For sale: Aging former warehouse, used most recently as city annex. Needs work. Good development potential. Excellent location. Price to be determined.
With a new $12-million city hall annex nearing completion, Nanaimo council is seeking expressions of interest proposals from developers interested in the 70-year-old building that currently houses about 200 city workers.
The city purchased the building about 10 years ago for $500,000. Last year, it was determined more than $4 million would need to be spent to bring the building up to current seismic codes, resulting in a decision by council to build a new annex.
The original building was built seven decades ago as a warehouse.
Nanaimo Mayor John Ruttan said it’s hard to tell at this point what interest the site might generate.
“There are a few different options that could be done at the location. It’s zoned for a variety of possibilities, so we’ll have to wait and see who shows interest,” said Ruttan.
Expression of interest responses, due by June 11, require interested parties to outline a vision for the property, define a purchase price, and perform at least 60 per cent of required seismic upgrades to B.C. Building Code standards. Complete seismic updating is estimated to cost $4-5 million.
The assessed value of the property is about $3.5 million.
“This way we can sample the water and find out what is out there and determine what the true market value of the site is,” said Ruttan. “Somebody may want to put a parking lot there, build a condo, who knows? It could well be it proves to be a very desirable site. It’s close to downtown, it has a high elevation for potential good views.”
The city will also have the ability to buy the site back if no attempt to renovate or demolish the building is made within two years after purchase.
The process is non-binding. If no interest is received, city staff and council will have to explore other options, said Ruttan.
Staff are expected to begin moving into the new annex this fall. The new building is being built to gold LEEDS standards, though city hall voted earlier not to pursue official certification to save almost $30,000 in red tape.
The total price tag for the new annex is $15.7 million, which includes contingencies, moving costs, new furniture and equipment. More than $11 million is being drawn from reserve funds. Another $4 million will come from short-term borrowing, which will generate a one-time tax increase of 1.1 per cent starting this year and ending in 2016.
A staff report indicates city hall itself is expected to undergo some renovations to make space for city employees from the old annex who don’t move into the new building.
reporter2@nanaimobulletin.com
