Are trust funds holding Tulsa back?

I mentioned a while back that the three families who are contributing $1 million to the construction of "The American", 176-foot bronze statue of an Indian proposed for Osage County, are also major landholders in the Brady Village area of downtown Tulsa.

Brady Village, bounded by the Frisco tracks, I-244, and Denver Avenue has the potential to become Tulsa's Bricktown. Like Bricktown, it's across the tracks from the downtown office district. For years it was allowed to moulder unnoticed, home to rescue missions, warehouses, and light-industrial facilities. But the area was also home to two significant and venerable entertainment venues -- the old Municipal Auditorium, now known as the Brady Theatre, and Cain's Ballroom. For the most part, the area had been ignored by urban renewal programs, so apartment buildings and commerical buildings were still standing, available for occupation by businesses needing a cheap place near downtown to get started. Some pioneering Tulsans were attracted by the potential of the area and moved in with art studios, lofts, nightspots, and offices.

Still, Brady Village seems somewhat stuck, unable to move to the next level. For example, despite a number of plans for the vacant land northeast of Archer and Elgin, nothing has happened. Some proposed loft projects have failed to get off the ground.

I've been told that the Oliphant, Mayo, and Sharp family trusts own most of the land in Brady Village, and that because the ownership is scattered across the country, in some cases, it's difficult to get all the owners in agreement to sell or lease property, and thus a lot of property sits idle. Thus my comment earlier that it would be better for Tulsa if the aforementioned families were to invest their million dollars in developing Brady Village.

A reader contacted me to let me know there was another obstacle to development. The trust-owned land is on the books at a value much higher than its market value. If it were sold at market value, even a very good market value, the trust would experience a loss on paper. Many trusts have provisions requiring fiscal prudence on the part of the beneficiaries, so such a sale would either be prohibited under the terms of the trust, or, if the sale were carried out, would trigger a forfeit, and the trust would be taken from the beneficiaries and given to charity. The land is unlikely to change hands until market values rise enough to approach the book value, which would require a downtown land boom like we haven't seen since the '70s.

It's likely that the same trust provisions prevent the families from doing anything too daring or innovative with their land, beyond collecting rent on existing structures. If this is true, then I can understand why these trusts seem to be sitting on their land. I can also understand why there would be such interest in any public improvements -- like a new arena -- that has the potential to bring up property values sufficiently to allow the trusts to sell off their holdings. Under this theory, they're not looking to make a killing, they're just looking to get out.

In the lead-up to the Vision 2025 sales tax vote, I wrote:

Many observers have noticed that Tulsa doesn't have many risk-takers these days. We have the grandchildren and great-grandchildren of risk-takers and wildcatters, but they keep their trust fund money in safe investments.

That may have been unfair, if it's the case that these "trust fund babies" are forbidden from making risky investments. That may explain why so much money is poured into ever-bigger homes, rather than, say, venture capital for high-tech firms trying to get started here.

Please indulge me in some thinking out loud.

Wouldn't it be ironic if the risk-takers who built this city nearly 100 years ago are suffocating its continued growth and development? In their admirable desire to provide for their descendants, to protect their progeny from financial predators and their own carelessness and stupidity, have they inadvertently squelched any spirit of adventure that might have been passed on through their genes?

I'd like to hear from readers who are beneficiaries of trust funds, particularly old Tulsa money trust funds. Am I painting an accurate picture? What kinds of restrictions apply to your trust fund? Feel free to post a comment, or e-mail me if you'd prefer to remain anonymous.

If trust fund restrictions are holding Tulsa back, we need to get a handle on the problem and see if there is a creative way to unlock the potential for the benefit of the beneficiaries and the city of Tulsa.