Northwest News

Tacoma City Council to vote on $4 million Old City Hall purchase

Tacoma officials say the best chance of saving Old City Hall is to buy it and make critical repairs themselves rather than rely on a reluctant developer.

Seattle owner George Webb of The Stratford Co. bought the building in 2005 with a plan to turn it into lofts, but his plan evaporated when the recession hit. Since then, numerous attempts by the city to get Webb to maintain the 122-year-old city landmark haven’t fully worked.

An agreement allowing the city to enter the building to make sure water and neglect wouldn’t destroy the structure didn’t seem to motivate him. And Old City Hall was too far gone to benefit from a law passed last year to prevent the demise of historic structures.

Now the city of Tacoma could become the newest owner of Old City Hall Tuesday (June 2) if the City Council approves the $4 million purchase. That price is $2.4 million higher than an appraisal paid for by the city earlier this year.

City Manager T.C. Broadnax said the city tried to negotiate for a lower price, but it was clear the owner wouldn’t accept the appraised price of $1.6 million when he had paid $3.8 million a decade ago.

“I did understand, at least in my opinion, that they would probably not accept any less than what they paid for it,” Broadnax said. He authorized city staff to offer $4 million recently.

Webb said Monday that $4 million is not the right price for Old City Hall.

“We did not get what we wanted,” Webb said, noting that the city’s appraisal evaluated the building only for an office use, not a residential one. Stratford’s appraisal shows residential use of Old City Hall to be more lucrative.

“I think we’re leaving a fair amount on the table,” he said.

The city’s offer followed months of trying to get The Stratford Co. to make fixes to the building. The company owes Tacoma $41,000 for an engineering study it completed when Stratford failed to do its own. Water and electricity have been shut off to the building, and the company hasn’t paid Tacoma Public Utilities $1,100 in outstanding charges.

Last September, the City Council passed a law intended to save historic structures from “demolition by neglect.” The law allows the city to make basic repairs if a property owner would not. Such repairs could include shoring up a collapsed floor or leaning wall, or stabilizing crumbling masonry. The property owner would then be billed for those repairs.

At the time, city officials said the law could help buildings like Old City Hall, and had it been in in place years ago, could have prevented the 118-year-old Luzon Building from being demolished.

“The time to act isn’t when you realize the building is structurally falling apart,” said the city’s historic preservation officer, Reuben McKnight. “It’s when you know you’re entering into a pattern and the outcome to intervene (to save the building) is earlier in the process.”

But city officials said Monday that the demolition by neglect ordinance was designed for “emerging problems,” not those with a long history of disrepair like Old City Hall.

Water and winter weather have not been kind to the historic building. Moisture has broken apart some of the mortar that holds the 122-year-old bricks together. The building doesn’t have complete fire protection because the water and power utilities are disconnected. Last summer, a small tree grew out of one of the circular windows on the tower.

Gaining control of the building before another winter is crucial, McKnight said.

Alternatively, the city could continue to make repairs on the building under an existing agreement until someone else buys Old City Hall, Broadnax said.

Or the city could use eminent domain to seize the property, but Broadnax said that would be difficult for a number of reasons. It could take many months before a court of law could establish the value of Old City Hall, for instance, and there are many questions about what the building is actually worth.

Broadnax said Monday he would prefer to own the building so the city can control its destiny.

That destiny wasn’t immediately obvious Monday. If city leaders have long-term plans for the structure they didn’t reveal them.

City officials estimate they would have to make some immediate repairs to the structure to stabilize it, Broadnax said. That could cost around $150,000 to $200,000 and would be carried out once the city gains control of the landmark sometime in July, if the council approves the purchase and the sale closes as scheduled.

Why did Webb accept the city’s offer when he’s turned down others, including one from a group of Chinese investors recruited by the city of Tacoma?

Another suitor was an investment group led by Grace Pleasants, who renovated the historic Albers Mill on the Foss Waterway and helped broker the deal that made Portland-based McMenamins the owner of Tacoma’s historic Elks Temple. Webb said Pleasants has made two offers to buy the building in the past, including one for $4 million last year.

Webb said Monday the difference was that the city is willing to pay cash, and the sale would close in 30 days. He and his investors wrestled with whether to accept the city’s offer because Stratford was close to securing a loan from the federal department of Housing and Urban Development to develop Old City Hall as apartments, he said. But the loan wasn’t guaranteed.

“It’s a fork in the road,” Webb said. “We can sell now, lose some money, but do better than we would have (if we had sold) several years ago, or we could proceed with the project and see some profits in the future at some risk.

“We decided to go with price and terms the city was able to offer,” he said.

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