“We’re here again to discuss something we’ve been talking about — the city’s been talking about — for well over two decades,” Cottonwood Deputy City Manager Rudy Rodriguez told the Cottonwood City Council at a special meeting on Tuesday, Jan. 12.
The city has had on- again-off-again plans to move the city’s administrative offices, City Council chambers and some other functions, out of its current combination of buildings in Old Town Cottonwood and along Main Street to one combined building.
At the meeting, council indicated to staff an interest in seeking more information about moving into the Rough Cut building at 635 N Main St., south of Riverfront Park, pending purchase from Premium Realty. No vote or official action was made at the meeting.
“One of our items on our strategic plan is to consolidate city services and look at a city hall,” Rodriguez told council. “This would check off that box. We’d be looking at a one-stop shop that would include all these departments into one area, and it also begins to check off another one of our strategic goals, and that’s tourism sustainability. It creates more retail because we’d be able to sell those particular properties in Old Town, and it would extend our Old Town footprint.
Rather than being from bridge to bridge, it would be bridge to 10th Street.”
The Rough Cut building sits on a parcel of 2.18 acres, and contains approximately 50,000 square feet of space inside the building. The council had previously discussed purchasing the building in 2018 but passed on it.
According to Rodriguez, the expected cost for the building would be around $4.6 million, with the cost of building out the interior — which is as of now relatively bare bones — estimated at an additional $2.6 million. With $750,000 expected for furniture and fixtures, as well as additional costs for fees, taxes and insurance, Rodriguez estimated the total cost of the project at $8.1 million.
Rodriguez proposed paying the project with a 30-year financing setup, which at 3% interest rates — likely higher than the actual interest rates if the project were to go forward — would cost the town $404,000 annually.
Rodriguez also proposed a setup allowing for the possibility of buying the remainder of the principal outright after 10 years, based on:
- The city’s favorable financial situations regarding sellable property, including the Old Town facilities
- A large amount of money in reserves
- Some Coronavirus Aid, Relief, and Economic Security Act funding the city still has available
- Nearing end of loan payments after the purchase of several city buildings including the Cottonwood Recreation Center and expansion of the library.
While most of the council was supportive of the plan, Councilwomen Debbie Wilden and Tosca Henry argued that the city has many more capital projects that would be a better use of funds than incurring debt and spending money on its own government offices.
“In my opinion this is not a need, it’s a want,” Henry said. “And we’ve wanted this for years. I would love to see a private business go into that building and start generating sales tax revenue and have it be used, but to me it’s no the right building and it’s not the right time. We’re not out of the woods with the pandemic. We’ve made great strides with paying down our debt service, but we still have a lot of debt for a city our size and with our income levels and concerns.”
In addition to cost, the proposed building does come with some downsides, such as a desire for an accelerated timeline from Platinum Realty, and a dilapidated parking lot that would need to be repaired and eventually overhauled before being usable.
City Manager Ron Corbin said that while the debt service costs would not be out of the realm of the city’s current financial situation, it also would mean some future projects that the council might not would not be able to happen.
Vice Mayor Doug Hulse expressed concern about the city’s economy in coming years, saying that while the city has had several good years and seems to be managing the pandemic better than expected, he was worried about the uncertainty of what comes next in seeking to take on more debt.
However, members of council supporting the move argued that while the building is expensive, it is likely cheaper than any alternative for the amount of square feet, and that with interest rates so low, this was probably the best time to make a purchase that the city has been considering for years.
“Do we agree or disagree that we need to get out of Old town?” Councilman Michael Mathews said. “Do we need to turn over those buildings and those properties to private enterprise? I’m of the opinion we do.
“I don’t think we can buy a piece of property or buy one of our own properties, and build anything [like] what we we need, even if it’s smaller, for this kind of money. So I am firmly committed to the fact that we will never get this cheaper again. If we’re going to kick this can down the road, it’s going to cost the city of Cottonwood considerably more money, or we’ll sit where we’re at forever and we’ll work out of the buildings we’re in, and then we’ll take up what I think is valuable ran estate for private enterprise in Old Town, so that’s where I’m at. I don’t think interest rates are going to get any better either.“
