MOREHEAD CITY — The city council has agreed to put the city hall building at 706 Arendell St. up for sale in anticipation of construction beginning soon on the new city hall complex to be located on Bridges Street.
The decision to list the building as surplus and authorize its sale came as a resolution during the city council’s regular monthly meeting Tuesday in the municipal building. The resolution passed by a narrow margin, with two council members voting in favor of it, two voting against and one member abstaining from the vote. Under Morehead City policy, abstaining counts as a “yes,” vote, so the resolution passed 3-2.
With the council’s action, the city can initiate a process known as an upset bid procedure, which is required by state general statute in the sale of public buildings. Under that process, bidding can only open after the seller accepts an initial offer from a potential buyer, setting the minimum price and other terms and conditions for all subsequent bids.
Once the city publishes a public notice on the sale, upset bids from other prospective buyers must be received within a 10-day window, which resets whenever there is a new offer until there are no additional bids for 10 days. Upset bids must raise the purchase price by a certain percentage to qualify, and buyers must also agree to the same terms and conditions as the initial offer. Once all proposals are in, the council can either accept the high bid or reject all bids.
The city has an offer from AJK Acquisitions LLC to purchase the city hall building for $300,000. As part of the conditions of the offer, AJK has agreed to allow the city to lease the old building for up to 24 months after closing while construction finishes up on the new city hall building. The city would pay no rent for the first 12 months of the lease and would pay $8,125 per month for the remainder of the lease.
Councilmen David Horton and George Ballou, who were the two “no” votes on the matter, said they could not agree to the offer because they felt the rent amount is too high.
“I wouldn’t even consider it with those kinds of conditions at the very beginning (of the offer), I’m sorry but I’m not in favor of this,” Mr. Ballou said.
However, council members Keri McCann and Diane Warrender, who voted in favor of the building sale, said the terms seemed acceptable, especially considering construction of the new city hall facility is projected to wrap up right around when the year of free rent would expire. Ideally, the city would move into its new building without having to pay any rent on the old one.
Mr. Horton and Mr. Ballou argued if construction gets held up for any reason, such as another hurricane or disaster, the high rent would be a burden on taxpayers. The council considered tabling the matter for 30 days to review the conditions and possibly renegotiate some of the terms, but City Manager Ryan Eggleston urged against that.
“I think it would be challenging to go back to their offer and (ask) to strike through the rent or reduce the rent for the second period after they offered that (one free year of rent),” he said.
Councilman Bill Taylor was the sole abstention vote on the matter. He said he didn’t necessarily oppose the building sale or proposed conditions, but he felt if there was so much internal disagreement on the council, it would be best to hash out all the details together to come to a true consensus. Seeing that wasn’t an option, Mr. Taylor decided to abstain.
Construction on the new city hall complex, located at the site of the former Charles Wallace school building on Bridges Street, is expected to begin in the next week or so. The new facility will house the city’s consolidated municipal offices, which are currently split between the city hall on Arendell Street and the municipal building on S. 8th Street. The city has no immediate plans to sell the municipal building, which is on the state’s historic building register.
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