A series of land transactions in downtown Stillwater have paved the way for both opportunity and controversy. Some in the community are questioning whether the City of Stillwater handled the transfer of a tract of city-owned land properly and protected the public interest.
Real estate developer and former State Representative Cory Williams is circulating a voters’ objection petition to force the City of Stillwater to investigate whether business dealings involving Block 40, a tract of land located across the street from the Stillwater Community Center, were handled correctly. He says it’s the first step in asking the city to rectify the situation.
Now the Stillwater City Council has scheduled a special meeting to discuss the matter.
It will enter executive session at noon Friday to speak with the City Attorney about a pending investigation into transactions involving the south half of Block 40 and Block 40 South, LLC, the corporation that now owns it.
City Manager Norman McNickle said the City Council is not looking into any wrongdoing by Block 40 South, LLC but needs to address questions about the transaction itself and get a determination whether it was handled correctly.
Block 40 South, LLC principal Russ Teubner said he understands that.
“I think it’s really important for this issue to be clarified on a timely basis,” he said. “Not just for the city and Block 40 South but for the Wondertorium.”
In 2009, the Oklahoma Wondertorium bought the south half of Block 40, located directly across from the Stillwater Community Center, from the City of Stillwater.
The announcement of a new Warren Theater that many assume would be built on Block 40, has drawn attention to the property and how it came into play for redevelopment.
The City of Stillwater bought the south half of the block in 1999 in the hopes of developing a cultural corridor along Duck Street that would connect downtown to the Stillwater Public Library.
City Attorney John Dorman previously told the News Press that the Wondertorium bought the land in 2009 for $87,5000 but the deal also factored in other intangible considerations, like the value of a lease held by the Wondertorium on the former Katz Department Store, the value the City of Stillwater would realize when it sold that building to a developer for $580,000, the value of bringing a new business to downtown that would encouraging further redevelopment and the fact that the owner of the Katz building had not been willing to sell to anyone but the children’s museum.
The former downtown anchor had been sitting vacant for years until the Wondertorium entered the picture.
A reversion clause, which stated that the land on Block 40 would revert to the City of Stillwater if the Wondertorium stopped using it as a children’s museum, was added to the sales agreement. The agreement didn’t require that a museum be built within a certain time frame and as the Wondertorium struggled to find its financial footing over the years, the dream of building on Block 40 faded.
Past board president Katrina Jarvis said it became clear over time that the Wondertorium couldn’t afford to build there. The museum also badly needed operating funds to stay alive.
The Wondertorium approached the City Council several times over the years about removing the reverter clause, because it kept the museum from even being able to borrow against the value of the land, Jarvis said. The board questioned why the reverter clause had been added when the museum was buying the property for a not-insignificant amount and gave up a valuable lease, enabling the city to sell the building for a profit.
The board approached the council again in 2017, because it wanted to use the land as collateral for a loan, and this time the council agreed to remove the reverter clause.
It was passed without public discussion as part of a consent agenda on April 17, 2017.
One year later the Wondertorium sold the tract to Teubner who already owned the north half of the block along with some partners and wanted it consolidated for potential redevelopment.
Some residents have expressed concerns about the prospect of a private developer profiting from land formerly owned by the city and sold at what they see as a discount to a non-profit for the public good.
They say they believe the land was valued at more than $250,000 when it was sold and under city ordinance a vote of the people should have been required before the City of Stillwater could sell it.
Others say the reverter should not have been removed.
Williams says he believes others have profited or stand to profit at the expense of taxpayers.
For the situation to be handled properly, he believes the Wondertorium would have to give back the $550,000 it received from Teubner for the Block 40 tract and either build a children’s museum there or walk away, giving the land back to the city and foregoing any money it has paid on it.
He says he is close to having the 100 signatures necessary to require an investigation into the matter.