LUB approves city hall purchase

“What this contract does is open up what’s called a feasibility period,” Ty Ross, city and utility manager, said. “So over the next 60 days and extendable for another 30 days … we will do our due diligence. We will get into the property and determine whether or not it’s suitable for our needs. We’ve already lined up an architect and a commercial builder who will provide us with solid estimates. What you have up to this point are basically armchair estimates. So we’ll be following up during this feasibility period with some harder numbers for you to understand before ultimately deciding to close the transaction.”

The UT Medical building would cost $1.339 million, which was negotiated down from an original asking price of $2 million. The Capital Bank price tag is $589,000 after an original asking price of $1.09 million.

“There was a lot of back-and-forth between our broker and the property owners of both the properties,” Ross said. “The UT building in particular, what we got down to was the $1.339 (million) number, which was the assessed value of the property. It was sort of a number that the seller did not want to go beneath.”

The Capital Bank building has an assessed valued of $1.2 million and includes two additional acres undeveloped behind the facility.

A projected city hall project on the Hutch property in downtown Loudon would have cost about $5 million “five or six years ago,” Don Campbell, LUB chairman, said.

“There’s no telling what the building would cost today for the same building,” he said. “We feel like we’re saving the city bookoodles of money by going to the 72 site and still leaving this Hutch property … for developing the whole thing.”

The biggest question facing LUB in the potential purpose is a decision by UT Medical, which still pays rent on the building and has a right of refusal on the property. UT has 30 days to negotiate a potential purchase of the property or a buyout from their current lease.

“This event would trigger that notice to the tenant, the tenant being UT Medical, which has the option to purchase,” Ross said. “It’s a wait-and-see on how that turns out. We can’t know until we get there.”

Both properties require $10,000 in earnest money at the start of the feasibility period, but LUB would recoup that money if it backs out of the purchase before the feasibility period ends.

“If we back out we lose $100,” Joe Ford, LUB and city attorney, said.

Several people in attendance voiced support for the project, none more than LUB employee Hank Ritchie.

“I’ve been at Loudon Utilities for almost 23 years, and I spent 19 in the office that I’m in,” Ritchie said. “... I’m proud of what you gentleman have done and especially you, Ty.”

Ritchie talked about improved safety for customer service employees and upgrading to a building compliant with the Americans with Disabilities Act. He also commented on the overall condition of the current offices.

“I come in at 8 o’clock in the morning, and if I don’t go outside I don’t know if it’s sunshine or snowing or anything,” he said. “The only time I know it’s raining is that I hear the water dripping from the roof into the bucket in the room next to me, and then my door started to leak. So I’ll be happy as a bug in a rug to get out.

Moving forward with riverfront

Going hand-in-hand with the decision to purchase the property on Highway 72 is the development of the Hutch property downtown.

LUB voted to enter into a professional service agreement with Partners and Associates Inc., to put together a development plan for the property.

The agreement with Partners costs $17,600 and includes coordinating “the activities of architects, engineers, general contractors and any other consultants necessary to complete the services for the planning projects.”

This would include planning for a potential relocation of Malibu Boats, as well as for other potential businesses, according to the agreement.

The city will be asked to reimburse additional expenses related to the project.

“In a situation like this mostly it’s going to be reproduction costs to prepare copies of things,” Corey Shepherd, Partners representative, said. “We’re typically talking about final reports, foam boards that might have images of how the site will be laid out, things like that. We don’t anticipate travel costs, out of town consultants, things like that coming in to spend the night. ... We don’t anticipate anything out of the ordinary.”

The anticipated schedule for the completion of services is eight weeks and would only exceed that timetable if negotiations with potential developers or businesses need to continue, Shepherd said.

“If we were to, for example, get six weeks into it and be in conversations with a potential use on the site and that meant a deeper dive of sorts because we have a fish on the hook, if you will, then we might ask for additional time simply because we want to carry those conversations forward,” he said.