BY ALEX CANTATORE
Staff Reporter
In 2005, the City of Turlock purchased an old warehouse at 400 B St. to operate as an Emergency Cold Weather Homeless Shelter. On Aug. 12, the City Council decided it would no longer operate a shelter in the building, which failed to meet residential zoning requirements. On Aug. 22, the Council moved to sell the building through a sealed bid process with a minimum bid of $300,000. And on Sept. 23, the City Council found out that no one else wanted the building either when not a single bid was received.
The standard 15-day sealed bid process was followed, opening on Sept. 2 and closing Sept. 16. Public notices were printed in local newspapers, an open house was held on Sept. 9 with staff present to answer questions, and a bid packet was prepared including information about the site, utilities, zoning, and the downtown district Industrial residential design guidelines.
There was a modicum of interest displayed as eight bid packets were sent out, but not a single interested party stopped by on the day of the open house. Ultimately, no bids were received.
Despite the small council presence on Tuesday night, given Mayor John Lazar and Councilwoman Beverly Hatcher’s absence, the remaining three councilmembers immediately set to work developing a new plan to address the sale of 400 B St.
“My initial thought is to accept open bids, with no minimum bid, for 15 days, both in terms of cash and trade, and then bring bids back to council at that time,” said Councilman Kurt Spycher.
The idea of “trading” the 400 B St. site, possibly for a vacant lot in the city, was very appealing to Spycher. He stated that he has heard rumors of a local property owner interested in such an exchange of real estate.
“I’m open to any approach,” said Councilman Ted Howze. “I read that same appraisal, and I made the comment when it came before us before that $300,000 was the high end. Unless I’m mistaken, that appraisal said $100,000 to $300,000.
“I think we took our best shot at tagging the absolute highest price on the building, now we’re back to reality,” Howze continued. “That building probably never was worth $365,000.”
According to city staff, a somewhat comparable property in the area has been on the market for three years.
Another sticking point to a quick sale or trade of 400 B St. comes in repaying the federal Community Development Block Grants that were used to purchase the site. Under the City’s current understanding of how the agreement was drafted, should the site sell for just $100,000, Turlock would be responsible for repaying not only that amount, but also the remaining $265,000 of the original purchase price.
“My off the cuff response would be we’re probably going to have to make up the difference of what we paid and what we get to the CDBG account,” explained City Manager Tim Kerr.
There was some discussion that the City may not be responsible for repaying the full value under the terms of the CDBG agreement as the site was used by the City for a certain period of time. As previous City Attorney Dick Burton had drafted the agreement, none present were entirely sure on how the CDBG funds would have to be addressed.
Due to this unanswered question and the council’s concern that selling the site may actually cost more than simply sitting on it, the council unanimously moved to postpone action to the next regular Council meeting, Oct. 14. The full council will take up the issue again at that date, with further research from City Attorney Phaedra Norton to aid in their decision.
To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.
Originally published in the Turlock Journal 9/26/2008.
Retrieved from the Turlock Journal Web site.