Wall Street Journal

Boone Pickens’s Gift
To Oklahoma State
Sparks Local Rivalry

Some Neighbors Jeer Plans
For Huge Sports Complex;
Lampooning the Largess
March 30, 2006; Page A1

STILLWATER, Okla. — Boone Pickens has seen legendary fights over oil and corporate takeovers. Now, a giant gift to help his alma mater build a huge sports complex — and a winning football team — has plunged him into a different kind of battle, with residents of a low-income neighborhood.

Mr. Pickens’s recent $165 million contribution to build new sports facilities at Oklahoma State University is the largest single donation made to a U.S. collegiate athletic program and more than half the size of the university’s entire endowment.

OSU wants to use the money to expand its football stadium and build an “athletic village” complete with practice fields and new stadiums for soccer, baseball and other sports. But to do so, it will have to clear out a large residential area adjacent to the campus.

The university owns part of the 100-acre tract and is offering buyouts for the rest — deals that have some people balking and refusing to leave. The plan puts Mr. Pickens at the center of a skirmish featuring tenants, property owners and the university.

Last month, community members packed the local library to hear OSU officials present the latest details of the plan, which is backed by the state’s power of eminent domain. Some attendees cried, and others groaned. A question-and-answer session with OSU President David Schmidly drew boos and emotional exchanges from the crowd.

“My house and my home is my special building,” said longtime resident Liz Doyel. “You’re trying to steal it.”

“I’m not a thief,” Mr. Schmidly replied.

Calvin Anthony, a pharmacist and chairman of the local Chamber of Commerce, supports the plan because he believes it will be good for both the school and local business. He told people in the crowd they should thank Mr. Schmidly for meeting with them despite the intense opposition. “He may feel like a long-tailed cat in a roomful of rocking chairs,” he said.

Here in Stillwater, a city of 39,000, the plan stands to affect hundreds of people — from students to pensioners — who say they can’t afford higher housing costs. OSU says 550 students currently live in the neighborhood, but it is unable to provide total population figures. According to geoVue Inc., a company that culls demographic information for commercial real-estate searches, there were 1,315 people living in 725 housing units in the area as of 2004. The median household income of those over the age of 25 was about $20,000 as of 2000.

Mr. Pickens, 77 years old, isn’t sentimental about razing the neighborhood. “You look at it and think ‘Gosh Almighty, we’ve got to get this stuff out of here,’” he says. “I mean, it’s so bad looking. Those houses are in horrible condition.”

On March 3, the Board of Regents unanimously approved the athletics plan, which calls for the demolition of many properties by year’s end. About one-fifth of the owners, however, still refuse to engage in price negotiations — and some have threatened to stand up to the bulldozers. Mr. Pickens, meanwhile, says he recently met with university officials to discuss how to speed up the process. “It’s gonna get done so we might as well get at it,” he says.

Over the past 25 years, Mr. Pickens has given about $250 million to OSU. The bulk of contributions were in the past three years, with about 80% of the total earmarked for athletics.

Mr. Pickens, whose spokesman says he has a net worth “in excess of $2 billion,” made his fortune running the Irving, Texas-based Mesa Petroleum Co. (now called Pioneer Natural Resources Co. and unaffiliated with Mr. Pickens). In the 1980s, he earned fame attempting corporate takeovers.

An Oklahoma native, Mr. Pickens first attended Texas A&M. The school took away his basketball scholarship — “I wasn’t good enough,” he says — so he went to Stillwater to enroll in what was then Oklahoma A&M. Mr. Pickens tried out, unsuccessfully, for legendary coach Henry Iba’s basketball team. In 1946 it was the last OSU squad to win a national basketball or football championship. He graduated in 1951 with a degree in geology.

A rendering of the expanded OSU Boone Pickens Stadium, now under construction.

Today at OSU, Mr. Pickens’s influence extends well beyond the treasury. Last year, the billionaire recommended the appointments of football coach Mike Gundy and Athletic Director Mike Holder. The latter is a longtime quail-hunting buddy of Mr. Pickens who was formerly the school’s golf coach. While Mr. Schmidly, the university president, says Mr. Pickens has no veto power over any decisions, he acknowledges that the appointments “had a lot to do with Boone gaining confidence” to make his record contribution.

That happened just after Christmas of 2005. Mr. Holder met with Mr. Pickens in his Dallas office to pitch the idea for a sports complex, to be built near Boone Pickens Stadium, the football facility named for him in 2003. Mr. Holder had been angling for a big donation, throwing out numbers Mr. Pickens called “ludicrous.”

A day after the meeting, Mr. Pickens wired $165 million to the university, enough to cover more than half of the $300 million project’s costs. The funds were almost immediately invested in a hedge fund controlled by Mr. Pickens — a move that drew some criticism and was the subject of a New York Times article. Mr. Pickens says the fund has waived all fees.

Chris Stellman, an OSU senior who would be displaced by the project, created an online comic strip lampooning the university as “Boone State” and featuring Mr. Schmidly bowing to Mr. Pickens’s every whim. One strip depicts Mr. Pickens talking about building the football team a day spa.

Although some locals resist the plan on principle, others are haggling over price. Opponents say OSU is offering owners about 70% of the assessed value of their properties. They complain the university has them over a barrel by threatening to use eminent domain, the legal process that allows government-related entities (including public colleges) to appropriate private property for the public benefit.

The university says it doesn’t want to use eminent domain, though will as a “last resort” if property owners refuse to sell, Mr. Schmidly says.

