm mistaken? I'd love to be a little more educated in this area.

Midtowner,

You are as correct as you think you are for the most part on both your urban and suburban characterizations. You're only considering part of the equation. We'll work through the math next week, and I hope to see you there.

[George]

I think Jeff will really help us to understand and examine the suburban vs. urban development equation. In addition to the other panelists, we have some very informed audience members who have rsvp'd for the event. Their insights also should be very helpful. To see these names, follow this link The Urban Land Institute, and when the page comes up click on "View Attendee List"

[bdhumphreys]

I posted a little preview over at imagiNATIVEamerica.com:

imagiNATIVEamerica.com ULI hosts a “Back Room” Discussion on OKC – Tuesday, Oct 13 at 5:30pm

Look forward to Tuesday and putting many a face with name - or avatar.

One more thing...

but the model I'm guessing they'll be in favor of (i.e., using OCURA, condemning 'blighted' land and transferring to the wealthy and well-connected) is maybe not the best way to go about things.

Not going to lie, this comment gets under my skin. I could strike back with all of the reasons you are wrong about my approach to planning and urban ideology, but I have read enough of your comments in the past to know we both care about OKC, so I am going to chalk it up to misunderstanding. I do hope you will come out to the event, introduce yourself after the event and let me know what you think.

If I'm wrong, I'll apologize, eat my words, etc.

If so, I will buy you a beer to help wash them down.

Cheers!

[pearlbluevtx]

Is this open or do you have to register on the ULI web site or call ULI to register?

[betts]

I was wondering if there is a walk-up option, as I may or may not be free at that time, depending on when I finish work.

[bdhumphreys]

Walk-ins are welcome. Come on by...and please introduce yourself. I am hoping to meet a lot of people from the OKC online community.

[George]

Many thanks to Jeff, Blair, and Steve for making this event so successful. Many thanks, also, to the audience, who seemed like a Who's Who from the OKC development/planning/design community. Additionally, it should be said that Midtown Deli is a terrific place to have an event.

[Midtowner]

George, you put on a hell of a program. The panelists were great.

Having my post read to kick things off was a heck of a surprise.

I think there was a consensus which I could easily agree with -- building a critical mass of people in downtown is going to require a more diverse bouquet of options than is currently available and maybe the new financing rules which will pretty much kill condo projects for the foreseeable future will help that come to pass.

[jclick]

Having my post read to kick things off was a heck of a surprise.

I saw the look on your face when you realized what Jon was reading! 'Twas great meeting you, sir, and I'm glad you could make it.

It was a privilege to be a part of such a great panel, not to mention the same room with so many knowledgeable players in the OKC Metro real estate market.

Thanks to Jon Dodson for moderating, and George for organizing!

[betts]

Very interesting meeting. I really liked hearing the different (and not so different) points of view.

One of the things that was not discussed, and which I think might be worth discussing, was an offshoot of the pyramid concept of development. Obviously, the meeting started with a discussion of the fact that there is not lower per square foot priced housing available downtown. Although I understand the concept that if you start off with less expensive housing downtown, you get the young, active people who create a vibrant environment that then older, wealthier people want to emulate, so you eventually get them buying the space and improving it. I think the concept works better in older cities. In New York, you originally had high end housing (brownstones) which, over time, gradually became less and less desirable as people moved away from the city center. When prices reached rock bottom and then some, you had a return of the vibrant community that again made the area a popular place to live and homes were improved. However, those homes were very well built to begin with, and their quality of construction has stood the test of time.

I fear that if you start with very inexpensive housing initially, the quality of construction will be such that it will actually decay rather rapidly, and you risk it becoming VERY low income housing over time. I've seen that happen with some of the new condos in places like Florida that attracted young buyers because of the low price points. That seems to make the concept of higher end housing eventually replacing lower end housing moot, but I'd be interested in hearing other opinions.