Can OKC support upscale apartment towers? New arena? Your questions answered

The Oklahoman’s Steve Lackmeyer fielded reader questions during his recent weekly OKC Central Live Chat. Each week, Steve hosts a live chat, giving readers a chance to ask questions about Oklahoma City development and growth as well as an opportunity to ask direct questions of OKC newsmakers like Mayor David Holt and Dan Straughan, the executive director of the Homeless Alliance. You can join Steve most Fridays at 10 a.m. to add your comments and questions about downtown development.

To be able to ask questions and interact with Steve or special guests, you must have a digital subscription to The Oklahoman and you must be logged in. Right now, you can get unlimited digital access to all of our content for $1 for six months.

What if? Were there other ways to integrate Oklahoma City schools?

Q: Good morning Steve, born and raised in OKC, I often wonder what might OKC look like today if, as a community, we could have found the courage to deter white flight and realize the true intent of integration in our public schools. Your thoughts? 

A: Oh yeah. Mistakes were made. Bussing and forced integration didn't work out too well.

If I could go back in time, I would push for a different model. Segregation and Jim Crow dictated "separate but equal" schools, but there was nothing equal in what was provided to white students compared to Black and other minority students.

I would have argued that a better path would have been to outlaw segregation and at the same time require a 3:1 spending and staffing ratio with the goal of making Black schools the best in the district and hopefully enticing white families to seek out those neighborhoods and neighborhood schools to get the best opportunities for their kids.

I'm sure people far more educated about this history might find major flaws in my logic. But I do wonder what if.

Brown's Bakery might return, but not as it is remembered

Q: Many of Brown's Bakery's customers are happy to see that it will continue at a new location. If you could give some advice, what are the top three spots you would recommend for them to relocate? 

A: I know the Brown family has indicated they plan to reopen their bakery at a new location. I would caution everyone to remember this is not a done deal. I'm not certain this will happen. If it does, I suspect it will reopen as a smaller-scale operation in a more suburban location, similar to what we saw with Kamp's Meat Market after the closing of Kamp's Grocery. My guess is it will reopen in Edmond or Nichols Hills.

As for my top three recommended sites... well, honestly, I don't think we can recreate Brown's Bakery we love and remember. If and when it does reopen, it will be a different operation.

How long was a proposed new arena discussed behind the scenes before it was made public?

Q: It is already known the new arena (if approved) would go on the site of the former Cox Convention Center (now Prairie Surf Studios). It is also known that the old arena will be torn down when the new one is completed (not immediately, mind you). My question to you is how long do you think conversations like this happen behind closed doors before the public gets even a sniff about it?

A: Conversations about the timing of seeking a new area and a change in plans for MAPS 4 improvements to Paycom Center go back about two years. The conversation about the potential site for a new arena and the likelihood of building it as the former Cox Convention Center (now Prairie Surf Studios), began last year.

So, in these cases, we're talking about several months on each question.

More: Poll: Will OKC residents support a new NBA arena if Thunder helps to pay for it?

Demolition of former Cox Convention Center will take time

Q: If that happens, when can we expect the demolition of the Cox Convention Center center to begin? Construction timeline? 

A: Let's say the election is held in December.

It will take a while for tax collections to build up if voters approve extending the MAPS 4 tax. We’re still not sure I'm also not sure if this will be a pay-as-you-go model like we do with MAPS and smaller initiatives like Better Streets Safer City. If it's pay-as-you-go, we might be looking at several years before construction starts.

The city could look at doing a revenue bond or line of credit supported by a sales tax if there is a need to complete the arena with fewer delays.

Either way, we're looking at a year of planning and design before a site is chosen (which I fully expect will be the old convention center). Prairie Surf Studios will need time to come up with a new home (a search they've already started). But even with that search, it will take them time to get the move completed.

My guess? Site clearance starts in 2026 or 2027 and construction starts in 2028 or 2029.

Remembering when a garage was contemplated behind former Zio's along Bricktown Canal

Q: It feels like decades ago, there was a plan to enclose and build out the area below the old Zio's. Do you know what happened there? 

A: Yes, it's true that Harding's group looked at building underground parking and a structure above the surface parking lot, which is still owned by the Brewer family. This was and is possible because the Harding group bought air rights to the property.

More than a dozen years, maybe more, have passed since this idea was contemplated. But this was not a cheap endeavor, and it was pretty much scrapped - at least for now.

Former Chelino's building poses threat to Bricktown Canal

Q: The west end of the canal (Old Chelino's and Zio's area) is started to look a little raged these days. I know the Opry will be going in down there, are there any other plans to improve that area that you are aware of?

A: I'm not very worried about the old Zio's. It was a successful anchor for the north end of the Bricktown Canal for about 20 years. It is owned by the group led by Nathaniel Harding, which has done a great job redeveloping the rest of that side of the block, fully filling it up with Oklahoma Craft restaurant and gift store, the Skyline Event Center and The Verge, an entrepreneurial incubator hub.

The old Zio's was recently cleaned up and I'm not too worried about future prospects for the space.

