The Oklahoma City Council voted Tuesday to provide $1.3 million in up-front funding to help start one of the first new developments along NE 23rd street in decades.
The decision will allow the prestigious Oklahoma City Clinic to lease a remodeled building at 1700 NE 23rd Street along with another health care provider.
The move will mark the first major investment in years for the northeast side, a historically black majority part of the city.
There has been little investment for development since the 1960s raising persistent questions about banking policies toward that section of the city.
The project will be developed in two Phases using property along the south side of NE 23rd street between N. Kelham and N. Rhode Island.
Phase I, devoted to health care, is estimated to cost $4.3 million.
The request for city funding came after developers could not find a bank that would give them a loan for development on the northeast side unless the city made a significant investment in the project.
Developers Sandino Thompson and Jon Dodson presented the plan to the council with help from Cathy O’Connor, President and CEO of the Alliance for Economic Development.
About two-thirds of the block has an existing building that will be refurbished and repurposed for providing medical care for surrounding neighborhoods where there are few, if any, healthcare providers.
Thompson explained that Phase I will be devoted to 18,000 square feet of “class A medical space.”
Phase I will provide 10,000 square feet for the Oklahoma City Clinic to move from its current building on the Health Sciences Center campus on NE 13th.
The other 8,000 square feet of that phase will be used for another medical provider.
Phase II will involve business development with local business people who have already been in discussions with Thompson and the other developers.
A unique feature of Phase II will be giving equity in the property along with a lease.
Dodson, who was once in banking, explained that they had been surprised by how reluctant banks were to give them a development loan for the project.
Even though Pivot Project has a proven track record, banks would not make loans because of a lack of comparable properties on the northeast side upon which to base their valuations.
Eventually, Citizens Bank of Edmond agreed to give the developers a loan as long as the city would participate in the project and they got another investor to guarantee the loan.
The developers gave long-time visionary developer Steve Mason an interest in the project in exchange for his becoming one of the guarantors of the loan.
Tuesday’s resolution completed the requirements by Citizen’s Bank of Edmond.
The bank still made all developers personally guarantee the loan, Dodson told Free Press.
All council members voted in favor except for Ward 2 Councilman Ed Shadid.