Appeal filed in Block 40 suit

File photo Cases in Payne County District Court, and possibly the Oklahoma Supreme Court, will decide whether the City of Stillwater properly handled removal of a deed restriction on the south half of Block 40, a tract of land across from the Stillwater Community Center. The City of Stillwater sold the land to the Oklahoma Wondertorium in 2009. The children’s museum sold the land to an LLC owned by businessman and former Wondertorium board member Russ Teubner in 2018. 

It looked like the cloud over a downtown land deal involving the City of Stillwater, The Oklahoma Wondertorium and Stillwater businessman and real estate investor Russ Teubner had lifted.

But that’s not the case.

Cory Williams, a Stillwater attorney and former state representative for District 34, filed an appeal to the Oklahoma Supreme Court on Friday. Williams is also a real estate developer who owns property in and around downtown Stillwater.

He had attempted to intervene on behalf of the taxpayers in a friendly suit between the City of Stillwater and Teubner’s Block 40 South LLC.

Associate District Judge Stephen R. Kistler denied Williams’ petition to intervene, ruling that the two-year statute of limitations had expired by the time the petition was filed.

In 2019, Williams also filed a qui tam or “whistleblower” petition with more than 130 signatures that demanded the City investigate the transaction, but the City filed its suit before Williams could submit his petition to the City Clerk.

The suit filed by the City of Stillwater on June 14 asked the court to establish that the City Council acted correctly in removing a reversionary clause placed on the deed to the city-owned property when it was sold to the children’s museum.

The clause stated that the land, located across the street from the Stillwater Community Center on the south half of Block 40, was meant for construction of a children’s museum. Title to the land would revert to the City of Stillwater if the Stillwater Children’s Museum Ltd., now known as the Oklahoma Wondertorium, failed to operate or ceased operating a children’s museum on it.

The children’s museum bought the land on Block 40 in 2009 for $77,500. At the same time, the museum agreed to give up a long-term lease on the former Katz Department Store and the option to purchase the building located at 7th Avenue and Main Street.

City Attorney John Dorman has said there was an additional intangible value in those relinquishments because they allowed a prime piece of downtown real estate that was sitting in disrepair to be redeveloped. The building now houses a restaurant, retail and office space.

The City also viewed building a children’s museum downtown as a form of economic development that would benefit the city as a whole, City Manager Norman McNickle has previously said.

The Wondertorium received $10,000 cash and a $20,000 credit toward its purchase of the land. The City of Stillwater carried the note at 5% interest.

The museum was only required to make interest payments for the first five years but that would be extended as the organization struggled financially.

The Wondertorium did not make any payments on the principal balance before it sold the land to Teubner’s Block 40 South LLC for $550,000 in 2018, Williams said.

Williams says he takes issue with the way the removal of the reversionary clause was handled by the City Council, voting on it as part of a consent docket instead of discussing openly.

He contends that when the decision was made, the value of the property exceeded $250,000 and according to the city charter, should have required passage of an ordinance or a vote of the people to sell if the City didn’t want it back.

Dorman has said the clause only provided for the possibility of reversion, which had “nominal” value.

Williams is automatically entitled to a review of his appeal by a panel but the Supreme Court may or may not choose to hear the matter. The appeal process will take 4-8 months, Williams said.

Williams says he isn’t fighting the sale because he has a problem with where the land ended up. He has a problem with how it was handled, in spite of possible benefit to his own business interests from any new development on the land.

“If something wonderful develops on Block 40, a rising tide lifts all boats,” he said. “But there’s no reason that can’t be done correctly … That doesn’t mean we get to just skip the process to get there.”

The original petition filed by the City of Stillwater still hasn’t been decided in Payne County District Court. That matter can now move forward, unless a stay is issued pending the outcome of Williams’ appeal, Dorman said.

Twitter: @mcharlesNP

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