With all the development ensuing (or attempting to ensue) in downtown Tulsa, the city government is also joining in the fun with emerging plans for a new City Hall.
"This is among the many transformational things happening in the City of Tulsa," said Mayor Kathy Taylor last week when she announced that the city has entered into a 90-day option agreement to purchase the Building Formerly Known as the Wiltel Building, a.k.a. the One Technology Center (which is the big, glass building located at the northwest corner of 2nd and Cincinnati, just north of the BOK building in the Tulsa skyline).
She and Don Himelfarb, the city's director of economic development, enumerated various and sundry benefits they believe the move would accomplish.
Himelfarb pointed out that the current City Hall is pretty old and inefficient, and operating out of the new facilities would lower costs as well as improve the city's image.
"The city's pretty much in the Dark Ages with technology," he said, referring to their current digs at 200 Civic Center, built in 1969. "The air conditioning is Third World and the elevators need to be replaced," added Himelfarb.
Existing city buildings would require about $12 million in deferred maintenance, while new construction to accommodate all city offices would cost $82.5 million, he said.
The edifice that might become the new City Hall, however, is nearly brand-spanking-new, having been constructed in 2002 for an estimated cost of more than $200 million.
It's also replete with numerous 21st Century technological bells and whistles, such as abounding LAN connections, Internet cafes on most floors, conference rooms with motorized screens and high-definition video walls and audio/video conferencing capabilities, to list a few.
Moving would also enable the city to consolidate its offices within OTC's 741,737 square feet, Himelfarb said.
The current City Hall has 146,325 square feet, and the city owns or leases another 349,916 square feet in other buildings.
Himelfarb said, according to a "back of the napkin estimate," that the city government could reduce the amount of space it occupies by 30 percent in the new building.
Taylor said it would improve communication between the city's myriad departments.
"Centralization of city departments will improve internal communications while also advancing citizen access to city services," she said.
Without elaborating, they also said maintenance costs in the new building would be "much lower."
Along with all of the immediate benefits the new facilities would apparently bring to the day-to-day operations of the city, the change would also be a shot in the arm for downtown economic development, Taylor and Himelfarb both said.
The mayor touted the plan as "an opportunity to dramatically extend economic development without asking taxpayers for a penny."
"By absorbing OTC, we'll reduce vacancy and will immediately tighten up the real estate market downtown," said Himelfarb.
Also, the buildings currently serving as bases for city operations would be sold and/or leased for retail and commercial development, and City Hall turned into a convention hotel to support the new arena and convention center, they said, thereby adding businesses to be added to the city's tax roles.
"We sit on prime real estate," said Taylor.
Also, the new facilities would also serve as an additional source of revenue for the city since unused floor space would be leased out, they said.
Better Than Buying a New Car
How badly downtown economic development needs that shot in the arm might be indicated by the more than $120 million difference between the OTC building's construction costs of five years ago and the asking price of today.
The marketed price for the building, along with its parking garage and furniture fixtures and equipment, is $80 million, but Himelfarb said the negotiated price is "substantially less."
The more than 60 percent depreciation "is a good indication of the low point the market has hit," he said, noting that he thinks the $80 million is the market low.
However, Himelfarb said it's starting to rebound, and delaying the building purchase might just cost the city a golden opportunity.
"This is a timely and unique opportunity to acquire an asset that is likely to appreciate over time," the mayor concurred.
Himelfarb said he believes the move to the new facilities, with all of its ensuing benefits, might be the spark to ignite the kindling of downtown development, which has long been rumored to be on the horizon but has never quite materialized.
"We think this will tip the scales and be a catalyst for all that stuff," he said.
Himelfarb said the idea to move City Hall to the OTC building was the result of collaboration between numerous people.
"It came from the mayor, myself and a number of citizens," he said. "It's something that made sense to me, so I mentioned it to the mayor and she said somebody else had already mentioned it."
He said the original idea wasn't to buy the building, but just to lease space in it for City Hall, and then someone said, "Why stop with City Hall?" and suggested all city offices be consolidated there.
Like every other announced turning point for downtown development, this too has its hurdles to pass before it will materialize.
The aforementioned benefits were forecast as a result of a preliminary feasibility study.
According to the agreement reached between the City of Tulsa and One Technology Center, LLC (the eponymous owner of the building in question), the city has up to 90 days for a full study to be conducted by a real estate consulting firm with which it is contracting, the Staubach Company, to determine existing city costs for comparison with expenditures at the new facilities, and to evaluate alternatives: stay put in the old building, build new facilities, or move into OTC or some better-suited facilities?
A clause in the agreement allows the city to walk away from the deal if terms are not favorable. Also, the city has not been required to put down an earnest deposit.
"This is an option, not a deal," said Taylor.
"We have a thought pattern, but we're not so married to it that we won't be flexible," said Himelfarb.
The OTC scenario isn't without its potential drawbacks, either, according to the preliminary study, Himelfarb said.
Still yet to be determined are the duplicated occupancy costs (how long those costs would be incurred), the costs of the move itself and the disruption the move would cause to the city's work, to name a few heretofore unanswered questions.
Himelfarb also said that he doesn't expect parking to be a problem at first if City Hall moves to the OTC building, but that it might become an issue later on as space is rented out and the building fills with tenants.
He said the mayor has asked the Tulsa Parking Authority to conduct a study on the matter.
The letter of intent to purchase the OTC building was issued and the due diligence period began last Thursday, March 15, and lasts until June 1, at which point the contract will automatically terminate if it is not executed by that time.
If the study findings are favorable to the plan, the estimated closing date is July 15, and bond issuance for the purchase and the beginning of the move will take place in the summer and fall of this year.
As a part of the city's budgeting process, the Tulsa City Council will eventually have to vote on the proposal.
Himelfarb and Taylor discussed the issue with the majority of the council last week and feedback has been "positive so far, but at this point, we're not asking them to approve anything," he said.
Councilors were not available for immediate comment.
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