The Tulsa Forum by TulsaNow

[the Ross Group took over this project in 2016 and progress appears to be advancing]

The First Street Lofts are a project that was controlled by a developer who owns/owned much of the Blue Dome district property.  He acquired an interest in the building at 310. E. 1st around 1977. He received $1,300,000 in government loan money from Vision 2025 in 2006 or 2007.  The basic terms of the loan are this:  

You get $1.3 million to redo a vacant or underused building into quality  residential housing.  We will loan you this money interest free for 10 years.  In exchange, Tulsa gets quality housing, an increase tax base, and a growing pedestrian friendly downtown.  Also, we will not make our loan a first priority and you can get other financing that could undermine our interest in your property.  

The $1.3 interest free for 10 years will cost the government about $500,000 in interest.  It saves the developer much more than that as their borrowing costs would be higher. The City/County are probably exposed if he defaults.  What makes this work is that it allows development that improves the area and increases the tax base at a much more rapid pace – AND provides seed money for future projects.

Unfortunately, if a project doesn't run smoothly it ruins the concept.  The project is not generating tax revenue. Not adding life or synergy.  And the government is exposed to risk from any default.

It was originally scheduled to be completed in 2007 or 2008.  Then it was bumped to 2009.  In 2011 it was almost done.  In 2012 completion was 2013.  Now we will be done in 2015.  

BUT, there was an economic downturn.  There were redesigns.  Unexpected work.  Red tape.  OK, those are all true.  Those are all true of most major building project.  Since 2007 here is a list of projects that have been completed:

BOK Center.  OneOK Field.  Mayo Hotel.  420 Mayo Building.  Detroit Lofts.  Old City Hall converted to an A-Loft.  Empty building into Albert G’s.  The MET was made into Rib Crib.  A couple empty buildings became Fleet Feet and Lee’s Bicycle.  The Rusty Crane.  Hampton Inn was constructed.  Tribune Lofts II.  Cimarex Tower.  Guthrie Green.  Woody Guthrie Center.  Philbrook Art had a satellite center open.  TU Opened an art center in the Brady.  Gilcrease had an addition and a renovation done.  New apartments behind Renaissance downtown.  New apartments across from the ballpark.  St. Francis added an entire childrens hospital.  St. John’s added their Broken Arrow hospital.  I-44 was started and is nearly finished.  I-244 had one new bridge completed.  The entire development at Tulsa Hills.  The Indian Store opened next to Dwelling spaces.  Joe Momma’s.  The Max.  Dilly Deli.  The Dust Bowl.  Fassler Hall.  Back Alley BBQ opened, closed, and was replaced by White Flag.  Burn Co opened and moved to the 18th and Boston.  IN Oklahoma City Devon tower was conceived, designed, announced, and built to 50 floors, with construction starting in October of 2009 and ending in October of 2012. It took three years to build the Trump International Tower in Chicago, 98 stories, 2.6 million square feet, and a billion dollars.

I hope we REALLY learned a lesson.  Vision 2025 administration needs to have criteria set to hit the goals.  There needs to be transparency on where the public money has been spent.  There needs to be rules that it cannot be used to increase the planned compensation for the developer. The City/County needs to be a truly secured party.  The goal was to have a project developed quickly to add to the tax base and the synergy – even if the developer gets the project done this time, the “quickly” part of that equation failed miserably.   I'm not being (too) critical of the V2025 oversight on this project because it has NOT defaulted and is technically still in compliance, but we need to learn from it and strengthen the compliance in the future to show ACTUAL progress.

The recent Tulsa World Headline sure was reassuring.  Unfortunately, the World articles almost always are.  Let’s review the news articles…

1/15/2006
Lofty ambitions for downtown landmarks:
. . .
First Street Lofts  
http://www.tulsaworld.com/archives/builders-focus-vision/article_6703749e-7736-5389-a56d-5e9fafe25248.html (http://www.tulsaworld.com/archives/builders-focus-vision/article_6703749e-7736-5389-a56d-5e9fafe25248.html)

310 E. First St.
Funds requested: $1,574,315
Total project cost: $2,824,315
Developer: Blue Dome Properties LLC
The proposal: A residential loft building that would be marketed as "creative spaces for creative people."
Sixteen units would range in size from 678 to 1,883 square feet and rent for between $700 to $2,100 per month.
The bottom two floors would be commercial space.


