From the archives: Before Chisholm Creek, a state fair promotion led to decades-long legal battle

The skies stayed clear, temperatures kept to the low 90s, and record crowds were visiting the 1952 State Fair of Oklahoma knowing it wouldn’t be at its historic home much longer.

Promoters bragged the fair easily hit its goal of 400,000 visitors after reporting a disappointing drop in attendance the year before. A few years later, the State Fairgrounds was to move from Eastern Avenue and NE 10 to a brand new futuristic complex at NW 10 and May Avenue. The city was growing and the state fair needed more room to grow with it.

Southern Homes, a Texas company, set up a tent next to the popcorn stand and offered the state fair visitors a deal they couldn’t ignore.

“Buy land” the promoters urged.

Houghton Heights was outside of city limits so there would be no taxes. The promoters also bragged about the “beautiful” location of the future neighborhood at Memorial Road and Western Avenue with “elevated” views.

After advertising Houghton Heights lot sales for much of 1952, Southern Homes tempted fairgoers with a chance to buy lots at between $300 and $600 with down payments as little as $10.

They had 640 lots for sale on the 160 acres. Some lots were offered free of charge if fairgoers agreed to pay for the “paperwork.”

The land was undeveloped, but promoters promised roads, sewer and water utilities were all in the works. More lots were moved through a radio promotion, and more than 400 lots were sold.

Promises were not kept. The land went undeveloped for decades and ended up in litigation throughout the 1980s and much of the 1990s.

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The tale of Houghton Heights continued to take strange twists and turns well into the new century when finally, in 2014, a deal was struck between the two survivors of the yearslong legal battles, Raymond Hefner and Don Karchmer, and long-time real estate broker and investor Dan Ward.

That deal cleared the way for Chisholm Creek, an ambitious 190-acre mixed-use development that is far from complete but already home to apartments, restaurants, shops and attractions. The name Houghton Heights has faded though it still appears on some property records. Those involved can still recite specifics of the ordeal years later.

For Karchmer, Houghton Heights represented 30 years spent on a deal he never intended to pursue, a deal that ended up with a who’s who of the city’s business community, leadership and power brokers. Altogether, a group of disgruntled buyers who bought into the dream at that 1952 state fair sued 39 people.

“It was a joke,” Karchmer said. “You couldn’t find an attorney in town that wasn’t conflicted.”

John Michael Williams, a longtime municipal and property attorney, was among those on all sides who agreed Southern Homes pulled off a scam on hundreds of people.

“You had folks buying these lots that didn’t have any value at all,” Williams said. “It was like the Florida land scandals where they would work out a plat, put out a pretty picture and sell the lots to unsuspecting buyers who didn’t know what was going on. It was a classic scam in Florida in the 1920s. This was much later.”

Houghton Heights

The story didn’t start out this way.

Memorial Road was just coming into existence when Leonard Houghton took a risk in the mid-1940s and purchased 160 acres of prairie far outside of Oklahoma City limits. Houghton was the son of a prominent 89er and civic leader. He was 48 years old and for most of his adult life he had worked aside his father, Henry B. Houghton, who made his fortune in the Oklahoma City oilfield.

Leonard Houghton set up an office in the nearby town of Britton and started advertising residential lots for sale at the corner of Memorial Road and Western — “two and a half miles north of Britton.”

The timing was good with thousands of soldiers returning home from World War II eager to buy homes and start families. Oklahoma City was indeed set to grow north.

Houghton, however, didn’t live long enough to get the development started and in 1951 his estate sold Houghton Heights to the Southern Homes Co.

Leonard Houghton had the tract platted with 160 lots with land reserved for street easements. Southern Homes Co. took those 160 lots and divided them into 640 lots.

After selling about 400 lots at Houghton Heights, Southern Homes quit marketing the property and moved on.

Oklahoma City, meanwhile, was growing rapidly through a series of annexations. The city spanned 29 square miles when Houghton Heights was advertised as being “west of Britton.” By 1960, the surrounding area was taken into Oklahoma City as it grew to 216 square miles.

Being in an incorporated area did not bring city services to Houghton Heights. The aspiring homeowners were left on their own to learn their property was not properly platted. They were told at City Hall the promised utilities and roads would not happen unless they all joined together to pay for those improvements. And when they sought building permits, they were turned away.

