This is another one Lou has scrubbed from the record. Vancouver offers few clues about City Hall City delivers inconsistent messages on the idea of buying The Columbian’s building Tuesday, December 2 | 10:44 p.m. BY JEFFREY MIZE COLUMBIAN STAFF WRITER Eight weeks after the city of Vancouver confirmed it might buy The Columbian’s office building, the city’s intentions are more unclear than ever. The city’s approach has been erratic at best. On the day Columbian Publisher Scott Campbell announced the newspaper was moving back to its former offices, City Manager Pat McDonnell said the city was serious about buying the six-story structure, 415 W. Sixth St., but wasn’t sure it could afford it. The following day, Eric Holmes, Vancouver economic development manager, said the city has $9 million set aside in a City Hall reserve account. Turns out the correct amount is significantly less, only $2.8 million, money it banked from the sale of the Citizen Services Center and Eberle buildings, across Broadway from City Hall. Two weeks later, city officials went out of their way to say there was no money in the 2009-10 budget for a new City Hall. Lloyd Tyler, Vancouver’s chief financial officer, told the city council on Oct. 20 that Vancouver will continue to look at reducing its lease costs, $1.91 million annually, from having offices spread across five different locations. But the city manager’s three-page executive summary, the first item in the city’s online budget, offers a different message. “I am recommending that the city move forward either with the construction of a new administrative facility or with the purchase of an existing facility within two years,” McDonnell wrote. “This action will result in significant savings for the city over the long term.” Public perceptions Concerns about public perceptions, along with differing opinions within the seven-member city council, are behind the city’s shifting and sometimes contradictory statements. Two council members, Tim Leavitt and Jeanne Stewart, have gone public with concerns or questions about the city buying The Columbian’s building, which is being offered for lease or sale. The asking price: $41.5 million. Mayor Royce Pollard, who commented extensively on the matter two months ago, declined to discuss a potential purchase recently. McDonnell didn’t offer much more. “We’re just exploring our options,” McDonnell said. “Our primary goal is to see if we can reduce our $2 million in leases.” The city has hired Eric Fuller & Associates as its broker for any property transactions. It also has appointed a six-person team of business and real estate leaders to advise the city. “That’s why this group is here, to help up sort through what’s best,” McDonnell said. “Maybe the best solution is do nothing. I’m fine with that. But I think we have to look at what the options are out there.” The Columbian’s current building is owned by Downtown Vitality Partners, a business held by the Campbell family. A faltering economy and plunging advertising revenue has forced the newspaper to eliminate 50 jobs this year and move back to its former offices, 701 W. Eighth St., on the weekend of Dec. 20-21. “This was a dream I had for us that simply didn’t work out due to some bad luck on timing,” Campbell said. “That’s the way business works. I will take a financial hit. I’ll take a financial loss, even if the building sells for the asking price.” Advantages On the surface, it makes sense for the city to buy The Columbian’s building. The city wants to consolidate most of its administrative functions under a single roof, and The Columbian’s 115,046 square feet of space is ideal for what the city needs. The Columbian’s building already has tenants on the fifth and sixth floors, which would give Vancouver time to slowly consolidate offices as its leases expire. Instead of leasing space, the city could use its money to build equity, much like a homeowner does by paying down a mortgage instead of writing rental checks. The city, through its government proxies, already owns the Hilton Vancouver Washington immediately to the east and would control a prime piece of real estate at the front door of the Boise Cascade waterfront redevelopment project. The Columbian’s building is certified as “gold” under the Leadership in Energy and Environmental Design rating system, a plus for a city that preaches the virtues of sustainability. And by purchasing a finished building, the city doesn’t have to worry about cost overruns or fluctuating prices for steel and other construction materials. Although a purchase makes sense on some levels, it remains politically and financially iffy. First, there is the appearance of a cozy business relationship with a newspaper that is supposed to be City Hall watchdog, not accommodating business partner. Second, the city is struggling with its own financial troubles and just completed a painful budget session where programs and employees were sacrificed to devote dollars to police, fire and waterfront redevelopment. If the city doesn’t have money to build roads to ease mounting congestion or replace fire stations susceptible to earthquake damage, how can it afford to house its employees in one of downtown’s poshest buildings? Finally, there are questions if The Columbian’s building is worth the money. The asking price, $41.5 million, is 87 percent higher than the $22.19 million value listed on county tax rolls. The sales price does not include the main parking lot, on the southwest corner of Esther and Sixth streets, or the vacant grass-covered lot south of the building and north of Fourth Street. Assessor Linda Franklin said that value was based on the building being 90 percent complete. Even if the building’s value is adjusted up to reflect it being 100 percent complete, so the building and land are worth a combined $24.52 million, the asking price is still 69 percent higher than assessed value. Franklin said the value was set primarily using a cost approach, which is used only for new structures. A county appraiser collected information on construction costs, including data supplied by The Columbian itself, and put it into a computer system to come up with an estimate for how much it would cost to build the structure. Franklin said county appraisers also used an income approach, which examines how much money the building can bring in from rent, to verify the figure derived through the cost approach. “They just don’t take one number and say, ‘OK, that looks good to me,’” she said, adding that the county’s income value was “consistent with what The Columbian had given us, as well, for cost of construction.” But Campbell said he believes the assessed value is “very low.” One recent appraisal, based on current market conditions, placed the property’s value at $35 million to $36 million, he said. The Columbian broke ground on its current building in March 2006. In its news stories, the paper repeatedly referred to the building as a $30 million project. Campbell said that figure was only for construction and did not include land acquisition, design, financing and other costs. He declined to provide a total figure, except to say that Downtown Vitality Partners spent “well in excess of the asking price on this project.” Campbell said he just as soon would not sell to the city. “Generally speaking, I don’t like doing business deals with municipalities or other public entities,” he said. “We are best served by having an arm’s length relationship. But on the other hand, the building is for sale, and I will seriously consider all legitimate offers.” Jeffrey Mize: 360-735-4542; jeff.mize@columbian. columbian/article/20081203/NEWS02/712039961/-1/NEWS
Posted on: Tue, 05 Aug 2014 16:37:41 +0000
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