The Control Freaks' Squeeze Play

I'm about to tell you a story that made me seethe when I first heard it. If you care about Tulsa, if you want our city, and particularly our downtown, to be a place where resourceful people are welcome to invest their energy, creativity, and money, if cronyism and insider deals make you see red, then this will make you as angry as it made me.

As we reported last week, in a recent survey by Collective Strength, seven out of 10 Tulsans said they were concerned that the City's new Comprehensive Plan will be too influenced by those who have a lot of money.

That same survey revealed concern about a "well intentioned 'oligarchy' [that] is out of touch," a city where "inclusivity is a significant problem," and a "fatalism... about special favors for the wealthy" in the realm of development.

This is a story of how our city officials--specifically Mayor Kathy Taylor and the Tulsa Development Authority (TDA)--handles a situation when a small developer's project gets in the way of the grand plans of the city's biggest business people.

You've been told that $60 million is needed to build a new downtown ballpark. The truth is that nearly half that money will be used by a public trust, controlled by the major donors to the ballpark, to buy up and control the land around the ballpark, using the City's power of condemnation if necessary. That control includes shoving aside developers that were already working with the TDA to develop nearby land.

Let's begin the story by introducing the key players.

Tulsa Development Authority

Like most cities of a certain size, Tulsa has an urban renewal agency, a public trust, supported by city staff, governed by a board appointed by the Mayor and confirmed by the City Council. It was born as the Tulsa Urban Renewal Authority. When "urban renewal" deservedly became a curse word, it was rechristened the Tulsa Development Authority.

TDA acquires distressed and unwanted properties in designated urban renewal zones with the intent of encouraging new and better development. As a public trust, the City's power of eminent domain is available to accomplish TDA's aims.

The Williams Center, Central Park Condominiums, the downtown Doubletree Hotel, the Renaissance Uptown apartments, the Village at Central Park, the University of Tulsa's Reynolds Center and Case Tennis Center, and the OSU-Tulsa campus were all developed on land acquired with the help of TDA.

The Wilkinses

Cecilia Wilkins and her son Will Wilkins are developers and real estate brokers. They have a positive track record of partnering with TDA. Through Will's company, Novus Homes LLC, they have purchased vacant residential lots from TDA, building new homes that fit in with the existing development.

This is what's known as "sensitive infill"--the good kind of infill that reinforces a neighborhood's character rather than undermining it. You can see some of their work in Brady Heights.

Will Wilkins told me, "We want to respect the neighborhood and the characteristics of the surroundings." He says Leon Davis, the City of Tulsa's Director of Real Estate and Economic Development and a key player in this story, drives people by their projects as an example of how to do good infill.

Cecilia Wilkins was also the broker who, through her W3 Development LLC, put together the $1.7 million deal for SJS Hospitality to buy the Atlas Life Building from Kanbar Properties and convert it to a Courtyard by Marriott hotel.

What follows is the Wilkinses account of what happened in their pursuit to develop a piece of TDA property at Archer and Elgin. Their account is backed up by E-mails and TDA meeting minutes and resolutions.

The Timeline

Last year, the Wilkinses were looking for an opportunity to do downtown mixed-use development. TDA had been focused on trying to make a large-scale development happen on the eastern edge of downtown, first with Global Development Partners and later with [the Wal-Mart developer]. The Wilkinses believe that the way to build toward critical mass downtown is to facilitate small, high-quality development projects.

On Dec. 5, they met with Davis, TDA's real estate director. They had been discussing a variety of possible locations, but at that meeting Davis suggested a half-block parcel (42,000 sq. ft.) of TDA land along the west side of Elgin Ave. between Archer and Brady Streets.

It was just across Elgin from a much larger TDA parcel that the Greenwood Chamber of Commerce proposed to develop as a mix of office, retail, brownstone residences, and a hotel. It was a strategic location for an infill project, connecting the Brady Arts District, the Blue Dome District, Greenwood, and the OSU-Tulsa campus.

