Historic Palace Building downtown to be sold

The Palace Building at the corner of Fourth and Main streets is being purchased for $9.2 million.

“We want to be good stewards of Tulsa and of downtown and to do our part to continue the revitalization of downtown,” said Steven Watts, owner and cofounder of Rose Rock Development Partners, which is purchasing the building.

The sale by BH Media Group, former parent company of the Tulsa World, to Rose Rock is expected to close Wednesday. Watts said the transaction would not have been possible without Rose Rock’s lender, Mabrey Bank.

Built in 1913 by Russian immigrant Simon Jankowsky, the Palace Building has been home to a number of companies since Palace Clothiers closed in 1960.

The first five floors of the building were erected by Jankowsky, who had operated Palace Clothiers in Tulsa since 1904. Early tenants of the building’s upper floors included oilmen Josh Cosden, Harry Sinclair and C.J. Wrightsman. The addition of four floors in 1917 helped secure the refining headquarters of the Texas Co., now known as Texaco.

Palace Clothiers closed in 1960, and the building passed through several hands until it was bought by World Publishing Co. in 1997. 

The newspaper several years ago had planned to level the building — because of reported structural damage in the basement — and construct a paper-storage facility in its place.

But BH Media after taking ownership decided instead to spend $15 million on renovations and the building opened its doors in 2017 to apartment tenants.

“We have been working with them (Rose Rock) for a number of months to get this done,” said John Peters, a broker with Adwon Properties Inc., who facilitated the transaction.

“We had interest from all over the world. It was good that we could keep it in the family, so to speak,” he said of Watts being a local buyer.

The nine-story Palace Building contains 34 one-bedroom, 18 studio and eight two-bedroom units, including 18 apartments that are discounted for dwellers who meet certain income, debt and occupancy qualifications.

Each floor features color-themed doors and corridor beams. A community room with a kitchen and televisions are on the second floor. In the basement are men’s and women’s restrooms, bike racks and storage units for tenant rental.

In addition to the Palace building, the transaction also includes the Podium, an adjacent gray square structure that the Tulsa World uses as a paper storage facility, Watts said.

Watts said he planned to continue to lease the Podium building to the Tulsa World for its current use.

Two other retail tenants in the ground floor of the Palace Building — a Burger King and Taco Bueno restaurants — also currently have leases, although neither is currently operating at the location.

“We’ll have to get together and talk with them about what their plans are,” Watts said.

Other planned changes for the Palace Building include a gym area in the basement and improvements to the roof of the building.

He said the roof upgrades could include adding turf, shaded structures, live plants and fire pits.

Additional upgrades are planned for the apartment units, he said, including new lighting and window treatments.

Watts said he believed the deal was beneficial for both BH Media and his company.

“They (BH) don’t really own any apartment units and I think it was just better for them in dealing with some of their properties,” he said.

Rose Rock now owns several downtown properties including the Reunion and Adams buildings, and Vandever Lofts.

Watts said his company now is believed to have the largest number of apartment units in the Deco District of downtown, roughly bordered by Cheyenne and Detroit avenues, Seventh Street to the south, and railroad tracks to the north.