Downtown housing misstep?


If we want to see downtown become once again a place that bustles with life from early in the morning until late at night, a place with stores and restaurants, it won't happen until there are more people living in and near downtown. The occasional visits from people going to the arena or attending night classes won't be enough to sustain new businesses. Just as retail followed the rooftops out to the suburbs, retail won't return until the rooftops are there.

One of the more sensible steps the city has taken to revitalize downtown are the efforts to encourage new housing in downtown. You could argue about whether any tax dollars should be spent on this effort -- we'll take that up another time -- but developing homes where people spend a lot of time should be a more cost effective way to revitalize than building big facilities that are only rarely used. In the last several city bond issues and third-penny sales taxes, voters have approved money for encouraging downtown housing development. Here's the description for the $4 million included in the current third-penny sales tax plan.

This project will continue the highly successful 1996 Sales Tax program which has resulted in two public-private developments in the core area. The Uptown Renaissance Apartments at 11th and Denver and the historic rehabilitation of the Tulsa Tribune Building converting it to loft apartments at Archer and Main. This funding will be used to attract additional public-private redevelopment, including sites recommended in the AeCom study area.

But money isn't going to make a difference if it isn't spent strategically, and there's concern that the latest expenditure from this fund is not going to be efficacious. The Tulsa Development Authority has opened negotiations with the owners of the Philtower building for their use of $1 million to convert nine floors (12 through 20) to 12 "loft" apartments.

There were five proposals submitted in response to the TDA's request for proposals. The deadline was May 3. An advisory committee, chaired by TDA board member and appraiser Adam Adwon, discarded three of the proposals for failing to include a required appraisal and then recommended the only remaining proposal, the Philtower project, to the TDA board, even though that proposal seems to fall short in other respects. Three rejected proposals involved rehabbing existing buildings: developing 20 lofts in a mixed retail & residential project at Archer and Detroit in the Brady Village area ("the Archer Lofts"), developing 27 units at Brady and Cincinnati, right next to the new Contemporary Arts Center ("the Tulsa Art Lofts"), and 38 units at 6th & Cincinnati in the old Amoco building ("600 Trinity Tower"). The fourth rejected proposal involved new construction -- I don't have any details on that one.

So what? you ask. By throwing out all but one proposal, the advisory committee didn't bother to compare the merits of the proposals, and didn't bother to evaluate any of the proposals by the criteria listed in the RFP. The fact that one proposal met the minimum criteria for the content of the proposal doesn't mean that the proposal itself is worth spending $1 million on. Observers are concerned that the Philtower plan only involves 12 units -- not much of a boost to downtown's population. The Philtower building is far from any other downtown housing, which means a missed opportunity for synergy. The two Brady Village projects would have contributed toward a critical mass of housing which in turn could encourage more retail development. The City has targeted Brady Village as an arts district, has set up a tax increment district to fund infrastructure improvements, and has already invested financially in the redevelopment of the Tribune Building. We may yet see residential units in office buildings in the central business district, but I think it's more likely to happen once Brady Village fills up and becomes too expensive, encouraging people who want downtown housing to start to look elsewhere. Wouldn't it make sense to focus on one area until it is firmly established?

Critics have also mentioned that the Philtower, unlike the other proposals, is partially occupied with offices and thus has an existing revenue stream that could be used to convert the vacant floors to apartments. (The reason the upper floors are vacant is because the fire marshal mandated fire escape improvements last year which are now complete. Existing tenants were relocated below the 12th floor, leaving the building's tower section empty.)

Was the criterion used to discard the other four proposals a reasonable one? While an appraisal is an important tool for doing due diligence on a conventional real estate transaction, it may not be the right tool for evaluating uncommon types of housing developments. Appraisals are conducted by finding recently-sold properties which are comparable in size, amenities, and location. Tulsa doesn't have many lofts to start with, much less loft buildings that have changed hands. (The units in the Tribune Building are called lofts, but they are really standard apartments, each divided by permanent walls into separate rooms, rather than large spaces that the tenant can redefine and restructure. Exposed ductwork and conduit do not a loft make.) The fact that only one respondent met the criteria should have raised doubts.

The conspiratorially-minded might think the fix is in -- five proposals, four are disqualified, the only one remaining is fast-tracked. I'm not so easily persuaded, but I am concerned that this $1 million that the taxpayers have authorized in hopes of generating downtown revitalization won't have the desired impact if it goes solely to this project. I'd urge the TDA to take another look at this, find out why most proposals did not include an appraisal, and consider reissuing the RFP with an aim for ending up with at least three proposals that meet the minimum criteria.

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This page contains a single entry by Michael Bates published on June 21, 2004 12:05 AM.

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