EDITORIAL: Mr. Dronet Offers Up Two New Proposals, Part Six

Read Part One

It’s not an easy thing to sell an historical government building worth millions of dollars for a few pennies, but the Archuleta Board of County Commissioners have been trying to do exactly that, for the past year or so, with little success.

The Archuleta County Courthouse was built prior to 1928 — I’m not sure exactly when — “just yesterday”, compared to many ancient but still functioning buildings in Europe, Africa and Asia.

But “really old” in terms of America’s ‘disposable-infrastructure’ mentality.

So, we can state that it’s an old building. And it’s been partially abandoned. In 2015, the Archuleta County Sheriff abandoned the 19,000 square foot West Wing, which also served as the County Detention Center. That same year, the Colorado Judicial District moved out, claiming a lack of maintenance, and insufficient space, and possibly poisonous air quality.

In terms of the poisonous air quality, we note that the County Clerk, County Assessor and County Treasurer are still serving the public in the Courthouse, without any reports of health issues (that I’ve heard of).

It’s not a simple thing to put a real estate value on an old building. We know that our brand new courthouse, currently under construction in the Harman Park subdivision, uptown, has been estimated at about $6 million. That new building will not, however, accommodate the Clerk, the Assessor or the Treasurer, nor will it accommodate the Sheriff — all departments have been, and in some cases still are, accommodated by the historical Courthouse.

Shall we estimate the value of the existing Courthouse at $12 million? Considering the number of ‘government businesses’ it has historically been able to accommodate? Or is the value next to nothing? The real estate market functions, ultimately, by setting the sales price of a property based on what a willing buyer will pay. It appears that no one, with money, believes the Courthouse is worth $12 million.

When the BOCC advertised their intention to sell the property, last year, and received two offers on the problematic building. According to a story published in the weekly Pagosa Springs SUN last September, the Foulkrod Family Trust offered to pay $150,000 for the building. The Trust would also build a 6,800 square foot office building on Hot Springs Boulevard and lease the building to the County for 50 years at $272,000 a year. (According to my pocket calculator, that would come to $13.6 million in lease payments. Close to the “actual” value of the historical Courthouse?)

A second offer to purchase the Courthouse came from developer Jack Searle, the owner of BWD Construction, currently one of the more active construction companies in Pagosa. Mr. Searle bid $479,000 for the historical building, less $150,000 in “fee waivers” for dumping costs at the Archuelta County Landfill. (The apparent intention would be, that the building will be demolished and added to the Landfill.) Mr. Searle would lease the buildi back to the County for a period of up to five years, and would build a new office building for the County and the County would lease it from the developer for a vaguely defined amount of money for a vaguely defined period of time.

In response to those offers, then-Commissioner Steve Wadley made this comment:

“I understand that it has to pencil for business people to make decisions, and I think in some ways they’re fair proposals, but the County cannot afford to do it,” he said. “And I knew this going in, and I certainly… nothing derogatory towards the people that put the proposals together; they were well thought out… but I don’t see any way the County can afford this.”

So we have to wonder… if the County couldn’t afford those arrangements last fall… can the County afford Mr. David Dornet’s new offer, presented earlier this month? You can download Mr. Dronet’s letter here, if you haven’t already.

From that Letter Of Intent:

“The County desires to sell the property, buildings and all related rights thereto located at 449 San Juan Drive… more commonly known as the “courthouse building”, and eventually create a new administrative office solution for county staff (“New County Building”)… There is currently debt secured by the Courthouse (“Bonds”) that prevents the County from being able to sell the Courthouse without experiencing a financial loss.”

Clarifications. The “related rights thereto” presumably refers to the right to a certain quantity of geothermal water, historically used to heat the Courthouse but perhaps also useful for a future hot springs resort. The County put the Courthouse in hock in 2012, and used the money to repair Park Avenue. That debt should, if things go as planned, be paid off in two more years.

Olympus Real Estate Holdings — a company Mr. Dronet appears to manage or own — proposes to lease the unused portions of the Courthouse for $5,000 a month, for up to five years, while we wait for the “bonds” to be paid off. What exactly Olympus REH would do with the vacant portions of the building is not mentioned in the letter, but during the March 6 discussion about the offer, Mr. Dronet hinted that the building would be used for “storage”.

The County would be allowed to “lease back” the office space it currently uses in the Courthouse — for the Clerk, Treasurer and Assessor offices — for up to three years, while the new office building is constructed. The monthly lease-back cost would be $0.75 per square foot. That’s a relatively reasonable lease rate for Pagosa Springs, I believe. Mr. Dronet’s letter doesn’t mention how much that would amount to.

According to past County documents, it appears that the Clerk, Assessor and Treasurer occupy about 3,900 square feet. According to my pocket calculator, that would put the ‘lease-back’ cost at about $2,900 a month.

Mr. Dronet’s company, meanwhile, would be leasing 25,000 square feet at $0.20 per square foot.

In addition to the $5,000 a month lease paid by Olympus (less the $2,900 monthly lease-back paid by the County?) Mr. Dronet is proposing to pay $250,000 to purchase the building… minus a $75,000 fee waiver at the County Landfill… minus certain as-yet-undefined tax abatements…

Then we have to think about how a new office building can get built… and where… and for how much.

Mr. Dronet has ideas in that regard, as well…
Read Part Seven…

Bill Hudson

Bill Hudson

Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.