The announcement of the move of the Oklahoma Opry to Bricktown is a big boost for that part of the canal, and their joining with ACM@UCO to use their space as a temporary home while fundraising to renovate 19 E California makes a lot of sense.

I am most worried about the old Chelino's, which was such an important anchor for the district from its earliest days in the 1990s. The building was sold to an owner who announced he was going to open a restaurant and sports bar in the building, and then nothing followed other than broken frozen pipes and what appears to be a serious case of neglect.  This should be a concern to all. One fire and it could get ugly for all of Bricktown.

The city overlooks crumbling streets that are the gateway to downtown

Q: What is something in OKC that you think people focus too much on and something people don't think about enough? 

A: We focus too much on parking (I’ve been guilty of this in the past). We have enough parking for quite a while - we just need to teach people how to best find and use parking, and how to best take advantage of public transportation, including the streetcar.

Our city, by my observation, is ignoring key areas that need the attention of public works and planning.

First, consider NE 5 and NE 6. These are two critical corridors into and out of downtown, and yet the city seems to be purposely avoiding repaving these streets between Broadway and Interstate 235 despite years of potholes and a level of care that might be mistaken for a rarely used county road in an impoverished small rural town. Where is the pride? Where is the care about the impression we make to those first coming into downtown? A simple repaving is not a big deal. We see it all the time throughout the city. Yet on these blocks, we see nothing.

We ignore the need for repaving of streets and the need for streetlights in Farmers Market. Half dead trees and plantings needing a trim at the major I-235 ramps in and out of downtown need some attention. We take care of the big things and ignore the smaller details that can really hurt our image.

Keep an eye on development east of Broadway

Q: What is something you have not reported that you can share with your loyal readers? 

A: We're about to see some much-needed infill in the area of NE 7 to NE 4, Walnut Avenue to the BNSF railway tracks.

Developers Andy Burnett and Jeff Johnson were selected last year by Urban Renewal commissioners to construct a five-story office building on former highway easement on the west side of Interstate 235 between NE 6 and Harrison Avenue and east of Walnut Avenue.

Berry Rock, a real estate company, Oklahoma State Bank, and Comma Insurance will anchor the office building, which also will include a top-floor restaurant and ground-floor coffee shop.

Burnett and Johnson also plan to build two smaller office buildings on the remainder of a “flatiron” block, one that is triangular, carved out from when neighborhoods were designed around a citywide streetcar system in the early 1900s.

Homebuilder Scott Holsey, who recently built a handful of townhomes at NE 7 and Walnut, is about to build the second phase of townhomes facing NE 6 immediately east of the City State restaurant and Parlor.

Developer Jonathan Russell, meanwhile, is selling the old OPUBCO service garages on Walnut between NE 6 and NE 7.

Matt Smith recently informed me he sold the large block that was historically home to Mistletoe Express as part of selling his firm to his employees, a group led by Marc Long. Don't be surprised if they seek to redevelop the site, which is greatly under-utilized and has ample surface parking.

Tax increment financing not totally disappearing anytime soon

Q: At what point do you think OKC will reach when TIF is no longer needed for projects? I like that it is used for projects that would otherwise be deemed lost (First National, Skirvin) but it seems like such a grab bag for developers these days. I know there are a lot of instances where it is very good, but there are others where it just seems like free money. Where is the line in your mind? 

A: The TIF deals we're seeing this year are "carve-outs" from the original downtown TIF, which is set to expire in a couple of years. And I don't believe the political support exists to renew that TIF district. And that's why we're seeing carve-outs for specific projects. And we still have other TIF districts in the Core to Shore area and the Innovation District.

Developers will tell you that TIF deals are far more difficult to nail down compared to prior years. I'm no longer certain where a line might be drawn. I'm listening to both sides of this issue and watching to see whether the city council sticks with the approach taken over the past 20 years.

Boardwalk at Bricktown, if built, will test market for downtown upscale apartments

Q: The price per square foot for the Boardwalk at Bricktown was estimated at $3.14 to $3.24 (not including the non-profit housing). When looking it up, The National is still at about two-thirds capacity on the apartments but at the same price point. Do you think the demand is there for more high-rise expensive apartments? 

A: That's the big question, right?

Scot Matteson is not an unknown entity in the development world. He has a 40-year track record that is well documented, and it shows he can pull off this level of development.

He only has First National as a comp for the apartments. He said he is also looking at other markets, including Houston. Matteson seems to be realistic on the leasing timetable, acknowledging it may be a slow build-up.

Questions remain about developer's intentions with downtown properties

Q: Assuming the Boardwalk at Bricktown is a go, do you think Fred Mazaheri will do anything with the lumberyard across the street anytime soon?

A: I'm not sure. Downtown hotel occupancy is going well. But as we saw with the pandemic, things can go downhill quickly in this age of so much uncertainty.

Mazaheri bought the former lumberyard (located along Oklahoma City Boulevard just south of Harkins Theaters) with plans to work with hotelier Champ Patel to build multiple hotels on the site.