3/10/2006
Vision money funds lofts
Four downtown buildings will be renovated to hold residential units.
http://www.tulsaworld.com/archives/vision-money-funds-lofts/article_c6804a82-3aa7-5304-adb4-8852d92a1a25.html (http://www.tulsaworld.com/archives/vision-money-funds-lofts/article_c6804a82-3aa7-5304-adb4-8852d92a1a25.html)

More than 160 residential units will be created in four downtown buildings with the help of $10 million in Vision 2025 funds, Mayor Bill LaFortune announced Thursday.
The sites include the historic Mayo Hotel, 115 W. Fifth St.; Mayo Building, 424 S. Main St.; and Transok Building, 2 W. Sixth St.; and a building in the Blue Dome District at 310 E. First St.
. . .
First Street Lofts: Developer Michael Sager through Blue Dome Properties LLC requested nearly $1.6 million but will receive between $1.2 million and $1.3 million.
Sager said there is enough funding to move ahead with the full 16-unit proposal.
The lofts will be marketed as "creative spaces for creative people" and range from 678 to 1,883 square feet and rent for between $700 to $2,100 per month.
The bottom two floors will be commercial space.
The total project cost is estimated at $2.8 million.

03/21/2007
Vision 2025 residential construction breaks ground
http://www.tulsaworld.com/archives/vision-residential-construction-breaks-ground/article_1b85054c-1366-56e7-8d9a-ce4eefc23fc5.html (http://www.tulsaworld.com/archives/vision-residential-construction-breaks-ground/article_1b85054c-1366-56e7-8d9a-ce4eefc23fc5.html)
Construction began Wednesday on the first Vision 2025 residential project.
The First Street Lofts in the old Jacobs Hotel at 301 E. First St. will include 19 units ranging from 650 to 2,000 square feet and will rent for about $1 per square foot.


3/22/2007
Downtown building being converted into lofts
http://www.tulsaworld.com/archives/downtown-building-being-converted-into-lofts/article_731479bc-3a1f-59a6-b01b-b20f1a31aad9.html (http://www.tulsaworld.com/archives/downtown-building-being-converted-into-lofts/article_731479bc-3a1f-59a6-b01b-b20f1a31aad9.html)
The project, which began Wednesday, is partially funded with Vision 2025 money.
Construction of the first Vision 2025 downtown residential project began Wednesday with a jackhammer's boring into the concrete floor as city leaders covered their ears."This project has been a dream of mine for 30 years, and now it's coming true," said Michael Sager, the developer who bought the former Jacobs Hotel at 310 E. First St. in 1977.

3/23/2007
Lofty plan
Downtown housing projects under way
Tulsa's much-desired revitalization got a big boost Wednesday with the "floor-breaking" ceremony for the planned First Street Lofts, to be located in the old Jacobs Hotel at 310 E. First St. A jackhammer was used to begin the restoration project in the five-story structure, built in 1916.The lofts are the first of four residential projects that are to receive interest-free loans from $10 million generated by the Vision 2025 sales-tax program. Tulsa developer and building owner Michael Sager, who has been active in downtown redevelopment, said the project has been a dream of his for 30 years. "I would never have been able to get this project off the ground without the Vision 2025 money," he said. "It's just too risky for the banks." Sager will receive $1.3 million from sales-tax proceeds. The total estimated cost of the project is $3 million. Under the Vision 2025 residential development initiative, developers are required to pay back the money loaned to them, so that repaid funds can go toward other future projects.
http://www.tulsaworld.com/archives/lofty-plan/article_e9d23aff-03e6-5f7f-a618-a3eeefef53c5.html (http://www.tulsaworld.com/archives/lofty-plan/article_e9d23aff-03e6-5f7f-a618-a3eeefef53c5.html)

4/19/2008
Lofts project gets going
http://www.tulsaworld.com/business/realestate/lofts-project-gets-going/article_5b8dde26-a19c-5a9a-b96a-d7debdd2da49.html (http://www.tulsaworld.com/business/realestate/lofts-project-gets-going/article_5b8dde26-a19c-5a9a-b96a-d7debdd2da49.html)

Michael Sager's plans to convert the former Jacobs Hotel into lofts and retail space have moved a lot more slowly than the developer expected.
But conversion work for the First Street Lofts is finally under way in earnest — a gigantic hole punched into the west side makes that clear.
"We're putting in a 16-foot-high glass wall," Sager said. "It'll overlook some of the best of the Tulsa skyline."
Sager said administrative matters slowed the development of the building at 310 E. First St. after a ceremonial jackhammer ceremony was held in March 2007. But the red tape has been cleared and workers are expected to finish the first loft by fall, with the residential side of the project completely done within a year.


11/16/2009
Downtown residential projects (more) eye Vision funds
http://www.tulsaworld.com/news/government/downtown-residential-projects-eye-vision-funds/article_61cc2814-e9a0-5812-b142-619ad0a0c242.html (http://www.tulsaworld.com/news/government/downtown-residential-projects-eye-vision-funds/article_61cc2814-e9a0-5812-b142-619ad0a0c242.html)
Four downtown residential projects are vying for $769,000 in Vision 2025 funds that will be awarded as a no-interest, 10-year loan. . .
First Street Lofts: Developer Michael Sager through Blue Dome Properties LLC.
Sager requested the full amount, which he said would complete the project that will ultimately have 18 residential units, of which 12 are single-level units and six multi-level units. There also will be a rooftop deck with a view of ONEOK Field.