Later that month, Davis provided the Wilkinses with an appraised value of $460,000 for the property. Armed with that information, the Wilkinses began talking to potential retail tenants and residential buyers and put together a proposal to the TDA.

The Proposal

On Jan. 2, the Wilkinses proposed a four-story building with parking and retail on the first floor and 48 New York-style lofts on the upper three stories. The building would be handled as a co-op with individual ownership interests for sale "to satisfy the published need for affordable residential living downtown, private ownership and much needed development on the East End of Downtown."

On Jan. 10, the TDA board approved a 90-day exclusive negotiation period with Novus Homes LLC and W3 Development LLC, the first step toward a contract to develop the land.

As the Wilkinses began to work with architects on their concept, they were asked by Davis and by Jack Crowley, the adviser to Mayor Kathy Taylor on downtown development, to work with neighboring property owners on some adjustments to their concept.

In a Jan. 23 E-mail, Davis asked them to speak with Perimeter Technology. The data center on the south side of Archer at Elgin was looking to expand.

In an April 4 E-mail, Crowley asked Will Wilkins to work with the owners of the PPG Building on the west half of the same block which had "a very good tenant prospect which will need 35 to 40 spaces. I think that we can jointly work something out which will strengthen both projects."

The Wilkinses were open to both possibilities, but the added complications in accommodating the needs of these other developments meant that 90 days would not be enough time to finish their due diligence.

They alerted TDA staff to their need for a 90-day extension. No problem, they were told.

At the TDA's April 17 meeting, according to the official minutes, Davis stated that the TDA "would not be accepting any other contracts at this time" for the property.

Will Wilkins made a presentation including site information, conceptual floor plans, renderings, and cost estimates. He informed the board that BOK and ONB had expressed interest in financing the project.

Bank of Oklahoma had already asked the Federal Government for a tax credit for participating in the project. A March 25 letter to Cecilia Wilkins from Lisa Albers, Vice President of BOK's Community Development Banking Group said, "The Bank of Oklahoma, N. A., would like to express our interest in your project."

"We would like to continue to work with you as your project unfolds. As you are aware, this particular project was included in the Bank's application to the [U. S. Treasury Department's Community Development Financial Institutions] Fund for an allocation of New Market Tax Credits (NMTC)....

"Thank you for the opportunity to be involved in such an impressive project."

TDA board member George Shahadi proposed an amendment to the requested 90-day extension, and the board granted them even more time, an extension of the exclusive negotiating agreement to Sept. 4.

The resolution approved by the board included this statement:

"The staff of the Tulsa Development Authority is hereby directed to advise Novus Homes, LLC of this action and to proceed with the negotiation of a definitive contract for purchase and redevelopment of the subject property provided the proposed redeveloper can supply satisfactory evidence of an acceptable commercial site plan and the availability of financial resources necessary to said development."

Through the remainder of April and into mid-May, the Wilkinses worked on wrapping up their due diligence. When the banks expressed concern about underground tanks at the old Fuelman station on the south end of the site, the Wilkinses requested information, and on May 16 TDA staffer Hurst Swiggart provided documentation that the tanks had been removed in 2004.

Everything seemed to be coming together for a contract with the TDA to develop the property.

Lucy Pulls the Football Away

On May 21, as the May 30 deadline neared for the City of Tulsa's negotiations with the Drillers for a downtown ballpark location, Cecilia Wilkins got word that the ballpark would be across the street from their loft project and that the ballpark's donors wanted control of all the surrounding land, including the parcel they were trying to develop.

The Wilkinses requested a meeting with Leon Davis, at which they learn that the parcel east of the property they'd been working on, the TDA land under contract to the Greenwood Chamber, was one of three possible locations for the ballpark.

Davis tells them that he has been pushed to cancel the TDA's exclusive negotiating agreement with the Wilkinses by any means necessary, that Mayor Taylor was involved in these discussions, and that it appeared the TDA could not cancel the agreement unilaterally.

On May 30, Will Wilkins called Jack Crowley, who was at his home in Georgia. Crowley said Mayor Taylor was aware of the situation, that there was no need to get upset, and that he was meeting with all the players after his return to Tulsa.

