OG&E Energy Center

[Spartan]

As my memory recalls, OG&E was going to do a new building many moons ago, late 80's or early 90's possibly, don't recall, but it never materialized. I've seen the programming documents and renderings......no idea why it never happened. Clayco was in way over their head on the initial proposal for this development.

Clayco is bigger than you realize.. Or you just don't know Clayco. Lol

[Pete]

Clayco is big but is primarily a builder with architectural services as opposed to a developer.

[Spartan]

Yes they have a bank of investors normally. Would be nice if OKC invested in itself (the TIF).

It's really not that different than most developers who rarely use their own equity anyway.

I just want to point out that at $550 M this is a bigger project than Devon, which came in way under budget. This is an opportunity to get a non oil player to do a project every bit as big as Devon, and we have likely squandered it. It is mind blowing, truly. In true OKC fashion we have snatched defeat from the jaws of victory bc we expect developers to act the same as a Fortune 500 oil corp.

OKC may not be destined for greatness, and never mind diversification.

[hoya]

As nice as the ClayCo renderings are, and as much as I'd like to see them get built exactly as described, the money they asked for was so outrageous that it's just not worth it. That TIF money could be better used elsewhere.

[bchris02]

As nice as the ClayCo renderings are, and as much as I'd like to see them get built exactly as described, the money they asked for was so outrageous that it's just not worth it. That TIF money could be better used elsewhere.

Like across the street, to fund parking beneath the tower. That battle has already been lost though.

[Stickman]

With the price of oil, a lot of battles will be lost.

[Spartan]

As nice as the ClayCo renderings are, and as much as I'd like to see them get built exactly as described, the money they asked for was so outrageous that it's just not worth it. That TIF money could be better used elsewhere.

When people object to the dollar AMT of the TIF request (the $63M or whatever) are they suggesting there should be a cap on it, and if so how should that work? Are people's objections to this accounting for the SCALE of this compared to a MidtownR deal on 10th Street? I'd also like to point out that all of those projects mostly had historic tax credits (20+10/20% equity from state + federal HTC), which combined w TIF is a hefty development subsidy. Hefty or not though, it was the right amount to deliver the right project for OKC. I am so glad those weren't held back by this kind of small thinking.

I'd also like to point out that high-rise living doesn't even really compete w the Deep Deuce low-rises bc it's just such a different product. The product is more the view and vibe than the space or even the neighborhood. It's just a different niche, truly. We need an array of niches in order to actually maximize the capacity for downtown/urban living, and this small thinking just isn't getting it done. OKC is thousands of units behind where it should be according to its own demand analysis via a vis that outdated market study (I'm willing to bet urban living demand hasn't shrunk).

TIF has been used for all developments as gap financing. How is that not consistent with what Clayco needs? They are requesting a potentially appropriate amount of gap financing...for a high-rise development.

[Pete]

TIF is supposed to be for *blighted* areas and problematic properties that have special challenges, like huge utility line relocation (Steelyard) or historic renovation issues (like 21c, which is also in a blighted area).

This particular property is perfectly clear, rectangular, one of the primo spots in all of downtown and sits on a giant public park completely funded with hundreds of millions of tax dollars and surrounded by hundreds of millions more of TIF work in the form of Project 180, John Rex Elementary and tons of other public projects.

TIF is to jump-start troubled areas and help challenged properties be reworked, not to be corporate welfare to rich developers and tenants.


And keep in mind, when you give one developer TIF for a very straight-forward development, you are putting at disadvantage all the other competing developments that are already built or will be built. At what point do you let the free market work it's magic?? We should have passed that point a very long time ago as we now contemplating a 4th MAPS program.


If this type of development can't be done without public assistance (and of course it can, as has been proven several times) at this point in time, when can it ever?

Time to get developers off the public teet, apart from very unique circumstances.

[Spartan]

Did you read any of my post? Just curious, because it's not worth it to keep talking past eachother. We have our positions. But I just explained how precedent has gotten us to this point (you yourself have even defended it as gap financing before) and how this project is a unique project with unique needs and a unique market that it appeals to. OKC needs more projects that expand the market rather than drill deeper down into the preexisting market. It's the Apple business model of selling the product you didn't know you needed until you saw it. It's called vision.

You can fight a moral fight about the free market and keeping developers off the public teet, but when it comes to OKC are urbs are at a nearly insurmountable disadvantage compared to the burbs that receive nearly all of our systematic public investment. When downtown gets a crumb of public investment it's a "special project" with a "special project manager" to ensure we screw it up.

