Vail Daily column: Know the facts about the Skier Building
Should Avon taxpayers approve the use of certificates of participation (Ordinance 14-17) to purchase the Skier Building?
Per Ordinance 14-17 the town will borrow $6.3 million and the total repayment cost shall not exceed $12.5 million.
Projected Real Estate Transfer Tax, or RETT, for 2015 is $3,825,000 and for 2016 it is $3,318,000. If it is determined that a new town hall is needed and desired, an appropriate sized and more energy efficient town hall could be built in two years on current town property and paid for in cash by using the 2015 and 2016 RETT. The town estimates that the cost to build new is $6 million. This results in a savings to the taxpayers of $6.5 million in interest charges.
The Skier Building is located on the new Main Street Mall taking potential tax dollars out of the town of Avon’s tax base. This property should bring tax dollars into the town.
Once the Nottingham Park Pavilion is complete, large events such as Apres Avon will not be held on the mall but at the pavilion. Therefore, is there truly a need for bathrooms on the Main Street Mall? Perhaps a better location would be in Nottingham Park near the pavilion.
The purchase price of $3.2 million, or $196 per square foot, for this building is too much. After its completion, with a total estimated cost of $5.7 million (or $350 per square foot), this building still lacks parking, is 11 years old and is less efficient than a new building would be. Current sales within the town of Avon provide a range of $174 to $390 per square foot. All of these buildings are fully complete, have tenants in place and all have parking. The property that sold for $390 per square foot is fully occupied and has two national tenants.
The town’s very own recent appraisal of the building came in at $2,042,500, yet the contract price is $3.2 million.
No professional needs analysis was completed to determine the town’s needs. The current Town Hall has 43 employees within 14,100 square feet per the town (Eagle County records indicate it is 11,614 square feet), or 328 square feet per employee. Twenty of the employees are associated with the police department and will not be going to the proposed Town Hall or Skier Building. The Skier Building is 16,273 square feet. With only 23 employees, this equates to 707 square feet per employee. This leaves 14,100 square feet within the current Town Hall for 20 police department employees, or 705 square feet per person. This analysis indicates that neither of these building will be occupied at optimum levels, with the taxpayers having to pay the costs of heating and maintaining both under-utilized buildings.
The town manager, Virginia Egger, indicates that the town will save $70,000 by purchasing and completing the Skier Building for $5,930,000 (per the town of Avon Fact Sheet) instead of tearing down the current Town Hall and rebuilding it at an estimated cost of $6 million. What has not been factored into this analysis is that by building a new building, if one is truly needed and approved by the taxpayers, then it could be properly sized and more efficient than the Skier Building, which is 11 years old. This building would be designed and built for the purpose of a town hall and not just retro fitted to accommodate a town hall. If the cost to complete the Skier Building has cost overruns, then it could cost more than building a new building that is appropriately sized and built to be a town hall.
One scenario that could take place, if it is determined that a new town hall is needed and supported by the taxpayers, is as follows:
The Eagle River Fire Protection District currently leases the fire station from the town of Avon but they already own land west of the Northside Kitchen on Nottingham Road. This location provides superior access for the fire district to get to Interstate 70, the Wildridge Subdivision and Mountain Star community. The Eagle River Fire Protection District should be encouraged to build its planned fire station on the land they already own and vacate our town facility within two years. While a new fire station is being built by the fire district, planning for a Town Hall to be built on the current fire station site can proceed. During this time period, the real estate transfer taxes, projected at $7,143,000 for 2015 and 2016, could be put into a capital reserve account to build the new Town Hall for cash. If it is determined and approved by the taxpayers that a new police station is needed to accommodate a parking facility and/or convention center on the current Town Hall site, a new police station could be built on the Swift Gulch site that is currently leased to the Eagle River Water & Sanitation District. Again, by saving the real estate transfer tax for several years, while planning is taking place, a new police station could be built for cash. This would again save millions in interest charges.
So is this the correct choice to use certificates of participation to finance up to $12.5 million of debt for the purchase of the Skier Building for Avon’s Town Hall? Couldn’t the town accomplish the same result over the next couple of years and save $6.5 million by paying cash? Do we need to have 707 square feet of space for each employee within the new town hall? Do we need 705 square feet for each employee of the police department? Do we really need bathrooms on the Main Street Mall when future large events will be held at the Nottingham Park Pavilion? Should we take tax dollars out of Avon’s tax base by purchasing the Skier Building? Is $3.2 million too much to pay for a building that appraised at $2,042,500? Does it matter that certificates of participation were used by other Colorado municipalities or by the town of Avon in the past? Does it matter that the past Town Council or even the current Town Council is willing to spend $12.5 million of your money without your approval?
Angelo Loria is a resident of Avon.
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