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Thread: First National Center

  1. #451

    Default Re: First National Center

    Here it is, Pete:

    First National Center owners seek dismissal of Chapter 11 bankruptcy
    by Brianna Bailey
    Published: April 11th, 2012

    OKLAHOMA CITY – The owners of downtown’s First National Center are asking the court to dismiss their Chapter 11 bankruptcy as they struggle to find a lender willing to finance a $12 million settlement with Capmark Bank that would allow them to keep the 33-story art deco tower.
    Under the terms of their settlement with Capmark, First National’s owners have until May 27 to give the bank $12 million in cash to release them from a mortgage on the property. If the money doesn’t materialize, First National will be placed in receivership.

    First National’s owners already have put up a $1 million deposit as part of their settlement with Capmark, but don’t have the rest of the money on hand and have been unable to find a willing lender, according to court documents.

    In a motion filed April 5, First National’s Los Angeles-based owners said banks have been reluctant to lend them the money to finance the deal while the historic downtown property lingers in bankruptcy.

    “Each of the potential lenders that the debtors have approached has indicated that it cannot provide the debtors with takeout financing unless and until the debtors have dismissed their Chapter 11 bankruptcy cases and the property is out of bankruptcy,” First National’s owners said in the court filing.

    First National’s owners also said in court documents that it has been a challenge to find new tenants while the building has been in bankruptcy.

    “The debtors believe that prospective new tenants are extremely uneasy about moving into a property which appears to be on the brink of foreclosure and which may change ownership or management at any given moment,” First National’s owners said in the court filing. “The debtors believe that the dismissal of their bankruptcy cases will alleviate these types of concerns by prospective new tenants and help the debtors attract new tenants to the property, which would increase the debtors’ rent revenue and ultimately improve the debtors’ ability to pay their outstanding debts.”

    In their court filing, First National’s owners said they believe Capmark Bank plans to fight their request to have the Chapter 11 bankruptcy dismissed.

    However, Rob Robertson, an attorney representing Capmark, said the bank hasn’t made up its mind yet whether or not it will oppose First National’s motion to dismiss the bankruptcy.

    “Initially we were not in favor of it, but once they filed the motion, it caused Capmark to reconsider its options,” Robertson said. “A decision hasn’t been made yet.”

    The partnerships First National Building I and First National Building II, both associated with Los Angeles-based Milbank Real Estate, bought the First National Center in 2006 for $21 million.

    Both entities filed for Chapter 11 in October 2010 after Capmark Bank attempted to foreclose on the property and appoint a receiver to take over operations at the downtown center.

    First National’s owners are confident that they can exit bankruptcy and resume renovations on the building, Milbank Real Estate CEO Aaron Yashouafar said in a written statement.

    “The ownership is pleased that it has been able to resolve its differences with the lender and that in fact an amicable resolution was reached,” he wrote. “With the issues resolved with the lender, the ownership of First National Center is prepared to come out of bankruptcy and continue its effort toward renovating and upgrading this historical icon of Oklahoma City.”

  2. #452

    Default Re: First National Center

    I'm not buying this, but I frankly don't know. I imagine that other companies in bankruptcy (American Airlines' parent AMR Corp. comes to mind) are able to arrange for financing contingent upon their discharge from bankruptcy. So why can't Milbank attempt to do the same?

    I suspect that either that they truly can't find anyone willing to lend them money under any circumstances, or they're still playing games with the court and creditors.

  3. #453

    Default Re: First National Center

    I'm sure Capmark would rather have $12 million than this building back, so there are having a hard time deciding if it's worth the risk of not contesting this release from bankruptcy.

    However, the current owners have yet to deliver on multiple promises and commitments and if Capmark doesn't think the building is worth $12 million then other lenders aren't likely to take it as collateral either, especially given the track record of the people that would be borrowing the money.

    I suspect this is yet another ruse to delay and stall, which seems to be Milbank's m.o.


    Frankly, I think OKC would be better served by Capmark taking back control and then taking our chances with a new owner who at the very least will have much less up-front investment and thus a better chance of making this project work.

  4. #454

    Default Re: First National Center

    Quote Originally Posted by Pete View Post
    I'm sure Capmark would rather have $12 million than this building back, so there are having a hard time deciding if it's worth the risk of not contesting this release from bankruptcy.

    However, the current owners have yet to deliver on multiple promises and commitments and if Capmark doesn't think the building is worth $12 million then other lenders aren't likely to take it as collateral either, especially given the track record of the people that would be borrowing the money.

    I suspect this is yet another ruse to delay and stall, which seems to be Milbank's m.o.


    Frankly, I think OKC would be better served by Capmark taking back control and then taking our chances with a new owner who at the very least will have much less up-front investment and thus a better chance of making this project work.
    i hope Capmark takes control and milbank misses the may deadline ....

    then a local developer buys the building for 10-12 mil .. and turns the property around

  5. Default Re: First National Center

    Bye bye, Aaron Yashouafar. My guess is the bank is already negotiating with a company who will take it off their hands.

  6. #456

    Default Re: First National Center

    Quote Originally Posted by BoulderSooner View Post
    i hope Capmark takes control and milbank misses the may deadline ....

    then a local developer buys the building for 10-12 mil .. and turns the property around
    Is First Nat'l worth 10-12 mil to a local developer?

