Posts tagged with "Tulsa":
In October 2014, photos surfaced of John Johansen’s Mummers Theater, or rather, the theater reduced to a pile of scrap metal and rubble—the humbled remains of bold architecture traded in for corporate towers courtesy Robert A.M. Stern.
In 2010, before its demolition, the 1970 theater was vacant and severely damaged by flooding. Finding funding for historic preservation, especially for structurally compromised buildings, can be challenging.
And, if two Oklahoma state senators, Mike Mazzei and Rob Standridge, had their way—luckily the bill died on the Senate floor—more buildings could have lost funding sources for preservation and go the way of Mummers Theater.
This past February, the two Republican lawmakers introduced Senate bill 977, a sweeping proposal to close the state’s budget deficit by nixing a slew of tax credits for two years, including those intended for historic preservation.
Oklahoma’s Own News on 6 reported that the bill could affect Tulsa buildings like 400 South Boston, a planned hotel conversion; the TransOK building at Sixth and Main, a 30-unit residential building; and the Palace Theater, a residential conversion in process. The largest project to be affected is in the heart of downtown Oklahoma City: The $30 million renovation of the city-owned First National Center, a 33-story, almost one-million-square-foot 1931 art deco building at Broadway and Park Avenue.
On January 7, 2016, Oklahoma City awarded Lewisville, Texas–based NE Development the contract to preserve First National and convert it to the mixed-use trifecta of residential, retail, and hotel. Senate bill 977 was introduced the following day, complicating the project’s timeline and casting momentary doubt on its financial feasibility.
The issue with rehabbing big buildings like First National Center, said Luke Harry, president of asset management at NE Development, is that “you have to figure out ways to normalize the costs, not to make it cheap, but to make it regular. I could build a 30-story tower for half the price of rehabbing First National.”
The aim of federal, state, and new market tax credits, tax increment financing, and similar incentive programs, said Harry, is to mitigate the risk of investing in often-costly rehabs. “Nobody’s making money off of the tax credit, they’re making money off what you can do five, seven years down the road, once everything starts to stabilize.”
To many developers and preservationists, the cuts seem like a cheap shot. Harry explained that in order to receive a tax credit, his work—plans, rehabilitation, and completed construction—is checked at those three key points before the state issues any tax credits. “Everyone assumes the developers gets these credits. They don’t really understand that the money never gets close to [the developers]. We actually take a small loan out on the money. It’s not like when we have $20 million in tax credits, we’re walking around with $20 million in our pockets.”
NE Development will not close on the building until after May 27, 2016, the day the legislative session concludes for the year. Right now, the bill is in legislative purgatory. It’s been stripped of its title, and a title-less bill cannot be made into law. Roxanne Blystone, Senator Mazzei’s executive assistant, said that the bill was amended to reinstate historic preservation tax credits. The sponsors of the bill could resuscitate the bill during the next session, although this is not likely to happen.
While the near-certain death of the bill is good news for the historic preservation tax program, its mere presence has delayed the timeline of large projects like First National and all but killed smaller projects, especially in rural Oklahoma, observed Harry. Anticipating a delay like this, NE Development had two extensions related to preservation credits in its contract, “Mostly because it’s a longer process. We’re comfortable with our ability to get the credits, we’re just uncomfortable with whether they’re going to be there,” Harry noted, ruefully. Melvena Heisch, deputy state historic preservation officer at the Oklahoma Historical Society, said that she doesn’t know if the bill has affected any projects yet, but the agency was “quite concerned” about that possibility early on.
If the threat of cuts to historic preservation has real-world ramifications in Oklahoma, the bill also raises questions around civic priorities and the future of preservation in the state. Harry suggested an intervention as simple as a lunch-and-learn for legislators to address misperceptions about the tax credits and give a clear explanation of how they work. “I think everybody would understand [the credits] because they’re just not tricky, they’re very transparent. Historic tax credits work really well. Without that money, beautiful historic buildings rot in place.”