An attempt to test whether downtown's real estate market is heated enough to attract development of housing atop a new city garage came in with no takers as the deadline hit Monday.
The deadline to submit a plan to the Oklahoma City Urban Renewal Authority was extended a week. Early on, some developers did show interest in the possibility of instant high-rise housing by simply building three stories of apartments above the new 10-story garage set to be built south of City Hall.
Some may see the lack of a response as a failure for the reorganized Urban Renewal Authority, now part of a broader operation run by the Alliance for Economic Development of Oklahoma City.
But consider that even a few years ago, such an effort would have been unthinkable in downtown Oklahoma City. The folks at Urban Renewal are thinking outside the box, looking at development patterns in other cities and attempting to figure out how to keep momentum going in a central business district that is enjoying some of the highest occupancy rates witnessed since the oil boom of the early 1980s.
Recall that in 1980, leasing reports showed vacancy in downtown Oklahoma City was virtually nonexistent. But when the crash hit, it hit hard, and vacancy jumped to well over 30 percent throughout the late 1980s and most of the 1990s.
Housing during that same time was limited to Regency Tower and a struggling Sycamore Square.
Advance to 2013, and downtown is enjoying a boom in housing development, where the apartment supply is constantly outpaced by demand.
Class A office space, meanwhile, is down to 4 percent, and the only large chunks of older, lower-rate office space are the troubled First National Center and the Dowell Center (formerly Midland Mortgage building) that is closed and slowly being renovated.
In such a market, why did the prospect of building housing, or even offices, atop the new garage fail to draw bidders?
Cost, as always, remains the simple answer. One developer who looked at the project explained that rental rates for such space would run at $3.50 per square foot to break even when the current market, at best, can support $1.75 a square foot.
Office space, according to this same analysis, would need to lease at more than $30 a square foot when the market at best might support $25 per square foot.
The concept of more sophisticated mixed-use urban development, however, is now a part of the widening discussion of downtown's future. And for that, this failed effort might not be seen as such a failure in years to come.