Action postponed for third time on purchase of office building

By Bill Short

For the third consecutive month, the Oakland Board of Mayor and Aldermen has unanimously postponed the purchase of an office building at 70 Clay St.

Board members made that decision again during their Aug. 16 regular monthly meeting on a motion offered by Alderman Maggie Powers and seconded by Alderman Karl Chambless.

At the board’s April 17 monthly meeting, City Finance Director Pam Walker said there had been some discussion about moving the administrative offices from City Hall into space that would be rented at 70 Clay St. and the first two bays in Tommy Johnson’s building. She said the offices of the mayor and Human Resources director might possibly be moved into the second bay.

The administration has been approached by the Tennessee Department of Corrections about renting some space from the town. Noting that the “parole people” have been coming into City Hall only one day a week, Walker said they want space that they can use all five days.

By renting them some space in the facility that houses the Oakland Building and Codes Enforcement offices, she said that would generate some revenue that would cover the cost of renting the space on Clay Street and in Johnson’s building.

Walker said the Building and Codes Enforcement employees would move into the space at City Hall that currently houses the administrative offices.

When Alderman Chuck Wombough asked whether the Department of Corrections has mentioned how much it would pay to rent the space, Walker said it was discussed.

“They were wanting two offices, and they would be ecstatic if they could get three,” she noted. “So, we showed them space, and they were very excited about it.”

Walker said she suggested a rental amount to the Department of Corrections, which will be discussed by the department supervisors.

She said there are a total of 1,800 to 1,900 square feet in the two bays in Johnson’s building. And the monthly rent is $2,000, including utilities, which Oakland Building Official Walter Owen considers “very reasonable.”

To renovate the facility for the town’s needs, Walker has said it will cost $1,800 to $2,000 to install a front counter in the first bay.

“There are four offices already in the second bay,” she has noted. “And I think, right now, those could be used as they are. Possibly, two walls could be knocked out and another wall put up to make one space a little bigger, but no major renovation.”

Because City Hall is “overcrowded,” Wombough has acknowledged that the town needs “that space over there” for its administrative duties. And he said the fact that the Parole Board is willing to rent some space in the Annex building will help offset the cost of the rent.

Walker has said Johnson’s building has been appraised at $410,000. Wombough has said the appraisal basically answers all the questions the board had about the “viability” of the building and also mentions the income that would be generated by it for the town.

He also said the appraisal made clear that it would make more sense to purchase the building than to rent space in it.

Powers has noted that, if the board purchases the building, it will become the property of the town and will be taken off the tax rolls.

At the board’s July 19 meeting, Wombough said purchase of the building is contingent upon verification that the lease agreements are valid. Chambless said the board needs to do a title search to make sure the property is “properly available,” and that it is a “legal entity to sell.”

While noting that the board has also discussed warranties, Chambless said he is not sure whether that is a viable option. He also said there should be some kind of “follow-up protection,” because the seller has declared that the board will buy the building as it is.

“We’ve based this purchase primarily on the fact that revenue is going to cover the cost,” he said. “Consequently, I’d hate to think that we make the deal and, a month later, everybody moves out, and we’re left holding the bag.”

Powers said she does not think it is a good idea for government to compete with private companies by becoming a landlord. But Chambless called it “general practice” that governmental agencies own property that they lease to private companies.

He also said whether it is done as a private or governmental entity or quasi-governmental entity is really not the issue.

“We had discussed the fact that this project did entail some revenue to be brought in to cover the cost of the building,” he noted. “So, I’m just curious to find out what sort of parameters we have on how long these folks are actually going to be there, so we can budget for that.”

If they are only going to be there a year, Chambless said, the board will have to amend the budget next year. If the board members decide they want to rent to another governmental agency, he said they can do that.

“I don’t see where that’s an issue,” he concluded. “That’s done quite often.”

At last week’s meeting, Wombough said he thinks the consensus is that it is space the town needs for its administrative staff. He also said the “good part” about that is it enables the town to have a leasing to the two tenants who are already there to offset some of the cost of that building. And he noted that it also opens up the opportunity to lease an area in City Hall for the Department of Corrections.

“That, coupled with probably additional space over there at the Annex building,” he said, “some of those folks are going to move over to the new building, which will help to offset a lot of those costs. So, it becomes taxpayer-friendly.”

Declaring that he thinks it needs to be done to keep the town working in a “professional manner,” Wombough said all the paperwork and details are in place.

But Powers disagreed that the consensus is that it is space the town needs.

“We have plenty of space here,” she noted. “We’re leasing space to other agencies and planning to lease more space to another agency. And it’s really not necessary.”

While acknowledging that he shares Wombough’s “positive thoughts” on the value of having more space, Chambless said he has some reservations about “actual space” for the residents. He cited parking, accessibility and said “upgrades” will have to be done, including a “drive-through” that must be constructed and funded.

“So, it does cause me some consternation as to whether it really is a viable option,” he said, “as opposed to, say, putting our eggs in a basket and hoping they hatch into little chickens.”

Chambless recalled that, earlier this year, the board was considering the feasibility of a more modern “municipal center” or City Hall area that encompasses some of the aspects of a community center.

“So, my biggest concern is that we’re moving from this barn to that barn,” he said. “And we really don’t have enough stalls for all the horses.”

Although there is speculation that the income the town would draw would cover its expenses, he said there are still many “hidden” expenses. He also wondered what the façade of that building would display.

“Is it going to show ‘Municipal Headquarters,’” he asked rhetorically, “or is it just going to be another strip mall building?”

Additionally, Chambless asked whether the “primary governmental agent” of that building can also become a landlord.

Powers said the only problem she has with it is that actually places the town in competition with people who own buildings and make their living by leasing them to others.

“We’re competing with our own taxpayers,” she concluded. “I would like to see it tabled until at least after the election and let the next board handle this.”