At a June 4 lunch, Crowley told the Wilkinses that their proposed lofts location wasn't needed for the ballpark, but the donors wanted to control everything around the ballpark. Crowley said he was working with the Greenwood Chamber on a land swap, since it was their development site that would be used for the ballpark.

Crowley said he had asked the donors to allow the Wilkinses to proceed. He asked the Wilkinses if they would be interested in another TDA property, such as the half-block across Denver from the arena, a site that had so far attracted no takers. Will told him that they wanted to develop this project, and that no other TDA-owned property was comparable in value.

Crowley emphasized that he was only a messenger and that he would relay their response to Mayor Taylor. He promised to get back with them with a list of other properties.

He never did.

The Squeeze Play

Now six months into pursuing this project, the Wilkinses continued to try to pull it all together. On June 4, they were successful in getting on the June 17 TDA agenda, but on June 14 they learned they had been dropped.

They also requested and were granted a June 17 meeting with Mayor Taylor, which was cancelled on June 16. In acknowledging the cancellation, they said they would press ahead with the project and make a public announcement of their plans, which they did on June 18.

Things came to a head at a July 7 TDA work session. Some members of the TDA board and staff, which had been unanimously supportive and enthusiastic about the project, turned hostile. The Wilkinses were told that they hadn't provided a proposal or a site plan, even though they had presented the information prior to the board's Jan. 10 approval of exclusive negotiating rights and Apr. 17 extension.

One TDA board member, Melvin Gilliam, was perplexed, asking why the board didn't move into a contract with the Wilkinses as they had done for similar developments.

TDA staffer Hurst Swiggart listed the standard set requirements that the board had used for the last 10 years, but his words seemed to go unheard.

Will Wilkins says that board member George Shahadi angrily accused him of demanding special treatment: "Mr. Wilkins, are you expecting us to create another process for you?"

In fact, the board majority seemed to be creating a brand new process on the fly, to the Wilkinses' disadvantage.

Two days later, Leon Davis E-mailed Will Wilkins with a list of 20 items that they must provide to TDA attorney Darven Brown by the Sept. 4 deadline.

The list includes a number of items that they had never seen the TDA request prior to a development contract: "Proposed construction sequencing/phasing.... Preliminary engineering study.... Letter(s) of commitment [from financiers].... Operating pro forma for first 5 years."

Most of these items would be dependent on the completion of construction documents for the project, a process that would involve spending about $400,000 with architects and engineers, too much money to put at risk with no assurance of a contract.

The Wilkinses believe that the TDA board hoped that they would become discouraged and just go away. Instead, they continued to improve their plans, working with their hotel partner on the Atlas Life Building to add a 120-unit suite-style, mid-service hotel to the project.

Council Caves

On July 10, Mayor Taylor used her private jet to fly Councilor David Patrick back from eastern Colorado to vote at that night's City Council meeting on the proposed Ballpark Improvement District, a mandatory assessment that would raise a projected $30 million.

Despite requests by Councilors Bill Martinson, Rick Westcott, and John Eagleton for an additional week to scrutinize the plan and address concerns of downtown property owners, the Council approved the plan by a 6-3 vote.

The Council doesn't seem to have understood what they approved. The total funding for the ballpark totaled $60 million, including $25 million in private donations and $5 million in lease revenues from the Drillers.

But the most recent AA stadium in our region, completed earlier this year, cost only $32 million to build. The 6,500-seat Arvest Ballpark, home to the Northwest Arkansas Naturals, was designed by HOK, the same firm that is slated to design the Drillers' new home.

Evidently the extra $28 million and the trust that was created to manage it will be acquiring all the property around the ballpark. BOK board member Pete Boylan, speaking on behalf of the donors, told a Brady Village property owners meeting that they would use eminent domain if necessary to acquire the property.

By its approval of the ballpark assessment and the trust, the City Council has given a group of individuals which already has immense economic leverage the added superpower of eminent domain.