Rather than fighting a moral battle for the free market, which is great and all, why isn't there a LITTLE more concern for filling the HOLE we now have? Since naming it Lake Lackmeyer is totally unfair albeit funny and catchy (the poor guy gave far more coverage to efforts to save it than ANYONE and he deserves our appreciation for his responsible reporting), perhaps Libertarian Lake is more fitting? Free Market Marsh? Development Principles Pond?

Regardless of what we call it and how we articulate development principles, all I see is a failed deal.

[Pete]

This is the essence of the problem with TIF...

Every developer comes along and holds their development hostage claiming they can't do it without public assistance. And in this case (like most others) they demolish a historic structure, spend tons of time and money on PR and pretty pictures then long after the fact slip in they need tens of millions to develop the property.

It's simple blackmail and it defies logic and all civic and business sense.

Yet, the masses have already been baited with these cool renderings and people clamor just to give them millions.


It has to stop somewhere otherwise it's this endless cycle of subsidy and we should be way, way past that now. Billions of public money have already been invested downtown.

[hoya]

ClayCo proposes 4 towers, each around 25 stories. 2 office towers, 2 residential towers. These are on land that they got for a song, next to a major public park. There are no issues with utilities needing to be moved. There are no issues with site contamination. This land is perfect. It's across the street from the tallest building in the state, and the entire area has just been renovated. Private developments are taking place all around them, including another tower being built directly across the street. Oh yeah, and they've got one tenant lined up who will completely fill one of the corporate towers.

And ClayCo still can't get this done? Hell, for as much money as they're asking, you could give me that money and I'll build the thing. How much of a sweetheart deal do you have to give someone?

If it really requires that much public financing, then OKC doesn't need 4 more towers. If that is really the case, then we should ask ClayCo to scale down their towers, maybe build something really nice in the 8 - 12 story range, and be happy with what our market can truly support. Now... I don't really believe that that is all OKC can support. I don't think you do either, Spartan. I think we'd fill up those four towers pretty quickly. ClayCo may not have the financing in place, but that doesn't mean we should just give them lots of public money.

[Pete]

People also need to keep in mind that at this point all they are proposing is the one office tower and parking garage. They want separate TIF funds for that, then want TIF funds *IF* they build further.

Giving them a bunch of money to build the OG&E building and huge parking structure provides zero guarantee they'll ever do anything further.

[bchris02]

People also need to keep in mind that at this point all they are proposing is the one office tower and parking garage. They want separate TIF funds for that, then want TIF funds *IF* they build further.

Giving them a bunch of money to build the OG&E building and huge parking structure provides zero guarantee they'll ever do anything further.

This is what really stinks about this entire deal. Why do they need such a large TIF for the main OG&E HQ? They already have a tenant. I can understand there being some reservations now in the face of low oil prices but at the time this was proposed, there should have been absolutely no question of whether or not the market could support a 25 story tower especially being that it already had an anchor tenant. I can understand needing a TIF for the second spec tower and especially the high-rise residential.

[Spartan]

Pete and Hoya and others - I'm right there with you on the same page that Downtown OKC should be an extremely attractive investment locale. However for some reason it isn't getting the deal done, and we need to ask WHY? I think we need to stop focusing on these isolated issues (where often we disagree over what the issue is, for instance you see a subsidy, while I see a massive hole where a landmark once stood) and pan out to the full view. What is happening across the entire downtown landscape?

After you get past the reality of OKC's dominant suburban landscape, the issue comes to land assembly. We have an urban renewal kinda downtown. With our public sector actors as the biggest culprit, specifically the convention center project, in my mind. That CC project alone has set its sights on just about every big valuable plot of land, thus creating illusory competition, and drastically inflating land values through smoke and mirrors. Furthermore, OCURA's wrecking ball has been even worse for small-time property owners than for historic architecture, which is saying a LOT. We have used our vehicles of land assembly to really put a lid on the kind of private mixed-use development that could be possible. Which is insane considering we use that private mixed-use development as a barometer of our own success, not that we aren't complacent enough in this town that that's an issue.

We have a lot of sites that should be attractive for investment, and one public sector actor or another (whether it be OCURA, ODOT, crappy design review boards, economic development funds like "Medical Business District Inc." etc) have all done a truly marvelous job of ensuring that said investment just doesn't flow. I am absolutely not one of these "get da gubment out da way" shills, but it's kind of true in a way, speaking from my own experience back east.