11/29/2009
Coming along
Ball park, restaurants, lofts: Downtown progress continues
http://www.tulsaworld.com/opinion/mikejones/coming-along/article_d91df6ae-5ebb-5eb3-8595-980f8d6a5144.html (http://www.tulsaworld.com/opinion/mikejones/coming-along/article_d91df6ae-5ebb-5eb3-8595-980f8d6a5144.html)

KJRH.com story from 12/21/2011 being VERY critical of Sager:
http://www.kjrh.com/news/local-news/2news-takes-a-closer-look-at-an-unfinished-vision-2025-housing-project (http://www.kjrh.com/news/local-news/2news-takes-a-closer-look-at-an-unfinished-vision-2025-housing-project)
His reasoning? Despite the taxpayer seed funds, sufficient money wasn't readily available, contract negotiations took too long, and the real estate collapse halted construction.
"There are many projects that have taken years past the time of getting started," says Sager. "The fact is we are durable and we are still here."
The group in charge of handing over the $1.3 million of Vision 2025 money, the Tulsa Development Authority, has given Sager five extensions on the project, including one granted in October of this year.
"With the downturn in the economy and construction prices, we just wanted to have a little patience with him," says O.C. Walker, Executive Director for the Tulsa Development Authority.
. . .
"I'd like for them to give a good excuse on why that's not done," says Cullen. "It didn't appear to me or my clients that any of it was being spent for that building."
2NEWS poured through thousands of documents, including draw reports submitted by Sager to the TDA showing what he spent money on--little of which matched the original proposal.
$30, 975 was budgeted for construction management and administration. Michael and Patricia Sager are listed as construction manager and administrator, but more that double was paid out to them, according to the draw reports: $83,000. Plus, $46,065 was paid out to others listed as construction managers.
2NEWS : "That's quadruple the amount he intended on using for himself. Was that a red flag?"
Walker ( TDA): "It certainly was."
Walker admits there were several red flags.
. . .
Sager believes, despite setbacks, First Street Lofts will open as early as Spring of 2012.
He recently redesigned the project, adding more units for a more affordable price for renters. "Believe it or not, it's alive and well,"



2/13/2012
Tulsa could lose $1.3 million due to Blue Dome project delay
http://www.tulsaworld.com/news/government/tulsa-could-lose-million-due-to-blue-dome-project-delay/image_125c3e8d-6651-5cfa-ab56-676a82503880.html (http://www.tulsaworld.com/news/government/tulsa-could-lose-million-due-to-blue-dome-project-delay/image_125c3e8d-6651-5cfa-ab56-676a82503880.html)
Developer Michael Sager is pictured in front of the First Street Lofts at 301 E. First St. After several contract extensions, the project, once estimated to cost $3 million, remains unfinished and faces a possible foreclosure action. Project costs have increased to roughly $5 million.

2/17/2012
Stalled Downtown Development Moving Forward
http://www.ktul.com/story/16963653/stalled-downtown-development-moving-forward (http://www.ktul.com/story/16963653/stalled-downtown-development-moving-forward)
Sager says Tulsans  won't be sorry they invested in him.  The 23 units building with 32 parking spaces, also has three businesses on the ground floor...they're already leased.  The city says that's good for everyone.  The project is now slated for completion on February 13, 2013.  Sager says he'll be ready.

05/15/2014
Tulsa's First Street Lofts, funded by taxpayers' dollars, still not complete eight years later
http://www.kjrh.com/news/local-news/tulsas-first-street-lofts-funded-by-taxpayers-dollars-still-not-complete-eight-years-later (http://www.kjrh.com/news/local-news/tulsas-first-street-lofts-funded-by-taxpayers-dollars-still-not-complete-eight-years-later)
"I don't feel guilty," said Sager. "We've continued to hold the course and we're still here to finish."

But Sager told 2NEWS the same thing in 2011 .

"Believe it or not it's alive and well," said Sager back then.

He said something similar in 2012 .

"Things are looking very up," said Sager two years ago.


5/22/2014
Q & A: Michael Sager a driving force in downtown resurgence
http://www.tulsaworld.com/homepagelatest/q-a-michael-sager-a-driving-force-in-downtown-resurgence/article_04160ce8-2453-5777-b5e9-4fe2a1b172a1.html (http://www.tulsaworld.com/homepagelatest/q-a-michael-sager-a-driving-force-in-downtown-resurgence/article_04160ce8-2453-5777-b5e9-4fe2a1b172a1.html)
. . .For more than three decades Sager has been one of the driving forces behind the resurgence of downtown, especially in the Blue Dome District. That resurgence did not come quickly or easily.. .  
Sager has sold the Blue Dome Building and said he is concentrating his efforts on the First Street Lofts.
“We’ll have 23 lofts for lease, from 780 to 2,000 square feet,” he said. “I wanted all different sizes because I want this to be a neighborhood, and downtown is the core of the city.”


