COTTONWOOD -- The City of Cottonwood has for years entertained the idea of purchasing a space on Main Street to consolidate a significant portion of its departments and services.
Right now, Cottonwood has 13 locations hosting these services spread out within the city limits. Some argue that it would be a benefit to citizens to centralize some of these departments to one location.
“It would be bring public services all into one building,” said Cottonwood City Manager Doug Bartosh during a city council meeting Tuesday. “It would be nice to have them all in one spot.”
The property at Riverfront Commons is currently owned by Northern Arizona Healthcare. NAH bought the property to host some of its own services five years ago, but the building has remained empty.
NAH leaders are now trying to work out a reasonable price to sell the property as well as finance tenant improvements to the building, according to a city staff report.
To pay down some of the costs of the building, the city is in the process of selling some of its own unused parcels.
The cost estimate of purchasing the roughly 30,000-square-foot building is $2 million, according to council documents. Mike Mongini, a real estate attorney from Flagstaff told council members they wouldn’t find a better deal anywhere else. He said purchasing that property would also solve the city’s “white elephant problem.”
“You drive in and see this nice building and ask why there’s nothing going on with it,” he said. “So you’re solving that problem.”
Cottonwood Mayor Tim Elinski noted that an advantage in this potential transaction is the city’s partnership with NAH.
“The other added benefit is we would be selling these properties in Old Town on the open market, which is going to help economic development down here,” he said. “It’s also going to tie into our goal of building up that entertainment district … we’d be lengthening the reach of Old Town.”
Mongini, in coordination with NAH and the city, has been working on developing a trust that could be paid down as the city sells its properties.
“You don’t see them often but they are used in complex transactions,” Mongini said. “You don’t want the title of the property to ever change name, so it goes into trust with a trustee.”
Mongini said the properties exchanged between the city and the hospital would all be put into a trust and as certain conditions occur, those properties would be sold and money applied would go toward the purchase price of the new city hall. Mongini said a benefit of doing it this way allows the city to avoid putting all their properties up for auction at once.
“That oftentimes creates an economic distress in an area,” Mongini said. “So these will be disposed of over a period of time.”
Deputy City Manager Rudy Rodriguez told council that if the city sells all its properties and purchases the new building, he estimates $1.5million to 2.5 million would be added to the city debt.
“I’m not fond of any more debt but when we’re getting a screaming deal like this,” he said. “I think it’s kind of hard to just walk away from it. All of the debt we’ve had including this one has been for infrastructure and improvement of city services.”
Rodriguez added that council would plan a repayment process during budget discussions.
Council Member Deb Althouse argued that she wasn’t comfortable as a council member or a citizen to take on a level of debt without having a plan to pay it back.
“I don’t go out and buy myself a $750,000 house and then figure out how to pay the monthly mortgage payment,” she said.
Elinski agreed that details still needed to be ironed out before agreeing to purchase the property.
“I think we’re just saying we’re ready to move forward our due diligence and finding out what all those details are and whether or not we can honestly make this transaction work,” he said.
Council moved to direct staff pursue due diligence on the purchase of the Riverfront Commons property.
-- Follow Kelcie Grega on Twitter @KelcieGrega