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They were stuck with worthless land where even the mineral rights had been sold to different parties including Joseph P. Kennedy, patriarch of the powerful political dynasty that included John, Robert and Teddy Kennedy.

Years passed. Quail Creek, Camelot and other neighborhoods were popping up between Hefner and Memorial. State transportation officials started talking about long-term planning for an “outer loop” highway or turnpike that would go along Memorial Road.

'This land isn't that valuable'

Newcomb Cleveland, a land speculator and developer, was the first to see what was ahead for the area and attempt to straighten out the mess created at the state fair booth.

“He was actually a land man buying up oil rights,” Karchmer said. “He was working on this section of ground, saw the oil rights were owned by others and the land ownership was broken down to these 60 foot lots. And there were hundreds of them.”

And those hundreds wouldn’t be easy to track down as they were scattered over 35 states and living as far away as Mexico City. Some were dead. Some heirs didn’t know they owned the land. Others simply couldn’t be found.

Southern Homes bought the acreage from the Houghton estate for $40,000 and Cleveland reported the company had sold all but 205 of the 650 lots, meaning Southern Homes likely doubled to tripled its investment with the state fair booth and a radio contest held at the same time.

“The fairgrounds just isn’t the proper place to conduct real estate business,” Cleveland said. “About 50 of the lots were abandoned for taxes because no one could use them. Some owners can’t be located. It’s a perfect mess.”

The Oklahoma City Council agreed when in 1979 Cleveland convinced them to declare the property blighted so that it might be acquired through urban renewal eminent domain laws. Cleveland excused Southern Homes’ tactics, explaining the company in 1952 was not violating the law and was using an approach that was widespread during the early 1900s.

Ultimately, Cleveland was only able to acquire about 10 percent of the land with offers averaging $500 per lot.

“Some owners are frustrated,” Cleveland said. ”They’ve held this land for all these years and paid their taxes on it. They need a whipping boy, and now I appear.”

Cleveland said most of the property owners would “set the dogs loose on me” if he attempted to sell them another lot at Houghton Heights for the same price paid at the state fair booth in 1952.

“But when I try to buy it, they want their money back plus taxes, interest and a profit,” Cleveland said. “This land just isn’t that valuable.”

The area around Houghton Heights showed potential with construction of Quail Springs Mall a couple of miles west along Memorial Road. Cleveland hired Tulsa planner Glenn Turner to draw up a blueprint for Houghton Heights development that also anticipated encroachment of the north outer loop highway.

The next steps drew even more controversy. Any urban renewal action would require a fund be set up for acquisition to avoid any expense to taxpayers.

Cleveland bowed out soon after, selling the property to a group of prominent businessmen, bankers and real estate developers. They increased their holdings to 300 lots.

'This is a crazy deal'

The Oklahoma City Urban Renewal Authority signed a contract with the group in 1985 that essentially loaned its power of condemnation to the private investors.

The oil bust hurt the group’s finances and ability to get the acquisitions funded. It was then that Karchmer was approached by an acquaintance familiar with Houghton Heights.

“This is a crazy deal,” Stanfield told Karchmer. “But I think if you could make it work, it will be a great piece of property someday.”

At the time, oilman Raymond Hefner was looking for a real estate deal as a means of diversifying his investments. Karchmer said Hefner approached him and the discussion began about Houghton Heights and the needed $3 million for Urban Renewal acquisition of the remaining lots.

“You have to do it with me,” Hefner told Karchmer. “I don’t know anything about real estate.”

Karchmer responded he didn’t have enough money to do the deal and continue with his other business ventures.

Karchmer did a deal, however, to buy in with $750,000 while Hefner would assume the remainder of the balance needed. The investment group, however, fell into further turmoil.

“Now the economy really hits the fan in 1987,” Karchmer said. “And the five-year note they had comes due. And they can’t pay us.”

To complicate matters even further, a Ponca City attorney filed lawsuits against everyone involved in the Houghton Heights project, including the city council and urban renewal commissioners. This occurred as the first condemnations were being filed and the northern strip of the property was being acquired by the Oklahoma Turnpike Authority for construction of the Kilpatrick Turnpike — the long-planned north outer loop.

"They just came in and took over," complained Marjorie Clarkston, a 70-year-old school cafeteria worker when lawsuits were filed in 1988.

