The highly publicized $29 million Braniff Towers project in downtown Oklahoma City hit an impasse Thursday as developers filed a lawsuit against property owner Kerr-McGee.
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The development, which was announced by both sides in November, was to include construction of a 400-space parking garage and conversion of three buildings on the Kerr-McGee campus into upscale condominiums. The project was named the Braniff Towers because one of the buildings was once the corporate headquarters for long-defunct Braniff Airlines.
"We expected to close today," said Anthony McDermid, one of the project's lead developers. "It didn't happen. It was a surprise to us. We spent a significant amount of time and resources on this."
A lawsuit filed Thursday in Oklahoma County District Court by McDermid and his partners allege they will suffer more than $8 million in damages if Kerr-McGee does not honor its part of the redevelopment.
The lawsuit discloses talks with Kerr-McGee soured after it announced June 23 that it was being sold to Houston-based Anadarko Petroleum. At the time of the announcement, Kerr-McGee Chief Executive Officer Luke Corbett told The Oklahoman he was committed to completing the Braniff Towers project.
But the lawsuit filed by McDermid's partnership, Corporate Redevelopment Group, alleges Kerr-McGee launched a campaign to thwart completion of the development and that company representatives stated Anadarko Petroleum wasn't interested in the project.
The lawsuit also alleges Kerr-McGee "ceased to act in good faith" in development talks.
Kerr-McGee shareholders approved the sale Thursday, and all Kerr-McGee property, including the towers, are now owned by Anadarko Petroleum.
John Christiansen, Kerr-McGee spokesman, said blame for the deal's collapse rests with Corporate Redevelopment Group.
"We have an existing contract with Corporate Redevelopment Group to build a parking garage that would be suitable to Kerr-McGee," Christiansen said. "After completion of that garage, Kerr-McGee has agreed to deliver to Corporate Redevelopment Group the certain properties identified for redevelopment. We are willing to perform under that contract."
Christiansen said Corporate Redevelopment Group requested changes in the contract conditions -- changes he wouldn't disclose -- that were not acceptable to Kerr-McGee.
"We believe we worked with Corporate Redevelopment Group in good faith, but we believe we've hit impasse on certain terms and conditions requested by Corporate Redevelopment Group."
Neither side would further discuss the dispute. The towers were to be the first for-sale housing in downtown's Central Business District.
Dave Lopez, president of Downtown Oklahoma City Inc., said he still has high hopes that the Central Business District will see an infusion of for-sale housing in the near future.
"I'm hoping there is still a way we can utilize that land for continuing the legacy of Kerr-McGee downtown," Lopez said. "We hope that someone will create new space there, whether that's residential, or if the new owners set a fair price on it for it to be brought up to the standards the market demands now for Class A office space."
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Braniff Towers The Braniff Towers were the jewel of the proposed redevelopment of properties owned by Kerr-McGee, but a contract included in Thursday's court filing shows the deal included several other important holdings downtown and along the Oklahoma River.
The condominium development was to include Kerr-McGee's three oldest downtown buildings with space totaling 270,000 square feet:
111 Robert S. Kerr Ave. is a seven-story, 38,736-square-foot building built in 1902. The property was a temporary home to the Legislature for four years.
135 Robert S. Kerr Ave. is an 11-story, 155,911-square-foot building built in 1921 that was once Kerr McGee's headquarters.
324 N Robinson Ave. is a 10 story, 75,584-square-foot building built in 1923 that was once home to Braniff Airlines.
The contract also included surface parking lots the company owns along Broadway between NW 4 and NW 6, and 70 acres along the south shore of the Oklahoma River between Walker and Western avenues.
As of today, with the sale of Kerr-McGee to Andarko Petroleum, all of the properties cease to be locally owned and are part of the transfer to the Houston company.
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