City officials say they neither asked for, nor were offered, a recent appraisal of the building that would become the new Benton City Hall, even though that document showed city leaders paid almost twice the building's appraised market value.
City Finance Commissioner Dennis Miller said Thursday that he was not even aware of the appraisal's existence until late this summer, well after the city had paid the Benton No. 47 School District $550,000 for the structure at 1403 S. Main St. that has housed city offices since August.
An appraisal commissioned by the school district three months prior to the sale, however, assigned the building a market value of just $280,000. Documents provided to the paper show the school district first paid $257,000 for the structure in 2010, but then spent more than $261,000 on top of that to add an elevator and a generator, among other improvements. The appraisal explicitly discounted the value of those improvements.
City attorney Tom Malkovich said the agreement between the city and school district was an "arms-length" arrangement among parties with a long-standing and trusting relationship. Pointing out that the building was not even on the market, Malkovich said the school district told the city what price it needed in order to recover its costs for the initial purchase and renovations, and the city saw it as financially far better than its other options for obtaining a new facility.
"We felt this was fair to both sides," Malkovich said.
Dr. Jay Goble, superintendent of Benton No. 47, was unavailable for further comment Thursday but told the Evening News earlier this week that while the district was puzzled by the initial appraisal amount, it never sought a second one -- and Miller said the city, paying for the building using money already in its budget, never sought an appraisal of its own.
"We weren't looking to make any money," Goble said. "That (amount) was absolutely what we needed to have."
The city purchased the building after obtaining an estimate that said refurbishing the old city hall on West Main Street, which also houses the police department, would have cost more than $1.8 million, while building an entirely new facility would have cost nearly $2 million. Instead, the city elected to purchase the new city hall for $550,000 and build an entirely new police station for what Miller said will end up being $350,000 to $375,000. The city also did at least $15,000 in renovations and upgrades to the newly purchased city hall.
"We got into this building at a better cost than those others," Miller said, referring to other existing properties officials looked at for a new city hall.
Even in hindsight, Miller and Malkovich insisted that the city got a great deal on the building, and they said prior knowledge of the appraisal would not have compelled them to seek a lower price. They also said they have no regrets about not getting their own appraisal done on the property.
"There was not a need for us to get an appraisal," Malkovich said. "That was the price they were going to sell it at."
Malkovich added that while the appraisal dismissed the value of the elevator, it was something the city needed to be in compliance with the Americans with Disabilities Act. Asked whether the elevator is utilized, Miller said it gets use when council meetings are in session. He also said it helped with last summer's moving process.
"It was useful when we moved into the building," Miller said. "It was good for moving file cabinets."