County assessor Jacquie Rose describes OSU’s offers for property in the area, where the median home price is about $70,000, as “low.” Mr. Schmidly counters that the assessed values are too high. Instead, the university’s buyouts prices are equal to 105% of its own appraiser’s estimates. The university is also paying a “longevity bonus” to homeowners based on years of occupancy, plus moving expenses.

If Mr. Pickens’s largess boosts OSU’s football team as he hopes, he and university officials expect other benefits to follow — in both sports and academic programs. At rival University of Oklahoma, about 70 miles south, a national football championship in 2000 spurred a $110 million fund-raising campaign that renovated and expanded its stadium, according to school officials there. Applications for enrollment soared and the school had to turn away students for its incoming freshman classes for the first time.

Ryan Chittum
The Wall Street Journal
200 Liberty St., 12th Floor
New York, NY 10281

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9 Responses to Wall Street Journal

  1. Lee Agnew says:

    “You look at it and think ‘Gosh Almighty, we’ve got to get this stuff out of here,’” [Pickens] says. “I mean, it’s so bad looking. Those houses are in horrible condition.”

    I hope this incredible piece of arrogance is spread far and wide over Stillwater and gets the reaction it deserves.

    Or should we apologize for the fact that our “Good Old Town” doesn’t meet Pickens’ standards?

    Of course some of the property has not been well maintained — especially those units owned by out-of-state absentee landlords. And when a large and expanding institution impinges on a residential area, banks and lenders often feel “why bother?”

    But a lot of the property still looks pretty darn good, thank you very much, considering everything. I took some pictures last weekend. Perhaps people should judge for themselves: http://geezerlee.livejournal.com/71403.html

  2. Tamara Colbert Maschino says:

    Lee, Thank you so much for visiting my mom, this has been so hard for her. It was nice to see the pictures, she is so proud of her home and yard and will miss all the plants she has in her yard. We are going to try and save as much as possible. It is a beautiful neighborhood and people do care about their yards and homes. I was insulted by Pickens quote in the Wall Street Journal and sent a reply, dont think they will print it , but had to do it.

  3. Tamara Colbert Maschino says:

    My reply to the Wall Street Journal:

    Mr. Chittum:
    I read your story today concerning the Athletic Village expansion. My mother is 78 years old and has lived in her home for 57 years. Her home’s location is slated for a pair of twin lakes adjacent to the Tennis Center. I take exception to Mr.Pickens charactization of the homes as”needing to be torn down”. Her home has been lovingly maintained for nearly six decades and she has spent nearly $50,000 in the last ten years on upgrades such as landscaping, new roof, new carpeting, an almost total remodel. In the area she is located in are 40 plus longtime homeowners who have lived there for many decades.

    This has been a traumatic experience for homeowners, they have been treated with an incredible lack of respect. Most of these homeowners were avid OSU supporters and many are retired from OSU from all areas, they did not deserve this. After four months of uncertainty, we had to settle with OSU, my mother’s health began to show signs of trouble. We are angry with the University, they could have done so much more for homeowners. We discovered at closing, that OSU had researched the abstracts on my mother’s property, eight months prior to the closing. They only informed my mother by letter, four months prior. They could have let the community know what was going to occur, they could have set up relocation teams to assist with moves, help find adequate homes,etc, the bonus they paid of $300 is a joke, that will not begin to cover the taxes, house insurance and mortgages most of these seniors will have to pay on new homes. My mother’s home had been mortgage free for 30 years, we are moving her to a new home in two weeks and to a new mortgage. This project was planned long before November 2005, this must have been in the works for at least one to two years. They have given no help on helping seniors on their moves, nothing, these people have been left to fend for themselves. It is disgusting and I fail to see how a lake on my mothers property will help educate young minds. That should be the goal of this university, not taking peoples homes.

    Tamara Colbert-Maschino

  4. Russell says:

    I would love to know if you get a response to the letter you sent or that it was published in the WSJ …

  5. Leonard G. Herron III says:

    Tammie, I hate to hear that your mother is being forced out. I told Mr. Clarke that my mother and sister at 1110 N. Bellis would not be able to even consider a move until at least two years after the death of my father who will be 90 on the first of June. The offer that they received was about $20,000 below the current Payne County fair market value. We have told them that the property currently is not for sale. Mr. Clarke told me that he didn’t believe that OSU would use eminent domain on my parents. I hope his statement is correct. After a while one would think that one would get use to the arrogance of these people but I am having a difficult time.

    Leonard G. Herron III

  6. Tamara Colbert Maschino says:

    I did get a response from the Wall Street Journal, Mr. Chittum sent a kind note, I am not sure if they published my letter yet.

  7. Tamara Colbert Maschino says:

    It is a sad time for our neighborhood, I am sorry our folks are having to deal with this mess at this time in their lives. They have too much to deal with just living and dealing with illness without being worried about losing their homes of decades. I am not sure I will be able to forgive the University for doing this to our families.

  8. Lee Agnew says:

    I hope somebody sends something to the News-Press about the Pickens quote, for the benefit of those who don’t read the Wall Street Journal regularly. Hint, hint?

  9. Beverly Kargel says:

    Ann, My friend, Vona Parrish just called. She will close with OSU Friday. She asked me to pass this on. Yesterday she received a letter from atty John Severe offering an hour of free consultation on eminent domain. She was sorry she missed the opportunity but wanted to pass the information along to anyone who could still use it. I know a lot of people come to you for help and you may already have this information but just in case. I voted for mayor today for the first time ever. Beverly

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