Strawberry Fields OKC developer is below securities investigation
Strawberry Fields developer Pat Salama has been banned from promoting securities for six months and ordered to compensate early buyers amid a authorities investigation into actual property dealings between Salama and her firm.
Representatives of the Oklahoma Division of Securities informed The Oklahoman on Monday that an investigation is underway into Salama’s oversight of Strawberry Fields, a proposed growth west of Scissortail Park.
They declined additional remark, however the securities investigation report exhibits Salama used $55,000 in financing from Strawberry Fields buyers on Might 15, 2015, to purchase a property for herself after which bought it to Strawberry Fields on Might 31, 2016, for $412,000. greenback.
The report was included in a lawsuit filed by buyers final week in opposition to Salama. The buyers declare the acquisition of the Salama property at SW 5 and Dewey Avenue was financed by 412 membership models bought at $1,000 every.
Salama stated the considerations raised by securities investigators arose from paperwork she supplied and had been resolved in a settlement settlement. She stated she found she had “inadvertently” commingled private and firm funds in reference to the one strawberry. She stated she paid the cash again instantly.
“A very powerful factor is that the settlement with the (Securities Administration) has no influence on Strawberry Fields, LLC, or its skill to maneuver ahead with growth,” Salama stated in a press release to The Oklahoman.
Investor says findings from Securities Division investigation into strawberry fields are ‘tip of the iceberg’.
Rick McCormick, a former faculty basketball coach and one of many early buyers, informed The Oklahoman that the findings of the SEC’s investigation are “the tip of the iceberg.”
He added: “We felt that there have been irregularities, and a number of the issues being completed had been unlawful, and we requested them (securities investigators) to look into this matter. That is a part of the outcome.”
Salama started buying and clearing property in Strawberry Fields, previously referred to as Orndale Addition, in 2014 and has since amassed greater than 50 acres within the space between Scissortail Park, Shartel Avenue and Oklahoma Metropolis Boulevard.
A gaggle of 23 buyers, greater than half of whom characterize three households, filed a lawsuit in opposition to Salama for allegedly refusing to carry the challenge accountable and requested the choose to take away her from the place of challenge head.
“These are the household and associates who gave the primary $1.5 million to this challenge,” McCormick stated. “A few of these folks have put their final financial savings into it. Some have died within the final eight years. Some are aged and have severe medical situations and might’t afford drugs.
After listening to 12 months after 12 months that “one thing huge” was about to occur, McCormick stated buyers requested to see Strawberry Fields’ data and discover out its precise holdings.
“It would cancel conferences,” McCormick stated. “Some folks drove right here and I refused to satisfy with them. Everybody signed a notarized letter asking this group of individuals to have the ability to overview data. It was fully ignored. Nobody wished to rent an lawyer and begin litigation.”
In earlier feedback to The Oklahoman, Salama denied the allegations, saying her accounting agency, Hogan Taylor, sends quarterly monetary experiences to buyers by way of safe electronic mail. She additionally stated she invitations buyers to take a look at the books in individual.
Salama stated that the plaintiffs, represented by lawyer Tony Gould, characterize 6.4% of buyers in Strawberry Fields. Lead investor Richard Anderson, who owns 35.8%, confirmed receipt of the quarterly experiences and defended Salama’s oversight of the event.
A historical past of delays in creating strawberry fields in OKC
The event has gone by way of a collection of delays as Salama continued to accumulate and clear properties with out beginning any development work. It utilized for $16 million in tax increment financing help in August 2022 for a complete challenge funding of $1.5 billion.
Kathy O’Connor, a challenge advisor on the time of the appliance, stated the primary part of development would start in 2023 with 4 initiatives:
- Lucya $24.7 million, 54,500-square-foot workplace constructing to be constructed at SW 3 and Walker Avenue.
- marketthe restoration of a two-story constructing inbuilt 1940 that will likely be a mixture of retail and leisure.
- Monasterya $61.3 million, 266-unit residence complicated at SW 6 and Lee Avenue that can embrace 20% of the models as workforce housing.
- A ten-unit residence complicated at SW 6 and Dewey Avenue.
Building has not but begun, and no constructing permits have been submitted to the town. The overview committee had initially beneficial the tax enhance financing request, nevertheless it faltered as buyers pressed their claims in opposition to Salama.
“We’ve got been negotiating for a while with Strawberry Fields, however there have been some contract phrases that we couldn’t agree on,” stated Joanna McSpadden, the town’s director of financial growth applications. “We’ve got stopped negotiations. They can come again and request funding for particular person initiatives as they arrive on-line. However the infrastructure request shouldn’t be transferring ahead.”
McCormick stated he was drawn to the event after seeing plans for a conference heart, streetcar and Scissortail Park inside strolling distance of Strawberry Fields.
“Until modifications are made, this might proceed for an additional eight years,” McCormick stated. “It is necessary that the town sees progress and that this challenge strikes ahead.”