Clarkston said she paid about $450 at the state fair booth. Her initial plan was to build a house until finding out she had been the victim of a land scam. She continued to pay taxes on the property and her plans changed as the area started to develop into a commercial corridor.

"I thought I might put in a nice little boutique out there," she said. "I thought I might sell ladies' gloves, scarves, hats, dressy dresses and a good line of cosmetics."

If not that, Clarkson hoped to make at least $37,000 selling the lot based on nearby comparable sales. Instead, the Urban Renewal Authority condemned her property and offered $2,000.

"I would not accept their money," she said. "It's not right to take your land and not give you a fair price for it."

Everything stopped.

“We all got lawyers,” Karchmer said. “The Urban Renewal Authority couldn’t condemn anything until the lawsuits were resolved. They were at a dead stop for 11 years.”

Karchmer said the Oklahoma Turnpike Authority ultimately paid a settlement with the lot owners’ attorneys. The attorneys, Karchmer said, got most of the money.

“The people got nothing out of it,” Karchmer said.

Condemnations resumed in the mid- to late 1990s and the property was finally marketable. Cabela’s and Top Golf were the first to respond to the marketing push that started in the early 2000s. A Texas group signed a purchase contract with Karchmer and Hefner and they were given the contacts with the two potential anchors.

“We never wanted to develop the property,” Karchmer said. “Raymond and I both felt like we never had the experience or ability to develop a property like that.”

Signs were put up by the Texas group advertising their plans for an ambitious mixed-use development.

“Then the 2008 (economic) debacle hit,” Karchmer said. “Their bank pulled out and they walked out of the deal with several hundred thousand dollars of earnest money they had put up.”

Karchmer and Hefner, now the sole owners of what was left of Houghton Heights after part was carved out for the turnpike, resumed marketing and was approached by Medallion Group, owned by real estate investor Dan Ward.

Ward previously had been approached by the Texas buyers and was aware of their purchase price prior to that deal falling apart, Karchmer said.

“They wanted the price from five years earlier,” Karchmer said. “But the economy was good again. And I was giving them Top Golf, Cabela’s, and at the time, Main Event (which ended up building on the other side of the turnpike).”

Karchmer also had a major anchor awaiting with Costco engaged in talks to buy the corner of Memorial and Western for its first Oklahoma store.

“We really salted the mine,” Karchmer said. “We gave Costco a low-dollar deal. We figured the rest of our acres would be like gold.”

That deal fell apart, however, when Walmart bought land on Interstate 35 for a new Sam’s Club, the top competition for Costco. The deal would place Costco between two Sam’s Clubs.

Karchmer said Costco pulled out telling him the economics had switched to Tulsa being a better first entry over Oklahoma City.

The corner again went into play with St. Anthony Hospital buying it for a new branch. Karchmer contacted Ward and asked if they would pay the same price they had previously offered if the purchase did not include the eight acres purchased by St. Anthony.

A deal was done and Medallion consolidated the former Houghton Heights with other acreage it had purchased west to Pennsylvania Avenue.

Chisholm Creek was born, St. Anthony opened first, Top Golf followed, and Costco ultimately built its second location across the street from the hospital.

Over the past decade, over $300 million has been spent developing about 700,000 square feet of shops and restaurants with public spaces including a lake and fountain.

Whitney Rainbolt, spokeswoman for Medallion, said the development is nearly 100 percent leased. Entertainment anchors include Top Golf and indoor skydiving venue iFly. The 277-unit Argon apartments was the first residential addition to the project.

Much of the development is being patterned from the outside in, with shops and restaurants facing Pennsylvania Avenue, Memorial Road and Western Avenue.

As the economy recovers from the pandemic, future development plans include a hotel on the south end of the restaurants adjoining the lake. Other plans include more multi-family housing, more office, retail and medical anchors.

“It’s a pretty good mix,” Rainbolt said. “Over time it will be a true mixed-use development where you can live, work and play. It seems to be going very well.”

Staff writer Steve Lackmeyer started as a reporter at The Oklahoman in 1990. He covers downtown Oklahoma City, related urban development and economics for The Oklahoman. Contact him at slackmeyer@oklahoman.com. Please support his work and that of other Oklahoman journalists by purchasing a subscription today at subscribe.oklahoman.com.

This article originally appeared on Oklahoman: From the archives: how a state fair promotion led to decades of legal battles