Clark County commissioners agreed Wednesday to begin negotiating a lease-to-own deal with a commercial crane company that currently occupies the county’s Agricultural Services Building.
They disagreed, however, on the asking price.
Commissioner John Detrick preferred offering the building for $750,000 or $775,000 before he agreed with Commissioner Rick Lohnes to pursue an $800,000 agreement with Konecranes Region Americas because Lohnes wouldn’t consider a lower amount.
“If they buy it for eight, they basically will spend $853,741 (including current lease payments) on the building, not including what they put into it, but that was their call,” Lohnes said.
Konecranes entered into a five-year lease in 2012 and recently approached county officials about modifying the agreement for a lease-to-own deal, County Administrator Nathan Kennedy said.
The county paid two companies $2,000 to $4,000 each for appraisals and obtained market value reports from the Clark County Auditor’s Office and Midland Properties at the request of the Greater Springfield Community Improvement Corp., Kennedy said.
One appraisal valued the building at $900,000, another at about $700,000.
In addition, a Clark County Auditor’s Office statement of value indicated the building was worth $1 million. Midland Properties report valued it at about $750,000.
The county should consider offering the building at 4400 Gateway Blvd. for a lower price, Detrick said.
“I don’t want to be stuck with a building if Konecranes backs out at the end of their lease. We aren’t in the real estate business and there are a lot of empty buildings around here,” he said.
Commissioner David Hartley said the county should seek $1 million for the building or no less than $900,000.
“The minimum amount we should receive is $900,000,” Hartley said.
The original agreement involved the county leasing the building to the Community Improvement Corp.
The CIC then subleased about 1,500 square feet of the building to Konecranes and the company was expected to lease additional space after the other tenants moved to the Springview Government Center on East Main Street.
All of the other tenants will have moved out of the building next week when the OSU Extension of Clark County vacates the property.
Commissioners were advised that state law doesn’t implicitly require that the county to put the property up for bid.
Konecranes sought to lease the building to create a global training facility there.
Chamber officials have said the deal would add jobs and pump $400,000 into the local economy.
But commissioners voted 2-1 to enter into the agreement and it became a campaign issue as Detrick and Hartley sought re-election in 2012.
Hartley voted against the lease due to concerns about the costs of renovating Springview and fear Konecranes would leave the building at the end of the lease.
Renovations at the government center to provide office space for the tenants such as the Clark County Soil and Water Conservation District has cost the county about $836,000.
Lohnes said he used the average amount of the appraisals and the market value reports and came up with about $800,000 and determined that officials shouldn’t accept less than that amount.
But by selling the building for $800,000, Lohnes said the county will recover renovation expenses and other costs associated with owning the agricultural property.
Konecranes has paid about $53,000 in rent since moving into the agricultural building, he said, and a $40,000 state grant cover some costs associated with moving tenants to the government center.
“This (selling the building) will relieve a big headache on the county,” Lohnes said.
Mike McDorman, chamber president and CEO, said he is excited about Konecranes growth.
“This is another step to offer the company another opportunity to grow in Springfield,” McDorman said