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A ground breaking ceremony launched construction on the $4.3 million 1700 NE 23rd Clinic Project on a blighted stretch of NE 23rd Street east of the state Capitol Wednesday morning.

Ground breaking - NE 23rd St Clinic Project
Ground breaking – NE 23rd St Clinic Project

The project will use the bones of a couple of adjoining buildings that sit on the south side of NE 23rd between N. Kelham and N. Rhode Island Avenues.

When completed by May 2018 10,000 square feet of the rebuilt structure will be the new home of one of the Oklahoma City Clinic’s three neighborhood locations and another health care provider will fill out the remaining 8,000 square feet.

The clinic will be moving off the OU Health Sciences Center campus on NE 13th where it was difficult for patients to navigate the large campus and parking.

Scott Potter, COO, Oklahoma City Clinic
Scott Potter, COO, Oklahoma City Clinic

“Our model moving forward is to be in a community delivering primary care,” said Scott Potter, Chief Operating Officer for Oklahoma City Clinic.

“If we can be really, really good at primary care, people won’t have to go to hospitals.”

The project is phase one of two phases that will eventually include the next block of storefronts to the east of the current location being developed.

Developers are The Pivot Project and Sandino Thompson, a native of that part of the city.

Thirty-eight years

“This is the first major development we’ve had on NE 23rd in 38 years,” Russell Perry said.

Russell Perry, Editor, The Black Chronicle
Russell Perry, Editor, The Black Chronicle

In 1979 Perry founded The Black Chronicle, a newspaper focused on the needs of Oklahoma City’s east side African-American population. Since then, it has grown into a statewide newspaper.

In the following 38 years the company, Perry Publishing and Broadcasting, has improved their headquarters two blocks away from the project and two others they own along 23rd Street.

But the rest of NE 23rd Street from the Capitol to Martin Luther King Avenue has been without any major investment until now.

“Key thing here is that you have a diverse group who is willing to invest their money to create the commerce that’s needed for the completion of the growth and development of this city,” Perry said.

Key banks

His son, Kevin Perry is the CEO of the company.

Kevin Perry, Russell Perry
Kevin Perry (L), Russell Perry

He said the key to getting more interest from banks to back more projects in the area is for this project to succeed.

“Banks follow money,” the younger Perry said. “If this makes money, the banks will notice and be more willing to lend to other projects in the future.”

The Perrys should know.

They are principals in First Security Bank which loaned the seed money for the initial purchase of the land and buildings for phase one.

Phase one, 1700 NE 23rd St.
Phase one, 1700 NE 23rd St.

That loan was paid off when Citizens Bank of Edmond decided to loan $3 million to the whole project and the City of Oklahoma City Council committed another $1.3 million in an 8-1 vote Tuesday.

To learn more about how the city will come up with the money read our coverage of Tuesday’s city council meeting.

Big step

It took Sandino Thompson and Pivot Project partner Jonathan Dodson six months longer than they first thought to find a bank that would stand behind the development after First Security helped them acquire the property in October 2016.

Jonathan Dodson, development partner
Jonathan Dodson, development partner

The project was on high center until Citizens Bank agreed to take on the biggest part of the project as long as developers brought in Steve Mason as an additional guarantor of the loan.

Mason has the depth of experience in revitalizing depressed properties of Oklahoma City that gave the bank confidence to move forward as long as the city participated in the project, too.

Fawn Sachleben, Chief Lending Officer at Citizen’s Bank of Edmond, talked with Free Press about why Citizens Bank required the City of Oklahoma City to contribute the $1.3 million.

“It wasn’t Citizens that did that,” she said. “It was the level of capitol that was required overall.”

Eran Harrill, President, Okla City Black Chamber of Commerce
Eran Harrill, President, Okla City Black Chamber of Commerce was the MC of the ceremony

Federal banking regulations require that banks not lend beyond the value of the project, and that is keyed from the appraisal of the property and comparable projects in the area.

How critical was the lack of comparable properties?

“It was everything,” Sachleben said. “We really are handcuffed. The appraisal and the comp is what the project is worth. If you are lending more than its worth, then the banks are evaluated for being irresponsible.”

Vision

Jill Castilla is CEO of Citizens Bank of Edmond and nationally known for positioning the bank close to the community needs of metro neighborhoods.

Looking west past the project toward the Capitol
Looking west past the project toward the Capitol

Sachleben said that the difference between Citizens Bank of Edmond and the other banks that turned down the developers “is that we have a CEO with a vision of giving back to the community.”

“We have a CEO that wants to do what’s right instead of what’s easy.”

And it took vision on the part of other leaders, too.

Ward 7 Councilman John Pettis told Free Press that he started pushing for a Tax Increment Financing District for the northeast side after his election in 2013.

John Pettis, OKC Ward 7 Councilman
John Pettis, OKC Ward 7 Councilman

The OKC Council approved the NE Renaissance TIF district in 2015, which laid the groundwork for this first project.

“This project is going to be a real game changer for the northeast side,” said Pettis.

Mayor Mick Cornett, City Manager Jim Couch, Ward 7 Councilman John Pettis, Oklahoma Senator David Holt and others came to a meeting with representatives of Oklahoma City Clinic when clinic leadership started questioning if the project was going to actually work.

“We wanted them to understand how important this was to current and possible future city leadership,” Holt told Free Press about the meeting. He is currently running for mayor of Oklahoma City against Brian Maughan.

David Holt, Eran Harrill
Okla Sen David Holt (L), Eran Harrill, Pres OKC Black Chamber of Commerce

The group of city leaders convinced the clinic’s leadership that they were committed to the project.

Oklahoma City Clinic’s leadership bought into the vision by agreeing to wait for a May 2018 move-in one year later than their original plan.

“We really need NE 23rd to finally reach its potential,” said Holt. “That cannot happen without some catalyst. We are all very hopeful that this project is that catalyst we’ve been waiting for.”


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