By Local Report
Friday, 08 June 2007
Mayor Kathy Taylor announced Thursday a financial and engineering analysis of the city’s purchase option on One Technology Center is complete. The City would save approximately $15.2 million for the first 10 years of occupancy, according to the results of a financial comparison study. In March, the Mayor authorized the City to enter into a 90-day option agreement to purchase the property, formerly known as the Wiltel building, at the Northwest corner of 2nd Street and Cincinnati.
The exclusive option allowed the City to conduct a detailed assessment of the potential purchase. Dallas-based Staubach Company, a real estate consulting firm and Tulsa-based MATRIX Architect Engineers Planners Inc. teamed up to conduct the analysis. The effort was led by the City’s Economic Development Director Don Himelfarb.
"From the beginning, we felt the numbers were very compelling, but after reviewing the completed analysis, we became convinced," said Himelfarb. "After 90 days of due diligence, the case could not be stronger for moving forward with this deal." The details of the agreement allowed the city up to 90 days to conduct a full search of alternative office space, with a clause that permits the City to purchase the building or walk away if the terms are not favorable.
One Tech Center was constructed in early 2002 for an estimated cost of more than $200 million, but along with its parking garage and furniture fixtures and equipment, is currently listed on the market for $80 million. Although the purchase price of the building cannot be disclosed by the City at this time, the total project costs including parking and options are estimated at $67.1 million. Tulsa’s current City Hall, located at 200 Civic Center was built in 1969. Several major structural and environmental maintenance issues have been identified at the current City buildings along with $24 million of deferred maintenance for facilities in deferred maintenance in locations that would be consolidated.
"The facts are clear. This is a smart financial move for the city," said Taylor. "One Tech will save taxpayers money and the old city hall property presents us with a major opportunity for development that will support the new arena and convention center."
The current building that houses City Hall at 200 Civic Center has 146,325 square feet. However, the city also owns or leases another 349,916 square feet in other buildings in downtown. The move to One Technology Center would allow the City to consolidate employees and services from several buildings into one space while reducing square footage by approximately 20%.
"Tulsa is truly experiencing a new kind of energy and growth," said Taylor. "Downtown development is increasing with the construction of the new BOK Arena and there is an increased demand for hotel rooms to support the Arena and Convention Center. The property that our current City Hall is located on has generated great interest as a potential site for a major convention hotel. This move would be an important element of executing our long-term strategy of placing the city’s real-estate assets to a higher and better use for the taxpayer."
ImageThe One Technology Center building offers many benefits to the city. The City can avoid costly capital expenditures by moving from an aging building to a modern structure. The long term energy needs of the city can be reduced by approximately 30%. Citizen access to local government services can be improved as well as providing an enhanced image that fosters new business and economic development. New revenue can also be realized through limited third party leasing of space to complementary government agencies locating downtown. Centralization of city departments will improve internal communications, while also advancing citizen access to city services.
"This decision is a sound business move," said Taylor. "The numbers are solid and the timing is right. The bottom line is that this purchase is smart for the city, but more importantly, it is smart for the taxpayers."
The Mayor, Himelfarb and the consulting team briefed members of the Tulsa City Council earlier this week on the financial and engineering report. A formal presentation to the Council will take place on June 12th. More information regarding the financial and engineering analysis can be found at www.cityoftulsa.org.
Last Updated ( Friday, 08 June 2007 )