Paying it forward: Proceeds from Skirvin deal will help fund convention center hotelPublished: Tuesday, May 17, 2016 By: Brian Brus Source: The Journal Record
OKLAHOMA CITY – About $7.4 million recovered from incentives to redevelop the historic Skirvin Hotel will go toward buying land for a new downtown hotel, the City Council decided Tuesday.
Council members, acting as trustees of the Oklahoma City Redevelopment Authority, unanimously agreed to transfer funds from the city’s Economic Development Fund to the Oklahoma City Urban Renewal Authority to acquire and prepare property at the northeast corner of SW Third Street and Robinson Avenue for private redevelopment. The funds can also be used to pay expenses related to the due diligence required to buy the property and for selection of a developer for the MAPS 3 convention center hotel.
“The site is very important to the development of downtown Oklahoma City,” said Cathy O’Connor, president of the Alliance for Economic Development of Oklahoma City. “It’s adjacent to the Chesapeake Arena; it’s across the street from the MAPS 3 park; and it’s across the street from the convention center site.”
City Manager Jim Couch said in a document to council members the parcel in question has been described by the Park and Convention Center design teams as iconic.
O’Connor said that over the next two months the Alliance will narrow down the list of hotel developers and provide more details for their proposals.
O’Connor was unable to answer Councilman Ed Shadid’s questions about whether developers would want the city involved in land acquisition.
“What we’re assuming at this point is that we will buy the land and lease it to them through a long-term ground lease, similar to the way we did the Skirvin so that we would earn revenues from that ground lease over time,” she said.
The city purchased the Skirvin in 2002 after a 15-year vacancy. The City Council then transferred the property to the Oklahoma City Redevelopment Authority, which sold it to development group Skirvin Partners LLC and agreed to roll about $22 million of public assistance back into development. The deal also called for those funds to be repaid as loans and lease payments.
Projections prepared in 2007 forecast lease and interest revenues between $2.8 million and $4.7 million by March this year. The actual revenues generated so far are in excess of $8 million. But about $700,000 of that money was used to repay a federal Brownfield Loan on the project.
Since the hotel reopened, the financial performance has exceeded expectations, O’Connor said, producing $2.5 million in sales taxes and $880,000 in ad valorem.