Devon Energy Corp., the largest single tenant at downtown's troubled First National Center, has filed a court motion against the California owners claiming they are failing to maintain elevators and have endangered employees' safety.
First National Building LLC, an investment group led by Aaron Yashouafar, chief executive officer of Milbank Real Estate, has been in bankruptcy court for the past year since lenders won a foreclosure motion on the property.
A motion filed in the case in Western District U.S. Bankruptcy Court on Thursday alleges elevators frequently stop between floors, leading Devon's employees to either climb out or jump down to exit the elevators; elevators often close while passengers are exiting or entering the cabs, and they fail to release when contact is made with passengers.
The motion also alleges passengers have been trapped in elevators for long periods, and that on July 5 every passenger elevator in the east tower ceased working for “an extended period of time.”
Emily Dobson-Timm, senior property manager at First National, said the motion would be reviewed. She said the building's owners have had a service contract with Schindler Elevator Co. since 2007. She said she has been informed by Schindler the company also services elevators at Devon's headquarters, 20 N Broadway.
“We've been inspected by the city of Oklahoma City and Schindler,” Dobson-Timm said. “They indicated they found nothing that is of concern.”
Chris Kirt, legal counsel for Devon, said the company has dealt with continuous breakdowns of the elevators in the east tower and that three elevators have been shut down for several years. He said Devon's concerns are primarily with the elevators.
In the motion, Devon cites cases when elevator cars jolted when coming to a stop, momentarily remaining motionless, and then jolting again.
“This second jolt throws exiting passengers off-balance because they are in mid-step,” the motion states. Also, “elevators remain on the first floor, rapidly opening and shutting their doors. Employees are forced to rush through the doors to
The motion gives the building's owners 15 days to address the concerns or face a request for the court to potentially let Devon subtract the costs of any inspections and repairs from its lease.
“Our day-to-day issues, like toilets not flushing, we get a prompt response,” Kirt said. “But the problem with the elevator situation is that it hints at a pretty big issue with the building. We want to gather more information and put ourselves at peace as best as we can. We certainly don't want to wait for inspections until March.”
Devon started leasing space in 2002 and now leases eight floors of the east tower and a couple of floors in the center building of the complex. Kirt estimated the company's lease accounts for about half of the rented space in the 1 million-square-foot complex. The lease is set to expire in 2013, but Devon's operations will make a full move to its new headquarters at 333 W Sheridan Ave. by mid-2012.
Another longtime tenant, John Hefner, hopes to leave sooner. He moved his firm, The Hef
Hefner has seen the property pass through three owners. Now he's preparing to move his firm to the ground floor of the 2nd Street Lofts in Deep Deuce by spring.
“Our last hope was that with Milbank Real Estate going into bankruptcy, we would get a new owner who would be both able and willing to make vital repairs and restoration to this historic structure,” Hefner said. “However, the bankruptcy drags on to no avail.”
Though Hefner is in a separate part of the complex, he shares Devon's concerns and complaints.
“On Thanksgiving Day 2010, I had to come downtown quickly to get something I had forgotten,” Hefner said. “It took a security guard to get the elevator system to even come to life. He took me to the 25th floor and held the car. I was back in a flash. The doors ... slammed shut, and we were taken up to the 30th floor where operations stopped. We clawed open the doors, held them open for each other so we could get out, and they slammed shut behind us. We walked down 30 flights of stairs.”
A stream of tenants has left First National in recent years, including longtime arcade tenants Copeland's Office Supply (which closed), Becky's Hallmark, The Buzz Coffee Shop and the 5th Congressional District's local office.
Renovations launched in the arcade, meanwhile, have remained frozen for the past two years, with walls mostly consisting of unfinished sheet rock.
Yashouafar's investment groups filed for bankruptcy in October 2010 after lender Capmark won in its court effort to foreclose on the property. A couple months earlier, Yashouafar told The Oklahoman he believed First National was already a financial success story and dismissed claims he was a bad property steward.
“Through the financial resources made available by the owners,” he said, “the management team has been able to raise the occupancy from the low 20 percent range to almost 65 percent in just four years.”
Court transcripts indicate that financial stability may be in doubt, with about half of the property's income derived from the lease with Devon.
In court testimony this year, Keith Armstrong, a vice president with Capmark, argued Yashouafar's group won't be able to keep up with $1.5 million in debt service on the property after Devon's lease
Timm-Dobson said the owners will look into Devon's concerns.
“Devon remains a valued tenant,” she said.