City Haul

Tulsa officials may have stopped short last week of describing a proposed deal by a local group to purchase the former City Hall complex on the west side of downtown as a classic case of addition by subtraction. But it was clear from their reaction that if the sale goes through, it will rid city government of what was increasingly being viewed as an albatross.

Mayor Dewey Bartlett Jr. announced at a March 10 press conference at the new City Hall at One Technology Place that a local partnership known as Brickhugger LLC had submitted an offer of $1 million for the old City Hall building, the accompanying Francis Campbell City Council Chamber and a 400-space parking facility. The group plans to convert the structures into a 200-room hotel and restaurant.

"They will take it as is, no contingencies," Bartlett said. "We are having the opportunity to sell the property as it appears today."

Bartlett said he would recommend to the City Council that it transfer responsibility for the property to the Tulsa Industrial Authority, which will be empowered to strike a deal with Brickhugger.

"I think we could take care of this within a couple of weeks, really," the mayor said.

As business-like as they tried to be, with the prospect of unexpectedly having a $1 million infusion of cash during a time when the city continues to struggle to balance its budget, city officials who gathered for the press conference -- Bartlett, economic development director Mike Bunney and several city councilors -- could hardly contain their glee at the thought of being rid of a declining property that the city has been trying to unload for some time.

Bartlett put particular emphasis on the fact that utility costs alone for the former City Hall in 2009 ran a little less than $600,000 -- for a building that was abandoned in 2008 when municipal government moved to its new home on the east side of downtown. He estimated the city's annual savings in utility, maintenance and other costs at close to $1 million a year if the sale is completed.

The prospect of avoiding those costs for a pair of buildings from which the city derives no benefit was apparently enough to convince city officials to jump at the Brickhugger offer, despite the fact that Bunney said the most recent appraisal done of the property in 2007 placed its worth at more than $6 million.

But Bartlett recalled that a prolonged effort to market the properties through a Chicago-based real estate firm and a request for proposals seeking bids on the property last year yielded no responses.

"We received zero, none at all, there was no interest in it at all at that point," the mayor said.

District 2 City Councilor Rick Westcott said the fact that no other developer had stepped up with a proposal for the properties was an indication of their true worth.

"One of my concerns as a city councilor was, what is the market value of the building and are the citizens of Tulsa receiving a fair price for the building," he said. "And in the last year and a half or two years, no one stepped up to the plate to buy the building and make any offer.

"So right now, it looks like a million dollars is what the market offers on the building," he said. "I'm very happy that the citizens of Tulsa are going to see development in that area. We've been waiting for it for quite a while."

Bunney said the Brickhugger offer caught him by surprise.

"I did not have any inkling," he said. "Basically, they asked if they could send us a letter, and I said we'd be glad to receive it. (The offer) came this week."

Bunney downplayed the idea that the city was simply better off without the building.

"I think it's more a case of people starting to recognize the momentum is starting to achieve with the BOK Center and the ballpark," he said. "We really do have a lot of projects starting to happen downtown, and that's directly attributable to Vision 2025."

He believes the new hotel project, along with the approval of the OnePlace mixed-use project by the Tulsa Development Authority that also came last week, will trigger more development on the west side of downtown, something city officials hoped would happen with the opening of the BOK Center.

"I think it's very important," he said, adding that he has spoken to a number of real estate professionals who have targeted the Denver Avenue corridor for development in the future. "With the City Hall sale, it will expedite development of the Denver corridor."

Bartlett pointed out the city will realize other benefits from the sale.

"I think it will also increase the value of property in the immediate area," Bartlett said. "The city of Tulsa still owns property adjacent to this, so it will increase in value. So who knows what opportunities that might give us, as well."

He said the $1 million generated by the sale of the property will give the city a little breathing room as it continues to deal with the fallout from declining sales tax revenue. But he cautioned against any expectations that the money would result in any recently laid-off city employees returning to work.

"This is not money that we're going to turn around and hire a whole bunch of people," he said. "I don't think that would be a very prudent use of the money. But it would be an existing amount of money that could be used for a capital item that would be very beneficial to the city of Tulsa."

As for the property itself, Bunney said the former City Hall building is structurally sound and essentially has sat empty for much of the past two years after its furnishings were auctioned off. He said he wasn't aware of any significant problems with the building, though City Councilor John Eagleton has described it in the past as "mold infested." And Macy Snyder, vice president of Brickhuggers LLC, said she was aware the building had some mold issues in an interview after the press conference.

But that was not a concern to her group, she said, because Brickhuggers plans to gut the building.

The Snyder family is widely known in Tulsa for its recently completed renovation of the historic Mayo Hotel, now known as the Mayo Hotel and Residences. Snyder said her family had kept its eye on the former City Hall site since the city abandoned it but was too busy completing the Mayo project to put in a bid on it last year.

"It's kind of hard not to when you see it every day looking out of the Mayo," she said. "It's something we've been thinking about. No one else has stepped up to the plate, and we're willing to, so we want to see something happen to that building."

Brickhugger plans a $30 million renovation of the properties, she said, and has begun negotiations with a couple of hotel chains with which it might be associated. But other than the restaurant, her group hasn't begun to consider what kind of amenities the hotel might offer. She did say the building would be used entirely as a hotel and that there would be no residential aspect to it, as was the case with the Mayo.

She said Brickhuggers would employ the same architectural firm that was used on the Mayo in an attempt to speed up the renovation process, which was estimated at 18 months to two years, once the design phase is complete.

"There's always hurdles when renovating a building ... but we kind of did I think the hardest project you could ever do, which was the Mayo," she said. "So we've kind of conquered that."