All that said, I can agree that there are a lot of things that went wrong here. However Clayco itself isn't the issue, but could rather have been part of the solution. For one their subsidy request shouldn't be a surprise to anyone who expected a "big-time" project there, which I think we all did. I know Clayco from some projects in Ohio and I know that they do good development work, but I could give or take them as far as this site goes. I just don't want to see the same kind of parking lot that used to span the block where Devon Energy Center now sits (despite fond memories of parking there to watch the 4th of July fireworks as a kid). A site which, by the way, was cleared by the public sector for another one of these "big-time" deals with a notorious developer who was promising a done deal (Carozza).

[David]

How about Lake "Let's carefully add the red tape after the site is cleared but before anything is built in replacement"?

[gopokes88]

People also need to keep in mind that at this point all they are proposing is the one office tower and parking garage. They want separate TIF funds for that, then want TIF funds *IF* they build further.

Giving them a bunch of money to build the OG&E building and huge parking structure provides zero guarantee they'll ever do anything further.

Give them 0 for OGE and parking garage. If they want some money to be the trendsetter for high rise condos that's a little more reasonable. It's hard to get financing when there are 0 comps in the market. So helping getting the first 2 built might be worth the public's money.

[bchris02]

Give them 0 for OGE and parking garage. If they want some money to be the trendsetter for high rise condos that's a little more reasonable. It's hard to get financing when there are 0 comps in the market. So helping getting the first 2 built might be worth the public's money.

Agree with this.

[Just the facts]

I am going to break my posting rule on this thread (sorry Rover) and clear this issue up. Spartan's point is that suburban OKC is way past the point where private money should have taken over as well, but it doesn't stop the city from giving millions to outlet malls and sporting goods retailers and spending billions more on roads in the far flung reaches of the southern plains, so if they can do it on Memorial Rd why can't they do it on Sheridan? Maybe Clayco/OG&E should suggest moving the project to Edmond. It worked for Sandridge.

[Pete]

The lack of forward movement has absolutely nothing to do with downtown vs. suburbia or lack of development inertia in the central core.

It has to do with this all being a ruse for OG&E from the outset and they can't step forward and really take care of this deal due to the negative PR.

If this property came on the open market there would be a line of developers looking to snatch it up but that never did really happen.


If you are looking to place blame, aim at Rainey Williams. He bought the property and promised a "world class development". That was long before Clayco got involved or there was even a hint of a big TIF request.

The property is still being held by Williams. It's his responsibility to deliver on the promises he made when we was awarded the right to develop by the foundation that sold Stage Center.

[zookeeper]

The lack of forward movement has absolutely nothing to do with downtown vs. suburbia or lack of development inertia in the central core.

It has to do with this all being a ruse for OG&E from the outset and they can't step forward and really take care of this deal due to the negative PR.

If this property came on the open market there would be a line of developers looking to snatch it up but that never did really happen.


If you are looking to place blame, aim at Rainey Williams. He bought the property and promised a "world class development". That was long before Clayco got involved or there was even a hint of a big TIF request.

The property is still being held by Williams. It's his responsibility to deliver on the promises he made when we was awarded the right to develop by the foundation that sold Stage Center.

Where's the 'like' when you really need it? Well said, Pete.

[Pete]

This is what Rainey Williams said after getting approval to demolish Stage Center:

“We look forward to getting started with what we promised to build, which is a world-class headquarters for OG&E,” said Williams.

Committee approves demolition of one of OKC?s most unique buildings | KFOR.com


He used the term "world class" multiple times in the press and again, this was long before Clayco became officially involved.

That quote was also from 1 year and 7 months ago and all we have to show for the repeated promises is a demolished Stage Center, a huge stagnant pond and evidently no forward momentum at all.

[soonerwilliam]

It seems to me that it's about time for Rainey to make some type of public statement regarding the OG&E Tower and the rest of the project.

[catcherinthewry]

all we have to show for the repeated promises is a demolished Stage Center, a huge stagnant pond

To be fair to Rainey, that's an improvement over SC.

[Spartan]

Give them 0 for OGE and parking garage. If they want some money to be the trendsetter for high rise condos that's a little more reasonable. It's hard to get financing when there are 0 comps in the market. So helping getting the first 2 built might be worth the public's money.

I also agree with this.

[Urbanized]

I'd only like to point out that the term is not "teet", but rather "teat."