07/31/2014
Work starting again on downtown First Street Lofts
http://m.tulsaworld.com/businesshomepage1/work-starting-again-on-downtown-first-street-lofts/article_28172494-5c1c-539c-ac17-50a030758b0d.html?mode=jqm (http://m.tulsaworld.com/businesshomepage1/work-starting-again-on-downtown-first-street-lofts/article_28172494-5c1c-539c-ac17-50a030758b0d.html?mode=jqm)
Work on the long-anticipated First Street Lofts in the Blue Dome District is set to start again, said downtown developer Michael Sager.
 
Sager and his real estate group Blue Dome Properties LLC have started work after years of delay on the apartment portion of the former Jacobs Hotel site at 310 E. First St. with plans to offer the project for bids in the coming weeks.
“We have been working for three to four months to revise all of our construction plans for completion,” Sager said.
With the new plans, Sager said construction could start in the next 60 days, with 180 days of scheduled construction. That timeline would put the completion of the project sometime in the early spring of 2015 with apartment leasing to start shortly after.


6/14/2014
Downtown living options continue to multiply but may not be keeping pace with demand
Great news... According to the Tulsa World Sager will be working on the First Street Lofts soon...
http://www.tulsaworld.com/business/realestate/downtown-living-options-continue-to-multiply-but-may-not-be/article_f3397515-63b1-5c4b-ad4d-ae612fd7e565.html

7/9/2015
Work starting again on downtown First Street Lofts
http://www.tulsaworld.com/businesshomepage1/work-starting-again-on-downtown-first-street-lofts/article_28172494-5c1c-539c-ac17-50a030758b0d.html

7/10/2015
After nine years, 1st Street Lofts see rapid completion
http://www.kjrh.com/news/local-news/investigations/after-nine-years-1st-street-lofts-to-see-rapid-completion

The irony about your “red tape” comment is Sager is frequently consulted on other construction projects because he knows how to navigate the red tape which is inherent in rehabbing old buildings in the CBD. 

Sager can be so FOS, it’s unreal.

Eight years.

Maybe the workers only have one hammer to share.

My favorite quote from this week's article.


Or maybe it's because you don't want a bunch of future tenants bugging you next year when there hasn't been any progress on the loft you promised them would be complete.

My favorite quote in the latest article was that he started in 2007 and was going to do residential first,  but there was a high demand for retail so he did that first..... in 2012.

You should that the latest article indicates he has changed the plans since May with, "He is now planning for 23 units on the property, ranging from 700 to 1,100 square feet. The old plans called for units up to 2,000 square feet."

What a mess. At least the bottom floor is occupied.

FIFY

I was walking by yesterday and glanced over.

Anyone know of any changes?  Updates?  Lawsuits?  Pending arrests?

I assume we have like three months until the next excuse article.

WARNING!!! UNSUBSTANSIATED ANECDOTAL STATEMENT FOLLOWS - THERE ARE NO FACTS INHERENT IN THE WORDS YOU ARE ABOUT TO READ


I think Whiskey Business is struggling, they are not stocking their shelves anymore and the cashier mentioned that they don't have money to replace stock right now. If they fail that leaves only S&Js active in this building. The space east of S&J seems to be filling up but only with more and more junk.

In most places that means:
I always thought having a liquor store was a license to print money.  Shame they can’t make a go of it, maybe they were a few years too early.

It's an odd location since no one (today) lives in the Blue Dome district.

I shope at Whiskey Business.  Was there just last week.  I would hate to see it go out.

Haven’t been in almost a year.  They would call me when a limited release would come in, but to be honest, it was a whole lot easier to run up to Parkhill’s, park, run in, and be back on my way.

Great idea.  Bad location.  If Sager had the lofts upstairs it would change their location...  But, we could say a lot things would be different if Sager had his lofts done.

Whiskey Business has a competitor with seemingly much more traffic at 11th and Elgin.

Also much $pendier

I haven't been in there in a long time, but that place was more Mad Dog 20-20 Business than Whisky Business.

New place, across the street. Modern Spirits.
(https://fbcdn-sphotos-d-a.akamaihd.net/hphotos-ak-xpf1/v/t1.0-9/10891546_752062834881176_4939913173207983408_n.jpg?oh=9192916c79c3b660dceacc4a01a4ad25&oe=55592EAC&__gda__=1428816838_bffc73463c0578fcf5af5ffd5653077a)

That is not the store I was thinking of.

I'll admit to using Modern Spirits more in the last six months than Whiskey Business even though I drive within a block of Whiskey Business to get to Modern Spirits.  Or, I'll make a pass and if there is no parking along 1st St, I head to Modern Spirit.

I haven't been in there for a while.  Are they (Modern Spirits) still planning on taking the space next to them for a beer room expansion?