  7. #457

    Default Re: First National Center

    Quote Originally Posted by Skyline View Post
    Is First Nat'l worth 10-12 mil to a local developer?
    i would think so .. the residential possibilities (considering 4 of the 6 city place 1 mil + condo's have sold) and the sq ft of the building ...

    plus just tearing down the city place addition .. would have a great piece of develop-able land that would be worth a bunch

  8. Default Re: First National Center

    Quote Originally Posted by Skyline View Post
    Is First Nat'l worth 10-12 mil to a local developer?
    IIFC, FNC is 1 million square feet, so at $10-$12 per square foot, absolutely.

  9. #459

    Default Re: First National Center

    I also believe that Devon has liens filed against the property for money that was supposed to be paid back when Devon turned thousands of square feet into Class A space. Portions do not need to even be renovated; just get them proper elevator service!

  10. Default Re: First National Center

    With the amount of money being invested in that area, private and public, I can't imagine "the powers that be" are going to let this fiasco continue over a few million bucks.

  11. #461

    Default Re: First National Center

    I'm not sure the FNC would sell for more than $10 million if it came back on the market.

    As has been discussed, parking is a very serious problem; not only was the attached garage sold off separately a long time ago, even with the proposed city garages none would be in close proximity. Regardless of use -- but especially for residential -- this is a big, big problem.

    It's certainly no coincidence that this is the last big property in the CBD that is still adrift. No one has been able to figure out how to make it work.


    The best hope is the bank takes it back and sells to someone in love with the historical features and who can buy it cheap -- maybe closer to $5 million.

    Remember, City Place is still almost half vacant and is considered to be a much nicer building. The have the same parking issue as well.

  12. #462

    Default Re: First National Center

    Quote Originally Posted by Pete View Post
    As has been discussed, parking is a very serious problem; not only was the attached garage sold off separately a long time ago, even with the proposed city garages none would be in close proximity. Regardless of use -- but especially for residential -- this is a big, big problem.

    It's certainly no coincidence that this is the last big property in the CBD that is still adrift. No one has been able to figure out how to make it work.
    Will the streetcar make it more viable?

  13. #463

    Default Re: First National Center

    Quote Originally Posted by KilgoreTrout View Post
    Will the streetcar make it more viable?
    I would hope so but if I was the one considering buying/redeveloping I'm not sure it would make me feel much better.

    I would think that building -- even with the aid of a streetcar system -- would have a very tough time competing with other properties, no matter if the use was office, residential or even hotel. Valet parking could be used for the latter but even then, where the heck are they going to shuttle the cars to?

  14. #464

    Default Re: First National Center

    Quote Originally Posted by KilgoreTrout View Post
    Will the streetcar make it more viable?
    Excellent point KilgoreTrout. Throw in future regional rail to Norman/Edmond/Tinker and rapid rail to Tulsa and there is some serious non-auto mobility.

  15. #465

    Default Re: First National Center

    i agree with Pete. I park in the MainStreet garage connected to FNC and I was told that they cannot accommodate any medium to small groups of monthly parking passes. They are pretty much full!

    The only viable solution is to turn the connecting "newer" structures into a parking facility.
    As discussed on here previously, you can keep the 1st floor level retail, just turn the upper levels (that are not even occupied) into a parking facility. This will NOT be cheap though..

  16. #466

    Default Re: First National Center

    And I believe the nicest space (thanks to improvements by or for Devon) is in the new section, so that would have to be sacrificed in favor of parking.

    But as they say, a rising tide lifts all boats. With the rest of downtown filling up and great development all around, FNC will ultimately benefit if it can find it's way into the hands of the right owner/developer.

  17. #467

    Default Re: First National Center


  18. #468

    Default Re: First National Center

    Interesting:

    An appraisal by J.W. Hoyt & Associates for Yashouafar values the property at $16.5 million. Capmark, meanwhile, provided two separate appraisals by Cushman & Wakefield and CBRE reflecting values of $8.4 million and $8.5 million.

    Read more: http://newsok.com/first-national-own...#ixzz1sIvPWj4m

  19. #469

    Default Re: First National Center

    The fact that the current owners have an appraisal for double Capmarks dual appraisals is a huge red flag to me.

  20. #470

    Default Re: First National Center

    Quote Originally Posted by Skyline View Post
    The fact that the current owners have an appraisal for double Capmarks dual appraisals is a huge red flag to me.
    With flashing lights and a siren.

  21. #471

    Default Re: First National Center

    Interesting that the current owners are willing to pay $12 million to keep this property.

    I doubt they'll be able to come up with it and that it ends up selling for well less than $10 million.


    I know this is a stretch the local developers with the best track record for renovation is the Midtown Renaissance group. If they could get it for the right price perhaps they would be tempted.

  22. #472

    Default Re: First National Center

    Is it possible to expand the MainStreet garage? What about other garages around the city? Perhaps the strain on the MainStreet garage could be eased by increased capacity elsewhere.

  23. #473

    Default Re: First National Center

    That Main Street garage is now privately owned.

    The City is looking at adding parking structures around the perimeter of downtown but none would be very close to FNC.


    If they purchase price is low enough, the owners could replace some of those non-historical buildings in the middle and east sections with a parking structure. I know this has been evaluated in the past.

  24. #474

    Default Re: First National Center

    Quote Originally Posted by Pete View Post
    Interesting that the current owners are willing to pay $12 million to keep this property.
    I know this is a stretch the local developers with the best track record for renovation is the Midtown Renaissance group. If they could get it for the right price perhaps they would be tempted.
    My first reaction to this: "but it isn't mid town". The building just seems out of scope for Midtown Renaissance in location and size.

    What about the guy(s?) that did The Classen Luxury Apartments? Drawing a blank on who that was, but I remember a good reputation and The Classen shows excellent results.

  25. #475

    Default Re: First National Center

    That's the Gardner Tanenbaum group.

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