The good news is that downtown Tulsa's Blue Dome building and three other surrounding edifices are no longer in foreclosure.
The bad news is that they were, and the man who owns them happens to have been entrusted with $1.3 million in taxpayer funds.
Michael Sager, renowned patriarch of downtown development and overall mover-and-shaker, hit a slight bump in the road recently, prompting his friend and long-time (sometimes) business partner David Sharp to file a foreclosure motion.
About eight months ago, Sager borrowed a total of $260,000 from Sharp Mortgage Co., which is owned by David's brother George, and put the Blue Dome and three other buildings up as collateral.
David then bought the mortgages from his brother.
Sager said he borrowed the quarter-million dollars for another project -- the Ridgeway building on 1st Street and Detroit.
"They were going to move to south Tulsa, but we rehabilitated and renovated it so they didn't," he explained.
While Sager was revitalizing the Ridgeway building, though, he defaulted on the funds he borrowed to fuel the project.
Sharp said Sager was seven months past due on his payments on May 10 when he filed the foreclosure motion on the four mortgages.
"Michael's a friend of mine. There were no hard feelings, but business is business," said Sharp.
"I didn't know what else to do. He was seven months late," he added.
Sager also said he harbors no hard feelings against Sharp, but said he was "baffled" and "shocked" by his action.
"In my opinion, Mr. Sharp had every expectation that we would get it resolved and get it paid," he said.
"I had just sold Mr. Sharp a building 60 days ago, and we do business together on a friendly basis, so I was shocked that he did that," Sager recounted.
He added, however, that Sharp "had the full lender's prerogative" to foreclose on the loan.
Sager explained that he defaulted on the loan because of a funding delay on another project.
The amount owed was approximately $18,000, which Sager said another lender had committed to provide for work on a project on a building for Avis Rent A Car.
The delay, he said, was the result of red tape from the federal Environmental Protection Agency.
"We had some delayed closings on some real estate holdings due to a fuel tank removal delay, and lead-based paint," Sager recounted.
Meanwhile, after catching wind of his financial difficulties, former business partner-turned-bitter enemy Steve Kitchell tried to take advantage of the situation, according to Sager.
"Steve Kitchell tried to buy the mortgages and crush me," he said.
Readers might recall Kitchell's recent legal difficulties in the aftermath of the death of one of his nightclub patrons at the hands of a bouncer in his employ.
Sager and Kitchell are currently on opposite sides of another lawsuit over a business arrangement gone sour between the two.
The lawsuit between Sharp and Sager, though, has since been settled, and with lightning-quick efficiency by most standards.
Sager noted that he had resolved the matter with Sharp within eight days of the legal action.
"We never even got to the threshold of having to answer the lawsuit," he said.
Sharp said Sager sold another building to pay off two of the mortgages and to get the other two up-to-date.
Sager insists the episode isn't worth anyone's attention.
"I don't think this is really an issue," he said.
Under most circumstances, a private developer's shifting fortunes and personal financial troubles wouldn't be worthy of any significant media attention, except that Sager is also the custodian of a hefty chunk of taxpayer-provided cash as well.
More than $1 million of Vision 2025 funds have been committed to Sager's care and management to go toward his First Street Lofts project on 310 E. 1st Street.
Vision 2025 spokesman David Arnett said no credit check is performed when decisions are made on which developers are awarded funds.
However, he downplayed any risk involved in entrusting Sager with the $1.3 million.
"Isn't that better than having those funds sit there with nobody doing anything with them at all?" said Arnett, noting that Sager was one of the few bidders for Vision 2025 funds for residential projects.
Rather than a credit check, Arnett said, "proposals are weighted at the time by individuals tasked with making that decision," and that "any business man is going to have a bad mark or two in his history."
Naturally, Sager also dismissed any risk in entrusting public resources to him.
"That (the First Street Lofts project) is a different company entirely, and those are restricted funds, so they can't be spent on anything else," he explained.
Sager also noted that he already invested $150,000 of his own money in the project when he purchased the Jacobs Hotel building in the 1970s, and another $800,000 since then to make improvements.
Also, his Vision 2025 funds are only partially covering the $3 million cost for the building's final renovations.
Even David Sharp still vouches for Sager.
"He's good, he's active, he does a lot for downtown," he said.
"Michael has been incredible for the Blue Dome district. He's energetic, he can whip up excitement -- he's one of the best I've ever seen at whipping up excitement in a little neighborhood like that," added Sharp.
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