Tulsa City Hall: July 2007 Archives

Tonight at their regular 6:00 p.m. meeting, the Tulsa City Council will decide whether to authorize the Tulsa Public Facilities Authority (TPFA) to borrow the money -- $76 million -- to buy One Technology Center and to pay for consolidating city offices in that building. Because the financing will be sole-source -- seller-financed -- it will require seven affirmative votes from the city council to pass.

Proponents of the move talk about how a shiny new City Hall would improve the image of the City of Tulsa. I agree that the image of the City is important, but the true image of the City isn't shaped by the appearance of city government's headquarters building, which few of Tulsa's nearly 400,000 residents and few of our visitors will ever see.

The image of Tulsa's city government is not to be found in the City Hall building. Our citizens and visitors see it in our crime statistics, in the smoothness (or lack thereof) of our streets, in whether our pools are in good repair and open for use, in whether our building codes are enforced, in whether our parks are mowed. The public interacts with city government on our streets and in our parks and neighborhoods, and those places, not City Hall, shape their perception of Tulsa as a place to live, visit, and do business.

This deal should be measured by one standard: Will it leave the City with more money or less money available to fund the basic functions of city government?

Based on the numbers in the Staubach Company's report and the analysis of those numbers by Councilor Bill Martinson, there is a high risk that the move will leave the City of Tulsa with less money for police and parks and streets. If one of the current tenants leaves or even reduces its presence, if we are unable to find a replacement tenant who will pay the same price, if rental revenue is less than debt service on the loan, the City will have to make up the difference out of its operating budget. This deal would make the City of Tulsa a competitor in the commercial real estate industry, rolling the dice in a risky business, and using our mortgage money to place the bet.

To shift metaphors, this deal is a house of cards, and if any one of several contingencies fails to occur, the whole thing collapses.

The only facts that matter are these numbers -- how much it costs to operate our current facilities, how much it will cost to operate One Technology Center, how much it will cost to repay the loan on OTC, and how much we are likely to be paid in rent from third-party tenants.

The Council has not been given a full and detailed accounting of the cost of operating our current facilities. This information is surely available in our accounting system -- how much we pay custodial staff, how much we spend on utilities, the cost of repair projects -- based on actual expenditures over the last few fiscal years. Instead, Staubach prepared a sheet estimating cost per square foot for broad categories -- utilities, repairs, security, etc. -- and then multiplied by the sum of those per square feet numbers by the size of our buildings. The $24 million claimed as deferred maintenance costs are buried somewhere in Staubach's per-square-foot figures.

The Council has not been provided with a list of deferred maintenance items, the cost of each one, and the likelihood of needing to fund those items in the near future. Each such item should have a basis of estimate, explaining the work to be done and the manpower and material required. Instead, in response for their request for a detailed list, the Council was given the names of the items and a single number covering the cost of all of them.

With this lack of detail, it would be easy for Staubach to pick numbers for estimates that would make staying in the existing facilities seem to be more expensive than moving. And don't forget that Staubach gets paid more if the deal goes through, so they'd have an incentive to make the existing facilities look as expensive as possible.

The Council should not approve this deal without an accurate apples-to-apples comparison of costs showing that the move will be less expensive in the near term.

MORE: Jeff Shaw has a better idea for One Technology Center.

Laugh of the Day: "'I'm going to live in Tulsa the rest of my life,' [Kathy] Taylor says." Home is where the homestead exemption is.

Once again I'm later than I should be in getting this linked....

This week's column in Urban Tulsa Weekly is about the special Council meeting held on Saturday morning, June 23, to discuss Mayor Taylor's plan to move municipal offices from the current City Hall and other locations to One Technology Center at 1st and Cincinnati. Originally planned to be an executive session, councilors (with my encouragement) chose to discuss as much of the proposal as possible in open session and to defer any confidential matters until the end of the meeting. The meeting left councilors more doubtful than ever about whether the move would be good for city finances in the near term.

I left one interesting facet of the discussion out of the column: Councilor Martinson said he didn't think the Staubach Company had given due consideration to two other options for consolidating city offices: build-to-suit on land already owned by the City or by the Tulsa Development Authority, or a purchase-leaseback arrangement, whereby a private investor would take on the risk of finding tenants for the extra space in the building.

A possible location for build-to-suit would be on TDA-owned land near the Hartford Building between 1st and 2nd, Greenwood and Hartford. Martinson pointed out that a building custom-made and right-sized for city purposes, including requirements for easy public access to certain offices, might well be less expensive, and would be less risky, than a deal that required the city to attract and keep tenants for excess space.

A Whirled story about the plan quoted Martinson's analogy illustrating the problems with buying more building than we need:

"A gallon of milk is a lot cheaper per ounce than a quart. But if you only need a quart and the rest of it goes sour, you've ended up paying more money than what you really needed for the amount of milk you're going to consume."