But that plan was put on hold just before the pandemic and Mazaheri successfully got permission from the city earlier this year to use the property for parking. That permission is for three years, and Mazaheri told the city the plan is still to build hotels on the former lumber yard.

This, however, is one of three prominent downtown properties Mazaheri bought with claimed plans for major development that have not materialized in the ensuing years.

Mazaheri has done quite a bit of development along the city's Memorial Road corridor, so we know he can get things built and leased. I just don't know what his thinking is with his downtown investments.

Boardwalk at Bricktown requires record-high tax increment financing request

Q: Thinking about the Boardwalk development … $736 million for three towers, parking (four stories?), 35,000 square feet of restaurant, retail and other common areas. Does this include the hotel or just the apartments? 

A: There are a lot of moving pieces to this project and the numbers have been in flux.

The $736 million development represents the full ambition of the developer, Scot Matteson, which includes three apartment towers and a Hyatt Dream Hotel.

The tax increment financing request, however, is based on the future valuation growth of just the apartments, retail, and garages, not the hotel. Without the hotel, the investment comes in at $576 million.

These figures are almost certain to change as we continue to see changes in interest rates and construction costs. Just a couple of weeks ago I was given $700 million as the total project cost and $550 million as the project cost without the hotel.

Likewise, while the agenda for the initial review showed the TIF request at $200 million, a slide in the development presentation shows it at $202 million. The request was recently approved by the Oklahoma City Economic Development Trust and is next set to be presented to the Oklahoma City Council.

Boardwalk at Bricktown tax increment financing request doesn't include hotel

Q: The TIF (for the Boardwalk at Bricktown) on this seems high until you realize it can't go towards the hotel due to the Omni agreement. If the hotel isn't included in the $736 million, let's say that it is $300 million, we have closer to 20% of the total cost being carried by TIF. That's more palpable to me. Thoughts? 

A: With the numbers provided ($576 million without the hotel), we're looking at a TIF request representing about 35% of the development cost minus the hotel. And that's how we have to look at it because an agreement with the Omni Hotel prohibits any city assistance on nearby hotel development.

If the hotel were to be included in that equation (and it is not allowed), we would be looking at 24%. Either figure is historically high for a TIF request, considering most come in well under 15%.

This is a policy decision about the future use of tax increment financing, how much is too much when it comes to promoting density downtown, and the use of TIF for upscale housing (though there is an intriguing angle of 126 of the 924 apartments being leased to a non-profit that would then operate them as part of a program to help those who are chronically homeless overcome addiction issues, get job training and be transitioned back into the workforce and into permanent housing.

Sometimes we discuss TIF without explaining what it is. So let's get into that before we address this deal further. "Tax increment" refers to the increase in property value that occurs after development. If I have a property valued by the county assessor at $100,000 and after I develop the property it is assessed at $1,100,000, the $1 million increase is the tax increment.

Tax increment financing is allowed in districts created by the city with input from representatives of the other taxing entities - local schools, libraries, the city-county health department, the county and Career Tech.

The length of these districts is typically 20 to 25 years.

Sometimes the developer asks for 100% of the increment to go back into the project. Others seek lower percentages (in this case it was 90%).

Keep in mind a part of every TIF is reserved to go back to the taxing entities to use toward projects that otherwise might not be possible through traditional funding. Examples include the OCCC extension in Capitol Hill and funding toward the new Oklahoma City Public Schools administration building.

The payout for the developer can vary as well. Sometimes the increment payments are used to support bonds taken out to fund infrastructure improvements. Other times the payments go in early to support complicated financing for a project, as happened with First National.

Typically the city is very hesitant to do a deal that might risk money going out without there being some way to claw that funding back if the developer doesn't perform.

In this case, it's among the lower-risk deals where it acts as a rebate; the developer won't receive any money without the project being completed and payments have already been made to the county assessor.

Much still unknown about design of proposed Bricktown towers

Q: What, if any, pushback from a design perspective, specifically talking about street interaction, do you think there will be?

A: The developer of the Boardwalk at Bricktown has indicated he plans to respect the city's height limit for the area, which as I recall means the building's won't exceed 345 feet. This would make the towers the tallest by far in Bricktown, where we've seen most buildings top out at between 100 and 150 feet tall.

If this were in the old part of Bricktown, between Reno Avenue, Main Street, the BNSF railway viaduct and Lincoln Boulevard, this height would be problematic.

But this project is in Lower Bricktown, which didn't exist until 20 years ago. It has a different design mix and this height aligns with the nearby Omni Hotel and the planned eight-story Boulevard Place apartments at E.K. Gaylord and Oklahoma City Boulevard.

These will be more modern in appearance, but we only know at this point the site layout and a tentative scale and shape of the buildings. This is also an Urban Renewal property, so they too will have input on design. We're in a whole new game with this project and honestly, I'll be very interested in seeing how this proceeds.

This article originally appeared on Oklahoman: Your OKC questions on Bricktown, proposed NBA arena answered