The Santa Rosa City Council on Tuesday authorized $4.1 million to purchase the mostly-vacant former Westamerica Bank building across First Street from City Hall.
The 14,500-square-foot bank will be the most recent purchase in the city?s expanding downtown real estate portfolio. Two years ago the city redevelopment agency paid $3 million for the AT&T monolith on Third Street and the city spent $3 million for Chamber Plaza office next door to the bank.
?The timing of the purchase couldn?t be any worse,? Mayor Gorin said of the council?s unanimous approval to buy the bank when the city is facing a projected $20 million budget deficit next year.
But Gorin said the purchase should reduce the city?s costs. The city intends to convert the three-story bank building into city offices and move in some staff now housed in 19,000-square-feet of leased buildings scattered throughout the city.
?It?s cheaper than paying rent,? said Assistant City Manager Michael Frank.
The purchase will be financed with proceeds from a $10 million bond the city sold two years to acquire Chamber Plaza. The debt service over the next 20 years will be $1.6 million less than the rent the city now pays to house those employees who will occupy the building, Frank said.
In the end, the city will own a building worth an estimated $7 million, he said.
Frank said it will be at least 18 months before employees move into the building because it must undergo extensive rehabilitation costs to meet state and federal building standards and to install ground floor restrooms.
The building could eventually be demolished as part of a much talked about plan to tear down the six-acre City Hall complex built in 1975. Among the preliminary proposals is to build a high-rise City Hall, possibly on the bank and chamber site, and use the current site to build a performing arts center.
Gorin said moving ahead with such a vision is a ?long, long, long time away.?
?Right now we have no financial ability to even think about that,? she said.
The city paid $1.3 million more for the bank building than paid by James Ratto, owner of Santa Rosa Recycling & Collection, the city?s garbage-hauling franchisee. Ratto bought the property for $2.8 million in 2005 and rejected offers from the city to buy it for $3 million a year later.
City land purchasing agent Josh Maresca defended the acquisition price. He said a second appraisal ? which was the basis of the purchase price ? of the property done jointly on behalf of Ratto and the city was more detailed than an earlier one the city commissioned that pinned the property?s value at $3.1 million.
The city also is studying the possible purchase of the vacant Charles Schwab office complex next door to the AT&T building on third Street.
There have been preliminary discussions that combining the Schwab property with AT&T might expand the area?s redevelopment potential.
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