3/03/2007

OU takes long-term approach to property acquisitions: Norman OK Transcript, 2/19/07

OU real estate purchases and sales total millions during past 12 years

By Althea Peterson

Several years ago, a board game called "Sooneropoly" arrived at University of Oklahoma fan stores and bookstores alike, touting area campus attractions, businesses and streets around Norman.

Like the famous board game Monopoly, "Sooneropoly" players bought and sold properties, but it had a regional twist from the original, including cards such as "ST. PATRICK'S DAY! All tokens advance to O'Connell's."

The irony would be if such a board game came to life.

The University of Oklahoma purchased approximately 70 real properties during the past 12 years for more than $18 million, while selling less than 20 - three of which were in Bartlesville and Dewey, Okla., for $2,640,079.24.

Information on all properties purchased and sold was acquired by The Transcript with an Open Records Request earlier this year. Some of these purchases were block purchases, such as a $4.48 million purchase of top properties - six on Jenkins Avenue, three on Lindsey Street, and one on Lincoln Avenue properties, which was made in January 2007. Coincidentally like the board game, one of the properties purchased by OU was the land where the restaurant O'Connell's leases. That purchase was approved by regents in September 2006.

In the past, OU President David Boren has referred to property purchases around the Norman campus as "strategic." Boren said these purchases not only help OU, but also the area.

"Most of the properties which the University acquires not only benefit the University but also the Norman community," Boren said. "For example, the neighborhood around our property on Boyd St., which was once known as Newman Hall and later a halfway house called Connections, was of great benefit to the safety and security of the surrounding neighborhood and its residents."

In an interview with The Transcript, Cleveland County assessor Denise Heavner noted that some of the properties OU purchased during the last 12 years were not developed. For example, 115 Brooks St. was a vacant lot when the county last assessed the property. Once properties are purchased by OU, they are tax exempt.

"We have always attempted to develop our properties in a way which enhances the aesthetic beauty of Norman as well as the university," Boren said. "The university and the city have worked extremely cooperatively together, including swapping properties on occasion which are needed for services such as fire protection. Whenever possible, we grant the city and county easements across the university's property at no cost."

At Oklahoma State University, regents approved the use of eminent domain in July 2006 to acquire properties necessary to build an athletic village. In a July 2006 release, David Schmidly, OSU System CEO and president, said the OSU Foundation did a "remarkable job" negotiating the purchases of properties and trying to avoid eminent domain.

"We have said all along that we want to avoid eminent domain, and that remains the case," Schmidly said in July. "We continue to actively negotiate. We remain optimistic we can reach agreements on the final property. If we do not, it will not be from a lack of sincere effort by the Foundation and the university."

Boren said OU has never used eminent domain to acquire properties as long as he has been president.

"One of the reasons we purchase property when it becomes available is to avoid whenever possible the use of eminent domain," he said. "As we have seen in other communities, using eminent domain to force people to sell properties, especially personal homes, can be very painful for those involved. It is always best to use the willing buyer, willing seller approach. We try to think ahead, sometimes several years into the future, to identify the university's needs. The number of properties obtained by OU over the past 12 years is relatively small, especially when compared to other universities of our size including the state's other publicly supported comprehensive university."

The purchase of county properties by OU causes tax revenue to be lost, Heavner said. While records for some properties have been lost because of the transition from the old county offices to the new county office building, available records show that taxes collected annually on properties purchased by OU during the last four years totals more than $70,000.

Have the county entities that rely on property taxes been in a crunch because of lost tax revenue? Not really, Heavner said.

"It's because Cleveland County is growing so quickly," she said. "In a smaller county, it might matter more... of course, the county would be smaller without the university."

Because of properties lack of development, Heavner noted that properties are taxed on "fair cash value," as opposed to potential value. The sale prices have, in some cases, allowed OU to make a $513,100 profit off property sales in the last 12 years - from properties also acquired during the same time frame. However, Boren said the amounts paid by OU, which must be approved by regents first, rely more on potential value.

"County appraisals for properties for tax purposes are generally quite different than appraisals for market value. The regents are always provided with these appraisals before they take official action."

Behind all the numbers, Boren said OU tries to work in a way that mutually benefits the area - from real property development, to the rest of the economy.

"We have also used a significant amount of property for additional off-street parking and the creation of parks which serve both the university and the city," Boren said.

"The University is also a major force in bringing jobs to Norman and spinning off new businesses from University research, all of which increase the tax base of the city and county."


Norman OK Transcript: http://www.normantranscript.com