That’s the one near the overpass.  Became a bike shop and frequent vandalism target.  It’s been vacant now something like two years.  Still seems to be a sketchy location for any business.

Yeah, that was it. I really wish someone would buy up Gunboat Park and restore all those apartment buildings. It could be really great area.

That area is ripe for gentrification and you could put a bodega in the old liquor store location.  With the proximity to the CBD, that makes so much sense.

There's been some crossfit stuff going on in that building from time to time over the last year or so.  Gunboat Park would be a perfect redevelopment project with really neat old apartments to fix up. 

I also have been going to Modern Spirits instead of Whisky Business, mainly because it's easier on my way out of downtown.  Whisky Business really needs more residents downtown to be successful.  Say, a bunch of young people living above them, but that's just crazy talk. 

 ::)

I know of three different groups that have tried to do something with Gunboat Park.  The biggest issue is getting enough of the property that you can do something meaningful.  Having the industrial buildings on the north side make it harder.

Do you know if the Price’s have any interest in selling their buildings?  Some of the industrial/warehouse could be great loft projects.

From Facebook.  Looks like they'll fight on.  I'll try to support them better.

So inventory goes with the business.  So it wouldn't make sense to sell and then buy more inventory.

I'm hopeful.  I buy from them as I leave work.  I've had to go elsewhere as the inventory has not been there.

Not if they are selling down to avoid tax on inventory or attempting to liquidate to pay off other creditors/investors.

Whiskey Business seems like a good idea and the location could work for many people. I think it is just too expensive plus it is inconvenient to go there if you don't live downtown. Every time I went there, it was $1-$2 more for a six pack or bomber. I would still go there to support it though. But after Modern Spirits opened on 11th & Elgin, I had no reason to go to Whiskey Business. Modern Spirits is the liquor store downtown needed: Large selection and reasonable prices (for the most part - they price-gouged Prairie's new 12oz to $15 each!).

I wouldn’t pay $15 for 12 oz. of fairy dust, must less a beer.  My wife was given one of the Guiness “limited edition” beers for Christmas by a friend in a 750ml bottle.  We later saw it in a liquor store and could not believe the price: $35.  It’s beer, not a single malt scotch or a nice bourbon.

I almost picked up the latest Willows release, but didn’t want to swing $15 for a bomber.  Being a home brewer, I appreciate the cost involved in big beers as well as the cost of used barrels, but somehow Marshall’s has managed to do those at about $10 per bomber and turned out some really great ones.

So I look out of my building windows and see the Sager building sitting dead while a new building on 1st and a new building on 3rd are both moving forward very nicely.

It's a shame to see the public's money getting thrown away like this.

The saddest part is the location and building couldn't be better. It's in middle of everything in a great old building. Putting lofts in there is a complete no-brainer. So it takes an idiot to mess it all up.

BOOM!

What baffles me is why someone with the capacity to do so hasn't taken it over or forced it to be taken over.  Surely the city has some recourse that those with clout could get the city to move forward on.  Baffling.

Would that be up to the city or the V-2025 managing authority to foreclose?  If it was 2025 funding, I’m not sure what lever the city has as long as everything is up to code and it’s not fallen into being a nuisance.  

What is completely incomprehensible, is it has been close to (if not over) a year nearly 1 1/2 years since the Armstrongs bought the Blue Dome/Arnies and Woody’s buildings.  That should have made Sager quite flush unless he had to turn around and pay his never-ending list of creditors.  Reported sales price was $1.5mm.

He’s been a risky bet dating all the way back to when he owned and ran Karmichaels +/- 25 years ago.

Separated at birth?  You decide:

(http://tulsagrad.ou.edu/csdc/_CSDC_NOVO_Imagens/creativity/Sager.jpg)

(http://imageserver.moviepilot.com/penguin-008-gotham-s-penguin-what-danny-devito-thinks-of-robin-lord-taylor.jpeg?width=460&height=276)

TDA is who the developers contracted and maintains an enforceable position.

It’s astounding to consider the number of downtown developments that have gone from idea to completion since this project started.  TDA either failed to negotiate itself sufficient enforcement rights and real deadlines or it’s failed to use whatever rights it has to ensure that this project was timely completed.  Either way, TDA has breached its duty to the citizens of Tulsa (not like that’s a new thing).

He bought the triangle building with part of the money I believe.  $550,000

Why haven't they enforced their position?  Are these documents publicly view able for a citizen to read the position the TDA holds?

It is interesting that PMG's monthly report on Vision 2025 indicates the downtown Tulsa housing assistance program is complete.  I guess spending the money is complete...just not the project.

The real question is will the Vision 2025 tax expire before Mr. Sager finishes and opens the nineteen units he promised.  Eighteen or so months away?

“TDA” and “timely” are rarely used in the same sentence.  ;)

I recall that TDA did extended the loan conditions (required project completion date) to Mr. Sager on at least one occasion, beyond that I can't speak to the condition of any TDA loan.

