State OKs $43 million deal for troubled Tulsa apartment complex
BY ZIVA BRANSTETTER World Enterprise Editor
Thursday, January 31, 2013
1/31/13 at 7:18 AM
Get the latest news on the Fairmont Terrace homicides: Read coverage of the apartment complex killings and on other homicides in the area nearby.
OKLAHOMA CITY - A state agency approved tax-exempt financing Wednesday as part of a $43 million deal by investors to buy the Fairmont Terrace apartment complex in Tulsa and "make it a safe place for people to live."
Details of the plan include sweeping security improvements at the federally subsidized apartment complex near 61st Street and Peoria Avenue, as well as a survey of area residents.
"We are very excited. We feel it's a great opportunity to promote large-scale change in that neighborhood," said Pete Marrone, a consultant for Midwest Development Partners LLC of Joplin, Mo. Marrone appeared before the Oklahoma Housing Finance Agency, which voted to approve tax credits as part of the deal.
Midwest Development is purchasing the 336-unit complex at 1111 E. 60th St. from its current owners, two California limited liability corporations.
Four women were shot to death inside a unit at the complex on Jan. 7, and police say they expect an arrest in the case soon. Eight killings have occurred at Fairmont Terrace in the past two years, among 17 homicides in the surrounding area since Jan. 1, 2011.
The homicides have focused public attention on the issue, including promises by city officials to explore ways such as licensing of apartment complexes to address the crime. Out-of-state investors who are not proactive about security problems are part of the problem, officials say.
Public records do not list the corporate officers of Midwest Development Partners. The company's tax credit application lists an executive of Crossland Construction Co. as the contact for the partnership and lists Crossland as the contractor for the project.
Crossland, based in Columbus, Kan., has offices in Tulsa and Oklahoma City and has been the contractor on many public and private projects in the Tulsa area.
The sale of the property is expected to close soon, and construction is expected to be complete next year, records show.
The current owners - DK Ukiah Properties LLC and 1574 Pacific LLC - purchased the property in 2006, records show. Calls to individuals associated with the California LLCs have not been returned.
Marrone appeared before the state housing agency in Oklahoma City on Wednesday to present details of the proposal to buy and upgrade Fairmont Terrace. The state agency is responsible for considering applications for a variety of tax-exempt financing deals to provide housing for low-income residents.
The board voted 5-0 to approve up to $15 million in tax credits as part of the deal. The board also gave initial approval to issuing $27 million in tax-exempt multifamily bonds.
Midwest Development's application for tax credits shows that the deal to purchase Fairmont Terrace and improve the property will total $43.4 million.
OHFA board member Steve Ganzkow, senior vice president of American Residential Group Ltd., said Fairmont Terrace "has been the subject of a tremendous amount of adverse publicity."
"My question is, what's going to change with this property? It's a high-profile situation in Tulsa," Ganzkow told Marrone.
Marrone said the prospective owners are putting together a team to develop a detailed plan for the complex. He said the company is in talks with Urban Strategies Inc. of St. Louis to conduct a "broad neighborhood survey."
"They have worked in some of the toughest neighborhoods in the country, and we feel confident that they will be able to drill down into those problems," he said.
Urban Strategies has worked on projects in cities that include New Orleans, St. Louis and Miami, Fla., according to its website.
"They would go out into that community and really find what the problem is, what the issues are and identify those so that we, along with the city and other property owners in that area, can do everything we can to address those problems and make it a safe place for people to live," Marrone told the board.
Midwest Development also plans to hire a property management company to oversee daily operations at the complex, he said. The company has been in talks with McCormack Baron Salazar, also based in St. Louis, Marrone said.
McCormack Baron Salazar's website states that it has operations in 18 states and is "the nation's leading for-profit developer of economically integrated urban neighborhoods."
The company is also involved in development of Tulsa's West Park Apartments, affordable housing under construction across from Kendall-Whittier Park between Lewis and Atlanta avenues.
"They specialize in this type of property - urban property with security issues," Marrone told the board. "They are very good at going into a neighborhood like this and really turning it around."
Ganzkow said he was "familiar with some of the partners, and they are well qualified to put this program together."
"You can be part of the solution to a terrible problem. ... I just want to make sure that the residents are going to be the ultimate beneficiaries," Ganzkow said.
The plan calls for spending at least $13 million for upgrades to the property and likely more, depending on survey results, records show.
Marrone said plans call for improved screening and background checks of tenants and addressing issues with tenants who do not abide by the terms of their lease.
Fairmont residents and current management of the complex have told the World that problems occurred in the past due to visitors or people not on the lease staying with residents.
Plans also call for improved lighting throughout the sprawling complex and security cameras "that cover every inch of this property" in common areas, including hallways and doors to apartments, Marrone said.
Access to the property will be controlled, and residents will have remote-control access to the exterior and key fobs that allow entry to each apartment building and to their individual apartments. Each unit will also have a security system, and security guards will patrol the property, Marrone said.
He said movements of residents and visitors would be recorded electronically by the key fobs and cameras.
"It's redundancy and it's overkill, but it's safety, and we can't emphasize enough we have to be redundant; we have to be concerned about the safety of those residents."
Fairmont Terrace development details
Here are key points of the plan to purchase and overhaul Fairmont Terrace:
Where: Fairmont Terrace, a 336-unit publicly subsidized apartment complex at 1111 E. 60th St.
Who: Developer is Midwest Development Partners LLC, based in Joplin, Mo. Contractor on the project is Crossland Construction.
Other partners: The company is in talks with possible partners, including Urban Strategies Inc., to conduct a community survey, and McCormack Baron Salazar, to manage the property. Both are based in St. Louis and have extensive experience with urban communities.
How much: Midwest Development Partners is proposing a $43.4 million deal to purchase and upgrade the complex, including up to $15 million in tax credits and about $27 million in tax-exempt multifamily bonds.
When: Closing was initially expected Feb. 1 but has been delayed. Construction is expected to be complete next year.
Other details: Plans call for increased tenant screening; controlled access to the property; key fobs that record entry into buildings and apartments; security systems in each unit; video cameras throughout the complex; lighting improvements; and upgraded landscaping.
Source: Oklahoma Housing Finance Agency
Original Print Headline: $43M deal OK'd for Fairmont Terrace
Ziva Branstetter 918-581-8306
ziva.branstetter@tulsaworld.com
Associated Images:
Residents of Fairmont Terrace walk around the apartment complex near a playground on its east end in south Tulsa earlier this month. JOHN CLANTON/Tulsa World
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