Oklahoma City Strawberry Fields developer under securities investigation

Strawberry Fields developer Pat Salame is prohibited from selling securities for six months and is ordered to reimburse early investors amid a state investigation into property transactions between Salame and her company.

Representatives of the Oklahoma Securities Department told The Oklahoman on Monday an investigation is ongoing into Salame’s oversight of Strawberry Fields, a proposed development west of Scissortail Park.

They declined further comment, but a securities investigation report shows Salame used $55,000 in funding from Strawberry Fields investors on May 15, 2015, to purchase property for herself that she then sold to Strawberry Fields on May 31, 2016, for $412,000.

The report was included in a court filing last week by investors suing Salame. The investors allege the purchase of Salame’s property at SW 5 and Dewey Avenue was funded through 412 membership units sold at $1,000 each.

Salame said the concerns raised by securities investigators arose from documents she provided and were resolved in a compromise agreement. She said she discovered she had “inadvertently” co-mingled personal funds and company funds with respect to the one Strawberry Fields parcel. She said she immediately repaid the money.

“The most important thing is that the agreement with the (securities department) has no effect on Strawberry Fields, LLC., or its ability to move forward with the development,” Salame said in a statement provided to The Oklahoman.

Findings from Securities Department investigation into Strawberry Fields are 'the tip of the iceberg,' investor says

Rick McCormick, a former college basketball coach and one of the early investors, told The Oklahoman the Securities Department investigation findings are “the tip of the iceberg.”

“We felt there were irregularities, some things being done that are illegal, and we asked that they (securities investigators) look into this. And this part of the result.”

Salame started buying and clearing properties in Strawberry Fields, formerly the Orndale addition, in 2014 and has since assembled more than 50 acres in the area between Scissortail Park, Shartel Avenue and Oklahoma City Boulevard.

A group of 23 investors, more than half of them representing three families, sued Salame alleging they were refused an accounting of the project and requested a judge remove her as head of the development.

“These are family and friends who gave the first $1.5 million into this project,” McCormick said. “Some of these people put their last savings into it. Some have died the past eight years. Some are elderly with compromised medical situations and can’t afford medicine.”

After hearing year after year that “something big” was about happen, McCormick said investors asked to see records for Strawberry Fields and to find out its actual holdings.

“She would cancel meetings,” McCormick said. “Some people drove here and she refused to meet with them. Everyone signed a notarized letter asking that this group of people be able to review records. It was totally ignored. Nobody wanted to seek out an attorney and start litigation.”

In prior comments to The Oklahoman, Salame denied the allegations, saying her accounting firm, Hogan Taylor, sends quarterly financial reports to investors via secured email. She also said she invites the investors to look at the books in person.

The plaintiffs represented by attorney Tony Gould account for 6.4% of investors in Strawberry Fields, Salame said. The lead investor, Richard Anderson, who owns 35.8%, confirmed the receipt of the quarterly reports and defended Salame’s oversight of the development.

A history of delays for Strawberry Fields development in OKC

The development has gone through a series of delays in which Salame has continued to acquire and clear properties without starting any construction. She applied for $16 million in tax increment financing assistance in August 2022 with an overall project investment estimated at $1.5 billion.

Cathy O’Connor, a consultant on the project at the time of the request, said the first phase of construction would start in 2023 with four projects:

• The Lucy, a $24.7 million 54,500-square-foot office building to be built at SW 3 and Walker Avenue.

• The Marketplace, restoration of a two-story building built in 1940 that will be a mix of retail and entertainment.

• The Abbey, a $61.3 million, 266-unit apartment complex at SW 6 and Lee Avenue that will include 20% of units as workforce housing.

• A 10-unit condominium complex at SW 6 and Dewey Avenue. 

Construction has yet to begin, and no building permits have been filed with the city. The tax increment financing request was initially recommended by a review committee but stalled as investors pressed their claims against Salame.

“We negotiated for quite some time with Strawberry Fields, but there were a couple of contract terms we weren’t able to agree on,” said Joanna McSpadden, the city’s economic development programs manager. “We ceased negotiations. They are able to come back and ask for funding for individual projects as they come online. But the infrastructure request is not going forward.”

McCormick said he was attracted to the development after seeing plans for the convention center, streetcar and Scissortail Park to be built within walking distance of Strawberry Fields.

“Unless changes are made, this could go on for another eight years,” McCormick said. “It’s important for the city to see progress and that this project move forward.”

This article originally appeared on Oklahoman: Strawberry Fields OKC developer under securities investigation