"Lakin said the foundation, a tax-exempt public charity, agreed to provide the financing after the Tulsa Stadium Trust did not receive any bids from 27 prospective lenders."
Wow, 27 prospective lenders and not one bid???
I'm largely ignorant on how the mechanism works for this, but in my mind, I'm thinking the bonds must be a real sh!t burger if there was no interest out of 27 lenders.
Actually it appears that the bond offering may have been written in such a way, and with certain restrictions, that may have lent itself only to be of interest to a 'local foundation.'
The Tulsa World reported on Dec 2, 2008:
The trust received responses declining to bid on the financial portion of the project from J.P. Morgan Chase Bank and Wells Nelson & Associates, an Oklahoma-based public finance investment bank.
"While we desire to assist the Tulsa Stadium Trust, there are parts of this proposal that prohibit us," David Page of Chase Bank wrote.
Randall Nelson, executive vice president of Wells Nelson, wrote that because of the current credit market conditions and the risk associated with the proposed stadium financing, "we are unable to submit an offer at this time."
However, Nelson said that should the trust consider alternative financing approaches, the bank would be willing to submit a bid or discuss the options. It was funny that Stan Lybarger, the BOK President heading up the ballpark efforts, pitched the idea that if no traditional lenders were interested in purchasing the ballpark bonds, that the Council should allow a 'local foundation' to purchase them and that in order to do that, the Council should waive the competitive bid process. The request as well as the timing also seemed a little unusual. The proponents of the ballpark could have waited until truly documenting no bids and then ask the council to waive the competitive bid requirement and pitch it to a local foundation but that wasnt done here.
From the Tulsa World: Council set to vote on ballpark bonds (11/19/08)
If no satisfactory bids are received, Lybarger said it would be helpful for the trust to have the ability to negotiate a financial transaction with a local foundation that might be willing to provide funding.
To be able to do that, the council would need to waive the competitive-bidding process, he said.
"But, the clear intent is not to do that," Lybarger said. "We hope to be in the position to accept a bid the comes through the request for proposal process."The other funny thing here is the timing:
Thursday, November 20, 2008 - City Council approves construction bonds to be issued by Trust
Monday, December 1, 2008 - Bond purchase bids are due (9 working days from Council approval)
Friday, December 5, 2008 - Trust approves TCF for bond purchase
Now normally, I think the bond offering has to be published after approval to comply with the Competitve Bid process...but I wonder, if the Competitive Bid requirement was removed by Council, was it printed? And even if so, is 9 days enough time for interested parties to review the bond requirements thoroughly?
The other funny thing that one Tulsa World article stated with regards to the sole bid to construct (and subsequently the bond financing):
Phil Lakin, the construction company's manager, submitted the bid.
Lakin also is executive director of the Tulsa Community Foundation, a tax-exempt, public charity created by George Kaiser and other philanthropists in 1998 to receive, protect and distribute gifts from individuals and organizations for the improvement of Tulsa and eastern Oklahoma. Kaiser is not a foundation board member.
The bid also included a statement that no conflicts of interest exist between the construction company and the stadium trust that would interfere in any way with fair competition in the bid- selection process.
Taking a cue from BetterorWorse up there...how could there not be even the possibility of a conflict of interest given the relationship between donors, foundation, public trust and the principal financial lender BOK - they're all so inter-related?
