DALLAS — The Oklahoma City Council voted Tuesday to issue a $2 million, 10-year note to finance aesthetic improvements to a system of pedestrian tunnels linking buildings in the downtown.
The council, acting as the Oklahoma City Public Property Authority, agreed to issue the taxable note and turn the proceeds over to Downtown OKC Inc., a private agency that will oversee the work.
The note will be supported by annual assessments on businesses that front onto the three-quarter-mile long tunnel system, according to Brent Bryant, business manager for the city’s finance department. The renovation project has been approved by owners of 85% of the property involved, he said.
“We expect to have the project completed by February 2007, with the first of 10 annual assessments going out in August 2007,” Bryant said. “For these type of improvement districts we could assess based on total property value, but in this case the assessments will be based on how much of the property actually fronts onto the downtown tunnels.”
The Public Property Authority’s outstanding debt includes $52.8 million of hotel revenue bonds issued in late March 2005 to finance renovations to the equine facilities at the State Fair of Oklahoma. The bonds were rated A2 by Moody’s Investors Service and A-minus by Standard & Poor’s.
The authority received four bids on the note, Bryant said, with Banc of America Leasing & Capitol LLC being selected. The debt will carry a fixed annual interest rate of 6.364% that includes a bank spread of 1.644%. The annual rate is based on the March 2006 average for the 10-year constant maturity Treasury note plus the bank spread.
The transaction is slated to close May 11, Bryant said, with construction beginning soon afterward.
The tunnels were built in the 1970s and 1980s, and are known as the Conncourse in honor of Jack Conn, a long-time Oklahoma City banker and one of the founders of Bank of Oklahoma. The renovated system will be renamed the Underground when the project is complete.
The tunnels are decorated in the style of the time, with brown, pink, white, and blue 1970s-era geometric shapes and parallelogram-shaped mirrors wrapped in rope lights.
“Right now, the tunnels’ main function is to keep people out of the weather when it is hot or cold,” said Alison Oschel, vice president of operations for OKC Downtown. “We want them to become destinations in their own right for people and groups interested in history and the arts. It will be more like a museum.”
Oschel said the renovated tunnels will feature traveling art exhibits, historical photographs, and gallery lighting that should prove more pleasing.
“We’d like to have some retail down there, and some destination restaurants that people will come downtown to eat at,” she said. “Back in the oil boom, we had lots of retail, and we’d like to attract some of that back to downtown.”
Oschel said the tunnels connect more than 30 buildings, and the system includes several sky-bridges. The current project does not include any expansion of the tunnel network, she said.