From the perspective of Vision 2025, the funding agreement to the CITY/TDA has been fulfilled.  The funds were made available to TDA who made loans to various developers therefore the loan program from our perspective is complete.

Remember, this funding to the City was a one-time deal from Vision 2025 to the City to administer.  However; TDA established that their program would be implemented as loans rather than grants (I can still hear the grumbling over that one) and at least initially they did set it in motion to continue to use these funds as a short-term, no-interest revolving loan program when re-paid which I personally think is an excellent approach.

I'm sorry, but our files for this fund have been archived or I would easily be able to provide more information on the origional terms and repayment times...  

This is the part that really bugs me, if these were repaid they could be issued to another project and keep the ball rolling. He is keeping 1.3M out of the residential development equation and that is not a small impact.

No to be defending any project but I don't believe any of the loans from this go-around been repaid at this point.

I thought ARG re-paid their loans and took out another?  Or, was that on the previous round of downtown housing loans?

If you're talking about the Tribune Lofts? that was a previous package.

Great news... According to the Tulsa World Sager will be working on the First Street Lofts soon...
http://www.tulsaworld.com/business/realestate/downtown-living-options-continue-to-multiply-but-may-not-be/article_f3397515-63b1-5c4b-ad4d-ae612fd7e565.html

Well, it has to he true or they would print it (again and again).

Time to update the recap.

The Frontier needs to do a story on Sager and his finances.  

Frontier is made up of writers and editor who were on staff when the World wrote the other stories.

They won't be writing a scathing Camille's story either.

Yeah, what a joke.

So it's been 10 years, and I believe it was supposed to be a ten year, $1.3 million interest free loan (thanks taxpayers!) to be repaid at the end of the period.

Is the TDA involved in this in some way?  What's the auditing process?  When he defaults on the loan, who gets to foreclose on his properties?  Presumably it was a loan and not a $1.3 million gift, right?  So, who's representing the taxpayer interests on this?

I walk by 10 times a week.  I'll let you know when it all begins.

“We’ve already got 180 people on our waiting list,” she said. “It’s a snowball effect. The more we build, the more demand there is.” - Beverly Raines | Harrington Lofts

Let that sink in for a moment.

We are in the best market for multifamily construction and financing in the HISTORY of real estate.

We are in the biggest demand period for downtown Tulsa real estate since suburbanization started.

Yet somehow he can't find financing to finish this project? All while he is spending millions to buy other downtown and pearl district properties.

He was quoted in the Journal Record a few weeks ago about this project that said he is still trying to find financing and hopes to have it in 6 months to begin construction but would likely be later than that.  I'm not kidding. I'll see if I can find that later this evening. This guy is a joke, and somehow gets credit for the revitalization of downtown so many times  ??? ??? He's a hamper to downtown development by blocking $1.5 million in housing funds from going back to someone else. This project is not difficult to find financing for, and the financing markets (especially for multifamily) have been great since 2012.

Yes, TDA is the administrator of this and the other loans made with Vision2025 proceeds.

Sager's PR team deserves a raise.  Oh, wait, the Tulsa World is his PR team.....

Correction, he can't find MORE financing for this project. Not a single tenant and he already owes millions.

There's no reason he can't find more financing either.

He's leasing ~6,500 sq. ft. on the first floor for most likely $22.00 NNN (that area's market rate).

He has a $1.3 million interest free loan - 10 year term (or is it longer?) = $130,000 per year

He is having $143,000 per year of income from those retail spaces.

He probably took a $200,000-300,000 "developer fee" and "project manager fee" too. So essentially ripped off tax payers and pocketed a few hundred thousand dollars. Then nets $13,000 a year from the retail spaces and then a full $143,000 when the loan is paid off. Then get's credit for being the Downtown savior while he's ripping tax payers off!!

What a F-ing joke.  >:(

He could easily go to a bank and get financing to complete the multifamily buildout.

Since this was tax payer money and TDA administered the loan is there anyway to file to have the loan information made public? I assume there was some sort of business plan he had to submit. Why were these loans not administered like a private construction loan where they could only draw from the funds when materials and supplies were being bought? If there was, there should be some sort of record of what he paid himself to "manage" the project. Where's the follow through (checks/balances) for this money?

This is what I've heard

1. the TDA loan isn't the only loan
2. He was pulling six figures per year as a developer fee
3. His rent rate is closer to $12 than $22.

Because: Sager - "the savior of downtown".

There is no doubt there is a lot of cash in the marketplace for real estate and in particular multi-family.  That said, financing a project that's been stalled for ten years isn't just walk into a bank and walkout with your cash.  Given the public perception of the project I would guess a lot of local banks would be extra diligent in their underwriting of the project.  Good bankers consider the reputation risk of their projects as well.  Also, the vast majority of deals that are getting done have strong equity in the deal usually via cash injection up front and guarantors that have strong liquidity or cash flow not dependent upon the deal.

