The city of Benton's decision to pay more than half a million dollars for a new city hall earlier this year was a sound financial move, one official says, even though the price was more than twice the building's most recent appraised value.
City Finance Commissioner Dennis Miller said city leaders "most definitely" made a wise decision in electing to purchase the property at 1403 S. Main St. from Benton School District No. 47 for the price of $550,000 -- a cost that was far lower than what construction of a new, similarly sized facility would have cost, Miller pointed out.
The city purchased the building in January following an architectural assessment of the old city hall in 2015 that concluded it would cost more than $1.8 million to rehabilitate the facility, which still houses the police department, and bring it into full code compliance. The assessment, which according to documents provided to the Evening News cost the city almost $19,000 itself, also concluded it would cost nearly $2 million to build a new facility of comparable size.
Rather than exercise either of those options, the city moved to purchase the new city hall for the price of $550,000 and build a new police station, construction on which is still ongoing, for what Miller previously estimated will be completed at a cost of $350,000 to $375,000. Throughout the year, city leaders also have approved a host of additional expenditures for the new city hall facility, including more than $12,000 for remodeling in June and almost $3,300 for upgraded security in July, according to city council meeting minutes. Those security costs were covered by a state grant received by the city.
With all of the costs for the new city hall and new police station factored in, Miller said the final price is still far less than the cost of one brand new facility would have been.
"I don't understand why people don't understand the best use of tax dollars," Miller said. "I think the city council did a good job of coming up with an excellent building to serve as city hall."
The $550,000 price tag for the building, however, greatly exceeded the most recent market appraisal, which was completed in October 2015 while the school district still owned it and estimated its value at just $280,000 -- just over half what the city paid just three months later. The city, which Miller said paid for the building using existing money in the budget, did not have its own appraisal done prior to purchase.
Both Miller and Dr. Jay Goble, superintendent of Benton No. 47, pointed out that the October 2015 appraisal did not take into account substantial improvements the school district made to the building following its purchase from CIPS in 2010, including most notably the addition of an elevator and a generator. According to documents provided to the Evening News, the school district first purchased the building for $257,000 and then spent more than $261,000 on the elevator and other improvements. The appraisal, however, discounted the elevator's value.
"I have given no value to the elevator or the generator," the appraiser, Barry Bittle, wrote in his appraisal, a copy of which was provided to the paper. "There are very few buildings that sell will [sic] elevators especially going to the basement. The generator is several years old also."
The school district was surprised with the value the appraisal assigned to the property.
"I don't know why the appraisal came back in the amount it did," Goble said, adding that other less-costly improvements made to the building included new carpet, paint and the relocation of some walls. "We were a little shocked that it came back so low."
Either way, the city never sought an appraisal of its own prior to purchase, and Goble said the school district didn't feel the need to obtain a second appraisal. The final sale price of $550,000 was arrived at following "a couple of negotiating sessions" between the city and the school district, Miller said. A committee made up of Miller, Mayor Fred Kondritz and city attorney Tom Malkovich negotiated the purchase on behalf of the city, according to the city clerk's office. The full council voted to approve the purchase in January.
The Evening News reached out to both Kondritz and Bittle, the appraiser, by phone and email but received no response from either.
Goble said the deal was a "win-win" for both the city and the school district -- a notion that Miller supported from the city's point of view.
"We've got an excellent building to serve the needs of the city," he said.
