PAST INVESTMENTS

NMR has made investments in two projects in downtown or near-downtown Oklahoma City, since it was awarded an allocation of New Markets Tax Credits in 2005. Those projects are described below:

The Skirvin Hilton Hotel.
NMR made loans in the total amount of $23,000,000 during 2006, to Skirvin Partners LLC, to help fund the $55,000,000 renovation of the city’s historic Skirvin Hotel, a landmark building in the heart of downtown, which had been boarded up since 1988.  Listed on the National Register of Historic Places, the property was acquired by the city in 2002 after a committee appointed by the mayor recommended that the building be salvaged and restored as a full-service hotel.  Three years later the developer selected by the Oklahoma City Urban Renewal Authority

from six proposals was still struggling to complete the financing, even with multiple layers of public support (see below).  When NMR and REI New Markets (another CDE) jointly agreed to provide $31,500,000 in New Market Tax Credit financing to get the project over the hump, Mayor Mick Cornett wrote, “without your commitment of … New Markets Tax Credits, this project would not have been possible.”

The tax credits provided by NMR and REI have leveraged a number of other public and private funding sources.  In addition to developer equity, private first and second mortgage financing, and federal and state historic tax credits, the project has utilized a section 108 loan, a federal EDI grant, a brownfield loan, and bond proceeds from two separate tax-increment-financing districts.  Public assistance funding administered by various agencies of the city has contributed $18,000,000 of the total project costs of $55,000,000.

Community impacts and benefits from this project, as acknowledged by resolution of the Oklahoma City Council, were projected to include “the generation of more than 400 construction jobs, the creation of approximately 170 permanent hotel jobs (FTEs), the elimination of one of the starkest
examples of blight remaining downtown, the addition of 225 hotel rooms one block from the convention center, increased tourism and convention business capacity, the preservation of one of the most historically significant structures in the state, increased ad valorem and sales tax revenues, improved property values, [and] additional direct and indirect impacts on the state and local economy”.  Based on figures from the general contractor, actual construction jobs (FTEs) totaled 404, and based on the hotel manager’s actual staffing plan, the project has created 305 permanent hotel jobs (FTEs), of which
approximately 283 jobs would be considered accessible, based on education or training requirements, to Low Income Persons. These figures do not include indirect or induced effects, which should approximately double the count of permanent jobs created.

In a letter to Charles E. Wiggin dated Jan. 25, 2006, Mayor Mick Cornett wrote “The closing of the Skirvin Hotel transaction last month was a great achievement for Oklahoma City .  I know that everyone working on the project put in a great deal of time and effort.  I am especially grateful to you for the critical role that New Markets Redevelopment Limited Partnership [NMR] played and for your leadership in overcoming the many difficult aspects of this complex transaction.  Your understanding of the potential financing options for this project, your willingness to seek creative solutions to the challenges presented, and, above all, your commitment to generating economic development in our community brought us to the timely closing of the transaction.  The reopening of this grand hotel a year from now—after eighteen long years of being closed—will be a great cause for celebration for everyone in Oklahoma City and indeed, across the state of Oklahoma.  Thank you for the valuable contribution you and New Markets Redevelopment are making to our fine city.”

St. Anthony Physicians Office Building.

In November, 2006, the Governing Board of NMR committed $11,000,000 to the construction of a new medical office building on the campus of St. Anthony Hospital , a major provider of indigent healthcare, in near-downtown Oklahoma City .  Funds will be advanced during 2007, as construction progresses.  Three years earlier, faced with rising costs and dwindling revenues, St. Anthony Hospital was directed by its board to evaluate a move

to the suburbs.  Following an immediate public outcry, the Mayor, City Council, County Commissioners, and other community leaders joined with St. Anthony to undertake a study of the conditions which prompted the proposal for relocation, and developed a plan of public and private action which would allow the hospital to retain its historic location and commit to a major investment in facility and service improvements.   A component of that plan, the physicians’ office building, proposed by a private developer and physician investors because of the hospital’s capital shortage, faced severe feasibility issues after the run-up in construction costs which followed Hurricane Katrina.  The investment by NMR in the form of a low interest rate loan and a soft-equity investment enabled the stalled project to move forward.

The NMTC-assisted investments by NMR will leverage investments from other private and public sources, which include a ground lease on favorable terms from St. Anthony Hospital, site improvements funded with a TIF loan, a direct loan (without NMTC support) from US Bank, and equity investments

from the developer and physician tenants.  This project is part of a reconfiguration of the east side of the hospital campus, which includes a new hospital entrance, a closing of a city street for hospital use, grade separation of service and public access points, and new patient, visitor, physician and employee parking on the east side of the campus, all accomplished with a combination of hospital, government,
NMTC, private developer, and physician funding.

Community impacts expected from this project include approximately 144 construction jobs, and an estimated 258 permanent jobs (not including indirect or induced effects, which will approximately double this number), improved healthcare services to Low Income Community residents and Low Income Persons, wealth creation for those persons through savings attendant to the payroll impacts, and ancillary benefits to a not-for-profit hospital, committed to the Low Income Community.