Last week, the Wilkinses' attorney received a letter from TDA chairman Carl Bracy:

"After further review and conferring with our attorney, Darven Brown, it is my personal feeling that the Tulsa Development Authority should proceed no further in connection with the marketing activities of any of the property in the vicinity of the baseball site location until we have full information concerning the finalized plans adopted by the city. While the Tulsa Development Authority is a separate entity from the city we have always conducted our business in a manner that we consider to be in the city's best interest. That being the case, it would seem to be unwise for the Tulsa Development Authority to proceed further with any negotiations with your client at this time. After all, the city has the right of eminent domain and can take whatever properties become necessary for its municipal purposes.

"Because of the foregoing, I feel that it would be in the best interest of the public and the City of Tulsa to terminate any negotiations and cancel the Resolution now in place. I have asked that this item be placed on the agenda for the regular meeting of the Tulsa Development Authority to be held at 8:30 o'clock a.m., on August 7, at which time you may wish to appear."

The Final Act?

At deadline, the Wilkinses were scheduled to have their twice-cancelled meeting with the Mayor on Monday, Aug. 4. Councilor Westcott has placed them on the Urban and Economic Development Committee agenda for Tuesday, Aug. 5.

Of the five members of the TDA board, at least three have direct ties to the ballpark donors and therefore the appearance of a conflict of interest. Paula Bryant-Ellis, just appointed by Mayor Taylor, is BOK's Senior Vice President of Community Development. George Shahadi is Director of Corporate Real Estate for the Williams Companies. John Clayman is an attorney with Frederic Dorwart's law firm. Dorwart is BOK's attorney and was active in putting together the Drillers downtown ballpark deal.

If all three recuse themselves, as they should, there won't be a quorum to try to shove the Wilkinses aside.

It's understandable that the donors would want to be sure that surrounding development is compatible with the ballpark. The wrong way to do that is to bully and exclude other developers from participating in the process.

The right way is to write an ordinance establishing design standards and a design review process for the Brady Village/Greenwood area--the sort of thing Oklahoma City has done to protect public investment in Bricktown.

Instead of controlling who, we can control what, with a set of rules to be fairly applied to anyone wanting to develop in the area.

Rolling Up the Welcome Mat

We talk about wanting to attract the "Creative Class" to Tulsa. This power-play by the donors tells creative people to get lost: "If you're not one of us, your energy, your money, and your ideas aren't welcome here."

We've seen this before. A group of entrepreneurs created a young professionals organization, ypTULSA, to fill a void in the city's economic development strategy. When the group resisted the Tulsa Metro Chamber's overtures, the Chamber threatened to set up a rival group and to spread the word that it would be unwise to join ypTULSA.

The Chamber carried out its threat, and the overworked small business owners who founded ypTULSA couldn't keep up with corporate giants who could let their salaried employees work on TYPros projects during their working hours.

On Friday, TulsaNow will release its DowntownLive map and guide to entertainment, shopping, and dining in downtown. This grassroots effort, prepared by volunteer canvassers and artists, will help demystify downtown, helping perplexed suburbanites find their way to all that downtown has to offer.

DTU and the Chamber got wind of the DowntownLive activity and began planning to announce their own comprehensive guide to downtown in mid-August, hoping to squelch any speculation that city taxpayers and downtown property owners aren't getting much for their annual public subsidy. It looks like DowntownLive beat them to the punch anyway.

Just as water seeks its own level, creativity moves toward freedom. Around the world, creative and energetic people move away from cultures with rigid social hierarchies and countries with oppressive levels of taxation and regulation. They leave places where their life's work can be seized or destroyed at a bureaucrat's whim. They abandon cities where success is more about your connection to the ruling faction than the quality of your ideas.

When the creative people leave, the toadies, sycophants, and social climbers stay behind, promoting groupthink and stifling innovation.

In the midst of all this turmoil an involved, civic-minded friend asked Will Wilkins if Tulsa was worth it.

We are in big trouble if creative and energetic people like the Wilkinses decide that it isn't.