One problem with selling your office building — or, in the case of the Archuleta County government, with selling your courthouse — is, where do you put the 16 or so employees who are still working there? It would seem you would need a new office building, somewhere. When the Archuleta County Sheriff’s department abandoned their offices in the downtown Courthouse in 2015, it took the County about 5 years to find a suitable replacement, and that happened only because the former Fred Harman Art Museum went out of business.
The same mistake will not be made with the remaining Courthouse employees; we can be fairly sure of that. The Board of County Commissioners would not be that stupid.
With that in mind, we can look at the proposal presented earlier this month, by David Dronet, on behalf of the Olympus Real Estate Group, who might be acting on behalf of the Springs Resort. (But we’re not sure.) Mr. Dronet is proposing to lease the 25,000 square foot Courthouse from the County for up to five years, at $5,000 a month, while collecting about $2,900 a month as a “lease-back” from the County’s continued use of maybe 4,000 square feet.
In the meantime, something or other will happen in terms of a new office building getting constructed, and the County will sell the Courthouse to Olympus Real Estate Group for $250,000 less a dump credit at the County Landfill of $75,000… making the actual purchase price closer to $175,000. (Minus certain as-yet-undefined “tax abatements” mentioned in the letter.)
From Mr. Dronet’s March 30 Letter Of Intent… wherein ‘Olympus Real Estate Group’ is referred to as “Tenant/Buyer”:
Tenant/Buyer owns and/or has access to land parcels in downtown Pagosa Springs and in Harman Park. The parcels are adequate for the development of a new office building and Tenant/Buyer will work with the County to provide the ability to buy a land parcel, sufficient for the construction of a New County Building, at fair market value. The exact parcel to be purchased may require rezoning, platting or other approvals, which the Parties agree to cooperate in furtherance thereof beginning upon the execution of the Lease.
I’ve done very few real estate transactions in my life, and none of them required rezoning, platting or other approvals. So I’m not necessarily the best person to analyze the paragraph above.
But I know very well that when two parties “agree to cooperate”… and come to the table with different goals… things can quickly go to hell in a hand basket.
A visit to the County Assessor’s property map (https://portico.mygisonline.com/html5/?viewer=archuletaco) suggests that none of the parcels in the Harman Park subdivision are owned by Olympus Real Estate Group. But two rather large parcels are owned by Archuleta County. One of those parcels is now home to the new Fred Harman III Law Enforcement Complex, and is the site of the new County Courthouse, currently under construction.
However, one of the Harman Park parcels directly across the street from the new courthouse location appears to belong to OGI Inc.
OGI was registered with the Colorado Secretary of State in 1993, and lists Jack B. Searle as the registered agent. Jack Searle and David Dronet have publicly presented themselves as business partners, in connection with the vacant 27 acres just south and west of the Springs Resort. Mr. Dronet is, as previously noted, “managing principal” at the Springs Resort.
The parcel doesn’t appear to be an issue. But does Archuleta County have the financial resources to build yet another office building?
The County has been on a spending spree these past couple of years, beginning with their decision to put the taxpayers $15 million in debt (actually closer to $20 million when you count “interest” payments) to build the new County jail, after the taxpayers twice rejected a tax increase to fund the project.
The County didn’t even bother going to the voters when they decided to build the $6 million courthouse. They just did it.
Back in October, Commissioner Alvin Schaaf was hoping the BOC could match a $1.9 million grant from the Colorado Underfunded Courthouse Facility Commission
“The basic thing the public needs to know is the $1.9 million. That’s a ‘gimme’ that is not going to come around again…”
The grant required the County prove it had secured all the funding for a proposed $5.8 million courthouse by November of 2020, in order to receive the money. Where would the BOCC find an additional $4 million of dollars to match the state grant?
Then-Commissioner Steve Wadley explained the spending spree in a Pagosa Springs SUN interview:
“We’ve got enough to where we have enough money to… whatever we start, we can complete. So, we’ve got enough money right now to start and finish a one-courtroom courthouse, but we will continue to seek grants until we get to a three-courtroom courthouse…”
…There was $3 million awarded for underfunded courts in the entire state, and this county got $1.9 million. And that’s because the three of us went out there and bared our souls to get it.”
Part of the soul-baring process, apparently, has been to redirect 2021 property taxes away from the maintenance of the Archuleta County road system, to be used instead on a shiny new $6 million courthouse.
Back when he was still Finance Director, Larry Walton’s annual October budget presentations were consistently informative. In 2019, Mr. Walton presented a chart illustrating the amount of debt we’re looking forward to over the next decade or so. As we can see, the amount of County debt increased substantially in 2019 when the BOCC agreed to use Certificates of Participation (COPS) to build the new detention center in Harman Park. The County debt nearly tripled in 2020, compared to 2018. But some previously acquired COPs and leases will be paid off in 2024, and the annual detention center COP debt will then be only about $300,000 more than the pre-2019 debt levels… for the next decade.
The above chart is from last year’s presentation. Mr. Walton did not include a similar chart in his 2021 budget presentation to show us a picture of the total debt burden in 2021, but apparently, the $4 million dollars for the new courthouse did not come from new debt, but by emptying a County savings account.
Where would even more money come from, to pay for the new County office building hinted at in Mr. Dronet’s letter?