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Monday, September 25, 2017
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Commercial Real Estate

Aug. 31 – City Council votes to ‘test the water’ on selling Broughton Street and Thomas Gamble buildings

By Lou Phelps, Savannah Business Journal

August 31, 2017 – The Savannah City Council voted Thursday to support the recommendation of City Manager Rob Hernandez to pursue selling two city properties in the Historic District, based on what Hernandez termed a lucrative real estate market.

Over the objection of Alderman Tony Thomas, the Council voted to sell the Thomas Gamble Building which abuts City Hall on Bay Street.  Thomas argued that the city is moving too swiftly to dispose of city property, and the Gamble Building is the city’s last property on River Street.  He said he favored leasing the property, versus selling, and offered an amendment to the motion on the table.  But it failed 6 to 3, with Aldermen Van Johnson and Bill Durrence supporting Thomas’ effort.

Also set to be sold is the city’s Broughton Municipal Building on E. Broughton Street, that houses a number of the city’s Revenue functions. 

Hernandez said that both buildings had not been maintained, but that the hot real estate market in Savannah's Historic District would still possibly bring interested buyers.

Both properties will be sold by issuing a Request for Proposal (RFP) versus a straight bid sale.  In the same manner that the City handled selling the empty lot the City owned on E. Oglethorpe Street, next to police headquarters, the City’s RFP will set specifics of the types of buyers that will be considered.  On the Oglethorpe Street sale, the Council specified that they would not consider a lodging buyer or any type of short term rental proposed use of the land. 

No specifics were given by Hernandez on the RFP’s for the two new properties to be sold.

The City will both gain the revenue from the sale, and the buildings will potentially go back on the tax rolls. 

And, a portion of the revenue to be realized will go to help pay rent for space the Council will be renting in the current Savannah Morning News building on Chatham Parkway. Starting January 1, the city will be paying more than $750,000 a year in rent a year, for four years, to lease over 36,000 sq ft., stated to be at market rates.

This will allow the majority of the City departments now in the two buildings to be sold to relocated immediately. Alderman Thomas voted against the declaration that the properties were surplus, stating that he also objected to the City moving offices in to a media building. "I don't think it's appropriate," he said, "it's not arms length." 

The strategy being pursued by the Council is to build a new municipal complex in future years that will house multiple departments, now housed across the city in buildings which are impacting productivity, according to Hernandez. 

There is not a final plan on which departments will move out to Chatham Parkway for four years, but Hernandez said they are planning for approximately 88 employees to work from that address.

He also stated that adequate parking spaces are still being negotiated with the Morris family from Augusta,  which owns the building.

And, he added that an office for residents to pay their water, sewer and trash bills will be identified somewhere closer to downtown, versus the somewhat in accessible Chatham Parkway address. 

No property has been identified or approved yet by the City Council for a new municipal complex, though the City owns land on the south side of President Street which is a possibility.

The historic Gamble Building is now the location of the City Attorney’s offices and some planning department functions. The Chatham County Board of Assessors has assessed that 6 E. Bay Street property at $7 million.

The Broughton Municipal Building is also assessed for over $7 million, based on the most recent tax assessment done.

Officially, the two properties were declared “surplus,” thus allowing the sale.

WJCL-TV and WTGS-TV also rent space in the Chatham Parkway Building.  No plans to move the Savannah Morning News staff have been announced by the new owner of the company, Gatehouse/New Media.

Hernandez said that the city has very limited office space available to rent. The only other option was space at The Savannah Mall, but he said renovations there would have been expensive. 

Following the meeting, Hernandez said that he was also very interested in the Council considering building a new municipal complex in the proposed ‘Canal District,’ “on land that we already own.”  That project is slated to include a new sports arena and large public parks. 

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