[argh, I started posting an update to the record and messed up the original post...sorry]

Few real estate deals work at these numbers.  Rates on CRE are now down in the high-3's to mid-4's depending on the project, the guarantors and the lender.  National lenders tend to be cheaper but pickier, the local banks will stretch on a deal but demand a higher rate.

Um... both Sager and the TDA are incompetent...?

At a recent City Council committee meeting I was asked about the status of any incomplete Vision projects and I mentioned the Down Town Housing loan program's one, as yet uncompleted, project.  This generated into discussion about recourse and future use etc., which were both beyond the agenda and my purview so Councilor Ewing suggested and others agreed that they needed to and would be inviting TDA to a future Council committee meeting in order to discuss issues and the programs future.

Kirby

Good to know.  Hoping this starts a course of positive action with the building.

The Sagers' sold 311 E 2nd st S, the one Yokozuna/Dwelling Spaces/Tallgrass is in for 2.7 million in April.  According to the Tulsa County Assessor site.  Loft Money?  Fingers crossed

Don’t get your hopes too high.

Sager sold Arnie’s/Blue Dome/Woody’s properties in ’12 or ’13 for $1.2 mil and it resulted in nothing on the loft project.

One of those things is not like the other...

KJRH Story http://www.kjrh.com/news/local-news/investigations/after-nine-years-1st-street-lofts-to-see-rapid-completion (http://www.kjrh.com/news/local-news/investigations/after-nine-years-1st-street-lofts-to-see-rapid-completion)

Ross Group pitching in? huh.

Yeah it was a poorly written story.  Is Ross Group just donating money to the project?  I did appreciate how they called out Sager for his inability to perform a bit.  I just wish they had provided more details on the progress of the project.

While I'm pleased to see the story...

I had heard a rumor that he had an investor/debtor that was going to take the project out of Sager's hands. Wonder if that is what happened.

The Ross Group is a construction company, so they can do a lot more than just add money. This is very encouraging.

Soooo, how's this whole thing with the Ross Group going?  I'm not seeing much on the outside.

::shakes magic 8 ball::

My sources indicate construction will begin shortly and is expected to be completed in some diminish length of time that has no basis in reality.

/I have no sources

Anyone have any updates?

Nothing much has changed that I've seen except for a couple of broken out windows boarded up and some re-applications of tarps over the sky-lights.

(http://cdn.meme.am/instances/500x/53263765.jpg)

In the meantime, Ross Group is now looking at projects in Bartlesville.  Wait? What?  Squirrel!!!

The last news story I saw said it would be completed in the fall of 2015.
http://www.kjrh.com/news/local-news/investigations/after-nine-years-1st-street-lofts-to-see-rapid-completion

I think we are about due for a Tulsa World article on how great the progress is and how we can expect progress real soon. I'm pretty sure the loan comes due in 2016...

You know, I bet the deal to build these lofts was negotiated using the most popular phone at the time:
(http://www.katalogmobilu.cz/files/mobily/st1/127/800x600_cs_CZ/1330685482-motorola-razr-v3-247.jpg)

Maybe watching Miley Sirus on Disney in 2006?

(http://www.mrpopculture.com/thereport/wp-content/uploads/2013/07/Miley-Cyrus-2006.jpg)

Maybe they made an announcement on this brand new startup that let you post short snippets on the internet:
(http://www.uwosh.edu/ruralschools/images/Twitter-Logo.png)

That was before Bing was a thing. Or before Michael Jackson announced a comeback. Justin Timberlake was Bringing Sexy Back. The new One World Trade Center tower was still finishing the foundations.  In 2006 most people didn't know what BluRay was. Kids that were starting the 1st grade when this deal was made, will certainly be starting on varsity high school teams by the time it is finished.

There has actually been four new countries created in the time it took to remodel this building (Kosovo, south Sudan, Serbia and Montenegro). One of them might collapse before it is done. Seriously, this means that nations would have literally risen and fallen in the time it took to create First Street Lofts with public funds.

But, but...he started the whole downtown rebirth with Blue Dome didn't he? We'll name streets after him in a few decades.

Well, he had the vision to buy (with mamma's money) some old buildings, and was smart enough not to tear them down.  Overall, I would say the rebirth happened because of the tenants who leased the buildings and started businesses there, not so much because of the landlord.  But I will give him credit for not demolishing anything.  Even when some of those buildings became roofless, three-sided shells, he held onto them. Those roofless shells are now profitable businesses that are thriving downtown. </end of positive things I can think of to say>

Kudos sir.  Best thing I've read on here in a while.

