Skirvin proves to be worthy experiment

Photo courtesy of Skirvin  

If you've been to the Skirvin Hilton in recent weeks, you've noticed construction and fresh finishes throughout the historic hotel. The Skirvin has been an important investment both publicly and privately, and is arguably Oklahoma City's most important historic preservation project to date.

The Skirvin opened in 1911 but sat vacant and deteriorating for years after closing in 1988. The city purchased the hotel in July of 2002, and the hotel reopened in February of 2007. The $56.4 million funding plan approved by the City Council in 2006 included a mix of public and private sources. The public investment called for repayment through loan proceeds, ground lease payments based on the success of the hotel and a portion of the proceeds from the future sale of the hotel.

It was expected that lease and interest revenues would be between $2.8 million and $4.7 million by now, but actual revenue exceeded $8 million. The revenue includes $700,000 used to repay a brownfields loan used on the project. The remainder of the revenue has been set aside in the Economic Development Fund of the Oklahoma City Redevelopment Authority for use in funding future redevelopment projects. Along with lease and interest payments, the city has benefited from additional sales tax on hotel activity as well as the state's match on a portion of the sales tax.

The return on investment of the project has far exceeded original expectations, and the financial returns will assist with future development projects such as a proposed headquarters hotel adjacent to the new MAPS 3 Convention Center. Besides providing necessary accommodations for the new convention center, the 500- to 800-room, upscale hotel would provide jobs and be a catalyst for additional development in the Core to Shore area. A hotel adjacent to the new convention center would have dramatic views of downtown and the new MAPS 3 park, and would be a welcome addition to the mix of hotels, including the Skirvin, that serve our thriving downtown. It is expected that a recommendation for a hotel developer will go to the City Council within the next few months.

Oklahoma City has a track record of successful development through public/private partnerships, as evidenced by the success of the Skirvin Hotel. Through careful consideration and thoughtful planning, we will continue this trend of success.
Local economic forecast shows gradual improvement
Earlier this month, Russell Evans, executive director of the Economic Research and Policy Institute at the Meinders School of Business at Oklahoma City University, presented an economic forecast update to the City Council. The update provided an overview of current national and state economic conditions and their implications for Oklahoma City's economic outlook.

This type of information is helpful for the Alliance, City Council and others in making short- and long-term decisions for Oklahoma City. His comments reflected good and bad news and ultimately recommended an attitude of cautious optimism.

According to Evans, real gross domestic product growth nationally in the first quarter was just 0.8 percent, which heightened concerns of broad economic weakness both in the U.S. and abroad. The second quarter is looking less bleak, with the U.S. economy tracking 2.2-percent growth. That being said, the May jobs report estimated the creation of only 38,000 new payroll positions, which was less than previous reports had estimated.

Evans noted that Oklahoma City has a different employment situation than the rest of the state, which he believes is a reflection of urbanization, density enhancement and the geography of the I-35 corridor. In spite of that distinction, the city's fiscal outlook is largely reflective of the more pronounced economic weakness in the rest of the state.

The oil and gas industry is still in a contraction phase, said Evans, though the pace of contraction is lessening. The slower pace of contraction offers hope that the state will soon move from a period of acute distress to recovery, and eventually to full health.

Evans points out that the model scenarios for the first quarter of the fiscal year that started July 1 are very likely to reflect no growth relative to the first quarter of the previous fiscal year. He expects that any strength in fiscal conditions will come in the second quarter at the earliest, and possibly not until the third quarter. An argument for a much stronger second half of the fiscal year, and consequently a much stronger fiscal year, is beginning to develop.

We appreciate this type of research and the insight it brings. We will watch with cautious optimism and hope for a continued strengthening of our economy both here in Oklahoma and in the rest of the country.
Downtown Development Projects
Current RFPs

Urban Renewal RFPs
Requests for John F. Kennedy Urban Renewal Area. Open ended.
Upcoming Meetings

For a list of upcoming meetings and agendas, click  here .

In the News
The Oklahoman
Track Downtown Development on Twitter
Follow @dtOKCbuilds for picture updates of downtown development projects.
President's Report
About The Alliance
The Alliance was created in 2011 to better serve the economic development needs of Oklahoma City. 

With its collaboration with city and private entities, the Alliance acts as a comprehensive resource for businesses in need of assistance from the public sector.