Oklahoma Health Care Authority should be in its new digs — next door to its former home on Lincoln Boulevard — by early 2014, developer Richard Tanenbaum said Friday.
Gardner-Tanenbaum Group started rehabbing for the former Lincoln Plaza Hotel, 4345 N Lincoln Blvd., earlier this year after months of nipping and tucking plans to suit the state agency finally ended with a lease contract, CEO Tanenbaum said.
The developer is gutting the old three-story hotel to the studs and will rebuild the space from the inside out.
When finished, the transformed property will also be larger, a total of about 160,000 square feet, thanks to a 35-foot-deep addition across the front, which faces Lincoln Boulevard.
The health care authority, now leasing a comparable amount of space at Shepherd Mall, issued a request for proposals for new office space almost a year ago. The agency's eventual relocation rattled already troubled Shepherd Mall, against which foreclosure proceedings began March 1. However, the agency apparently never intended to remain at the mall for long.
Oklahoma Health Care Authority previously leased space just north of the Gardner-Tanenbaum property at Lincoln Plaza Office Park, 4545 N Lincoln Blvd., which also fell into foreclosure just last week. That property never recovered from a massive hailstorm May 16, 2010, that caused such extensive damage the health care authority had to move out, leaving it nearly vacant.
Tanenbaum said he will spend around $19 million renovating the building for use by the health care authority. It will cost another $7 million or so to convert a second building, with seven floors, attached by a skywalk. Larry Cody, vice president of construction, said the second building is being marketed to both state and private office users.
Gardner-Tanenbaum paid $2.6 million for the two former hotel buildings on 18 acres in August 2011. Financing was by Doug Morris of Stillwater National Bank with funding through Metropolitan Capital Advisors in Dallas.
Tanenbaum said he had several ideas for alternative uses for the property, but that he never intended to convert the hotel to office space.
“We had a three-prong attack,” he said. “One was the obvious: hotel. We brought in hotel people — but I'm not in the hotel business. They didn't want to be at risk; they just wanted a bunch of fees. It was going to be like $35 million and I'd have had to wait years before I got my money and I didn't understand — so we stepped away from that.”
Another possibility, Tanenbaum said, was some kind of student use, either for housing or as a campus, but pitches that he made to the University of Oklahoma Health Sciences Center and the School of Hotel & Restaurant Administration at Oklahoma State University came to nothing.
He said the third possibility was housing, perhaps apartments or senior housing — but when the health care authority went looking for a new place last year, Gardner-Tanenbaum submitted a proposal to the agency's liking, and the property's future was set.
“You've got to buy it right, which I think we did: 18 acres on Lincoln. The land was worth the purchase price,” he said.