(https://krismcgarvey.files.wordpress.com/2015/03/squirrel.jpg)

Ross Group officially announced their BVille plans. (http://www.tulsaworld.com/business/realestate/historic-downtown-bartlesville-property-to-be-developed-as-lofts/article_c9b60936-219b-5cdf-94c9-5d8971398ac3.html?_dc=311276246560.7375)

Four buildings built around 1907. $2mil in additional renovation work. Four retail spaces and 11 apartments. 14,000 square feet that will be receiving tax incentives. Plans are being finalized.

Taking bets on which project is finished first, the one Sager started in 2005/6 and partnered with the Ross Group in 2015. Or the one the Ross Group is starting in 2015/6.

From a recent discussion, I understand the necessary transfer documents have been forwarded to the Mayor's for approval.

Transferring the buildings ownership to the Ross Group?

That is my understanding.

First step...remove that damned name plaque.
Second step...slap that penguin's belly with bars of soap in socks
Third step...we move on

Jeez...TW from 2007...We were so naive...

Downtown building being converted into lofts

“"I would have never been able to get this project off the ground without the Vision 2025 money," said Sager, who received $1.3 million toward the $3 million total cost. "It's I am just too risky for the banks." The units will range in size from 650 to 2,000 square feet and rent for about $1 per square foot. An adja cent lot will offer dedicated, secured parking.
"

I noticed today that orange cones and caution tape recently went up on the outer perimeter of the roof of the 1st Street Lofts.  Is something actually going to start happening here?

great googly moogly

Something's going on there.  A crane was supplying 2x4s through one of the windows this morning.  My guess is he'll frame a few walls so that he can report progress and nothing more.

According to Vision2025 he's not the owner anymore, the Ross Group is.

Good.  They actually get stuff done.

So far I see a few extra windows open, some cones on the roof and some warning tape and flags.

I'll let you know if I see the "Sager" stone removed from the face and replaced with "Tulsa's Folley".

I hope they don't have to clean each individual brick again... I bet they got dusty in the past 10 years...

I wonder if Sager relinquished his interest?

Breaking news on Channel 6:

http://www.newson6.com/story/32394193/1st-street-lofts-project-gets-new-developer

I didn't realize S&J closed?  I liked that place but hadn't been back in awhile..  Anyone know what will replace it?

I'll be excited to see the work finally get started...I walk by it at least twice a day during work days.

I'll let you know if they discover that Sager did bad things...

(http://67.media.tumblr.com/06bd4f6047c335254d67f2b9bd3a399f/tumblr_mudt1naAkP1s0teago4_400.gif)

I'm still surprised he uses the "we removed every brick" line. I'm no mason, but I've never seen that. I've seen bricks be regrouted or repointed, but I don't think I've ever seen or heard of a building having all the bricks pulled off and redone.  Anyone more knowledgeable than I?

Hopefully this article isn't another puff piece and it actually gets moving. Ross Group gets stuff done. As the Edge Wraps up, resources likely shift over.

I'm not defending Mr. Sager in any way but yes I have had projects where that required removal of the brick that was cleaned and then re-installed or even required complete demolition as a result.  This was required when there is little or no masonry ties to the structure and or when poor or weak mortar was used of developed over time as can be the case in the Tulsa area with historic structures which were built prior to Tulsa receiving quality water from the Spavinaw system, same issue as with the original portion of the 11th Street Bridge, chloride contamination (Tulsa's original water supply was the Arkansas River which at times contains dissolved chlorides) can happen in masonry joints as well.

Will they please replace the "Sager" nameplate?  They can put literally anything else in there.  "Ross" maybe? 

I think Citizens of Tulsa would be fitting, considered the citizens have been the most patient real estate investor/lender known to man.

"Townsend et al" would be fine

Just replace the S with an L and put in a brew pub. Or just the original construction date.

How about JACOBS, since that's what it was originally called?

July 13, 2016 Tulsa World update (http://www.tulsaworld.com/business/realestate/proposed-first-street-lofts-project-gets-new-developer/article_ff800f78-2a85-5463-82a1-af1ed1648dd4.html)

Windows have been open and there have been 4 or 5 workers visible in and on the building.

Not exactly an army of workers getting things done but that's 4 or 5 more workers than I've seen in a long time.

From my office I've been able to see over the last month or so they have repaired the roof which had a tarp over parts of it for well over a year. I've seen a crane nearby recently supplying materials through the windows on the west side.  Things have been happening.

Per the TDA Executive Report for February:

I. First Street Lofts
310 East 1st Street
• Electrical and plumbing rough-in completed throughout the building
• All wall framing is completed
• One side of drywall continues on the 2nd and 3rd floors
• All windows have been installed throughout building
• Steel structure will be set for a large interior staircase that will go from floors 1st
through 4th
• Began utility work in the right-of-way

http://www.tulsadevelopmentauthority.org/wp-content/uploads/2015/10/Executive-Director-Report-10.pdf

Go Ross Group!!!

In that this project appears to be on track, lets start a new thread to focus on where it is going instead of continuing a discussion of where it has been.

- Moderator