SOMERTON – Having tried without success to sell and then lease a business building acquired several years ago, Somerton will now ask voters whether the city should put it back on the market.
The Somerton City Council recently voted to schedule a March 10 election for voters to decide whether the city should sell the 10,000-square-foot building on the city's east side at 674 E. Main St.
A private developer began construction of the building but halted work amid the recession. The city council voted in 2011 to acquire it with the idea of leasing or selling it to private businesses or industry that city officials hoped would, in turn, create jobs.
But City Hall so far has been unable to find a buyer, and earlier this year it saw its plans to lease it frustrated when Convey Health Solutions withdrew from negotiations to rent it as the site for a call center expected to create up to 200 jobs.
As it turned out, the city jumped the gun when it first put the building up for sale.
"It's been up for sale for some time," Mayor Martin Porchas said, "but then we realized that, by state law, it can only be sold if voters approve it. And it hasn't been possible to rent it, although there have been offers made."
According to state statute, a municipally owned property valued at more than $500,000 can be sold only with voter approval.
The city purchased the unfinished building for $315,000 in 2011 and then spent another $169,000 to stucco and seal its wood shell and to make other improvements.
Nonetheless, Porchas says he's confident the city will be able to recoup all that it has invested in the structure, located at the east side entrance into Somerton on Highway 95.
"I don't think it should be seen as a mistake in having purchased it," he said, "because we have something to offer in case there is a company that wants to establish itself here. And the image of that area was improved because the facade of the building hadn't even been finished."
Porchas said the city received various proposals from companies interested in occupying the building, among which Convey came the closest to making a commitment.
City Councilman Carlos Gonzalez said he also is optimistic that the city will eventually find a buyer or tenant for the building.
"I don't believe it has been a bad purchase," he said. "It's still possible to rent it or sell it. That investment is not going to be lost."
The building, originally built to house multiple small businesses, also needs finishing work on the inside before it can be occupied. The cost of that work has been estimated at $1.2 million.
At the time it was negotiating a lease with Convey, the city was exploring the possibility of seeking at a loan of $900,000 as well as issuing $300,000 in bonds through the city's Industrial Development Authority to finance the interior work.
"Nothing has been decided," City Councilman Jose Yepez said. "It' something that we have to look at with a lot of care. That came up as part of the negotiations for the lease for the building."