Trust fund follow-up

I've received a few comments on my earlier entry about trust funds and their impact on Tulsa's economic development in general and downtown redevelopment in particular.

What I wrote was conjecture -- just me thinking out loud -- and so I'm happy to hear from people with experience in these matters to fill in the sizeable gaps in my knowledge on this subject. I'll add that I may have misunderstood or mischaracterized what I was initially told on the subject.

I certainly did not wish to belittle -- as one reader seemed to think I did -- what Brady Village property owners have already done to try to create an arts, entertainment, and loft district. I do think it's fair to point out that the area hasn't yet reached critical mass, and it's worth asking what the obstacles are. The whole point of what I wrote was that it may not be the fault of the property owners that more isn't happening, that they may be constrained by the terms of the trusts that own the property. Likewise the lack of available venture capital may not be because Tulsa's wealthy are risk-averse, but because they don't have full discretion in the use of their wealth.

I should elaborate on the point about a trust only taking a paper loss if they should sell downtown property at market value. An accountant friend said such a transaction would be a real economic loss. As the situation was explained to me, some of these properties came into the trusts as the result of bankruptcies during the early '80s when downtown property values were much higher than they are now, perhaps much higher than they are ever likely to be. Under those circumstances, an individual owner might decide that the market value is unlikely to approach the book value in the forseeable future, and it's worth having the cash to be rid of the property. The impression I have is that a trust is often not free to make the same trade-off.

I continue to welcome more input on this, and I especially appreciate the leads to more information, which I'll pursue as I have opportunity.

P.S. Real life has intruded on available blogging time in a big way -- but not in a bad way -- during a week when I thought I'd have more time than normal to write. Thus the lighter than usual blogging, which is likely to continue for a while.