Two Cleveland County Commissioners are prepared to pay more than the last appraised value for two floors of office space, but aren’t saying yet who will occupy it.
Chairman Darry Stacy, District 2, and District 3 Harold Haralson are moving a contract forward to purchase two floors in the Financial Center at 111 N. Peters Avenue. The seller is listed as Agar, LLC.
During the commission's Monday meeting, Haralson and Stacy approved a motion to inspect the building prior to executing closing documents. District 1 Rod Cleveland voted no.
The purchase contract shows the county will pay $1.8 million, but a 2018 appraisal shows the value is $1.6 million. The county assessor estimates the fair cash value at $1.1 million.
Following the meeting, Cleveland told The Transcript he voted against the purchase agreement because of too many questions about how the county would use the space, a lack of public discussion and unstated reasons for not utilizing existing county-owned property.
The appraisal of the property was conducted in 2018 by Jim Artman for Agar. The third and fifth floors offer 12,046 square feet with approximately 6,023 square feet per floor, the appraisal reads.
According to county assessor records, the entire six-story building, which totals more than 42,000 square feet, has a fair cash value of $3.2 million based on property tax records, County Assessor Doug Warr said.
Stacy provided a prepared statement in response to questions from The Transcript. He said the purchase price, though $200,000 more than the 2018 appraisal, reflects a rising market.
“That appraisal was done over two years ago. Property values have continued to rise in the downtown area. Additionally, those floors are currently leased and will remain leased until the contract runs out,” his statement reads. “The additional cost includes the value of that lease.”
While the space is for offices, Stacy did not specify which county government offices would move into the space.
Sometimes paying more than fair cash value is warranted if it solves other problems like location, or if the price is lower than building a new structure, Warr said. The building is close to the county courthouse, while the Cleveland County Sheriff's Office leases the top floor.
“We are seeing one of the biggest cost increases for materials in decades,” he said. Warr blamed supply disruptions for some construction materials lingering from the COVID-19 pandemic, which began in early 2020.
Joy Hampton, the spokeswoman for Stacy, and Deputy Commissioner Mark Braley told The Transcript the cost to build was high compared to the cost of moving into an existing building.
“You're looking at $21 million-ish for a new building over there (courthouse),” Braley said.
Cleveland also objected to the purchase because “no one has ever explained to me how it will be used,” nor had it been discussed during commissioner meetings, he told The Transcript. He cited the absence of a feasibility study, but Hampton noted that the county's master plan from 2015 addressed the growing need for office space.
When asked which offices would move to the two floors, Hampton was not specific. There is more than one county office candidate for the floors as the county outgrows spaces, she said.
“Once the property is acquired, specifically which offices are going to be where can be figured out,” she said.
The Transcript reported previously that as the population grows, so grows the documents the county keeps, and so shrinks the space to house them, crowding out staff.
Cleveland said it would be unseemly to have any staff whose business is conducted at the courthouse move off site, and that storing documents at that location would be expensive. He speculated that Haralson and Stacy would move their staff to the two floors, but The Transcript was unable to confirm it.
“Do we need the IT over there? Well no, because we've got servers in the building. More sheriff's office space? Could be. Then you have county commissioners, but what staff for county commissioners do we have? My staff is at the barn. We have office space across the street. We need offices, but we need office space at the courthouse, like for court reporters,” Cleveland said.
Purchasing the floors instead of adding onto existing county-owned property also means less money in ad valorem taxes every year, a decrease of around $46,000, Cleveland noted.
Cleveland wondered why fellow commissioners would not simply “wait out” the high market until the county could design its own building on existing owned property with long term needs in view. He also noted that another building, the Primrose Building, offers 7,700 square feet — half the footage offered in the financial services building, but for a quarter of the price at $500,000.
Cleveland said he did not know how much it would cost to remodel it for county use because he was unsure how fellow commissioners plan to use the space.
The purchase price was the result of negotiations with the Rieger Law Group, Hampton said. While a counter offer was submitted, Hampton said those details were discussed in the commissioners’ executive sessions, which is not open to the public.
That was news to Cleveland, who said he had not missed a commissioner meeting nor an executive session.
“The published listed price was $1.8 million that the sellers wanted,” he said. “So, yeah I'm not aware of any other counter offer. If we decided that we only wanted to pay $1.2 million then, then we're going to walk away from that. Why would we give a counter offer and then pay the asking price? You walk. Then let them come back, and if they haven't been able to sell it for three months, 'Hey, I'll sell it to you for $1.2 million now.' This isn't something we absolutely have to buy in order to do our jobs.”
Stacy said forming a committee or entertaining public discussions or hearings can drive the price of a property higher.
“As soon as a committee is officially formed, prices of subject properties go up,” his statement reads. “The purchase of property can be a very competitive process. We have been looking at options including the purchase of property for some time. This is an incredible opportunity for the taxpayers of Cleveland County.”