Change of tender: City hall building now for sale
Hold the phone. In its quest to move toward owning a city hall, officials are considering buying the South Lake Tahoe Council Chambers building it now leases, which has been listed for $1.6 million.
The latest development may throw a wrench into the city’s $850,000 temporary, tentative move in May to the Lake Tahoe Airport, a structure it owns and may start remodeling if it awards the bid to a contractor as planned this week.
City Manager Dave Jinkens said Monday staff is preparing a report due Thursday, when a special meeting is planned at 1:30 p.m. at the airport to discuss the matter. A tour of the aviation facility will be available to the public. The city is exploring the cost-benefit ratio of buying the 7,452-square-foot building that also houses 21 employees in Planning and Building Departments versus moving to the airport.
“We’re looking at the possible purchase. Before, he was not willing to sell,” Jinkens said.
The city wants to escape the high cost of rent. Its 10-year lease with Carson Valley resident William Floyd ends in February. The property owner was raising the $120,000-a-year lease to $150,000 and requiring the city to sign another three-year lease, which facilitated the drive to get out of the building. The city is renting the building on a month-to-month agreement in March and April.
“He said he wanted a long-term lease,” Mayor Hal Cole said, adding he was a bit surprised by the news the building was for sale. “We’re looking into whether it makes sense. All things being equal: Is that where we want to be?”
Still, either choice to stay put or move to the airport could be temporary. The city wants to eventually consolidate its offices at a joint-use facility, possibly on Lake Tahoe Unified School District land, and share the space with the district and El Dorado County.
Cole and other city officials wondered why the option wasn’t open to the local government when the parties talked about the lease expiring.
Times have changed. Floyd’s agent, Darrel Page of Remax in Carson City, said his client at age 78 had a change of heart about leasing the building and decided to build a nest egg.
“They did ask to buy it, but (Floyd’s) trying to improve his situation,” Page said.
The Nevada real estate agent, who’s listing the California commercial property with Peggy Eichhorn of Coldwell Banker, McKinney & Associates, advocates the city buying the property.
“I can’t imagine (the city) passing up this opportunity. There’s a huge short supply of good buildings,” he said.
Page is convinced the building will be sold by the time May rolls around. For one thing, there are few commercial buildings for sale in the city that many investors are seeking – especially one that has a backup generator. It’s priced at $213 per square foot. Commercial property increases at a rate of between 2 to 3 percent, according to Eichhorn, who specializes in this type of real estate.
Pat Martin, who serves as the chairman to the Citizen’s Alliance for Responsible Government, said he recommends the city buy the building because, like Page, he believes the city will come out ahead financially.
No one has ventured a guess as to how much it would cost to build a joint-use facility because a concept doesn’t exist.
“And you know construction projects always go over budget,” Martin said.
Meanwhile, city staffer Bill Williamson said his public works department has conducted some demolition to the airport terminal to make way for the 21 staffers in city administration. In a musical chairs of sorts, the city is relocating planning and building to the city administration building on Tata Lane that it also owns. Williamson estimated the city has spent about $2,000 so far.
He expects the City Council will award at its special meeting this week the airport renovation job to the lowest bid given by DML Construction for $682,110 – more than $150,000 over the engineer’s estimate. The project includes more demolition and work to the electrical system, painting, laying carpet and cabinetry, among other things.
City move versus staying put
* Total estimated cost of move to airport: $850,000
Of that: $682,110 to the contractor ($158,614 over engineer’s estimate)
* Estimate of amount the city has spent: $2,000
* Cost to build joint-use facility: no estimate
* Or, cost to buy the Council Chambers building: $1.68 million
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