Batemon said the only way the city can have total control of the former St. Vincent’s St. Clair Hospital property, the medical professional building and DHR property is to assume a $4 million loan from the county.
Batemon told Mayor Joe Funderburg, City Manager Patrick Draper, city attorney John Rea and Schools Superintendent Michael Barber at a Thursday County Commission work session that the hospital property, which includes the professional medical building, hospital and parking lots, was appraised at $5.1 million in 2010.
He said the DHR building and the two acres of land that surround the facility were appraised at $500,000 in 2011, but that appraisal was based on the condition that the building was brought back to its original condition, before the facility was gutted by fire.
He told city officials that is why the commission accepted the $125,000 offer from the Board of Education, because it would take about $380,000 to bring the building back to its original condition, which would put it in the ballpark of half a million dollars, the appraised value.
Batemon said at the time of the agreement between the county and city to help fund the construction of the new hospital, city officials agreed to pay one-half of the interest of a $4 million loan, or $100,000, whichever was greater.
The money was needed by the St. Clair County Healthcare Authority to complete the construction of the new St. Vincent’s St. Clair Hospital.
Batemon said the DHR building was not part of the agreement, only the hospital property.
He said DHR was actually making lease payments at the time, and the building was owned by the county’s Public Building Authority.
But Rea said there was a reversionary clause in the DHR lease agreement and the DHR property would revert back to the St. Clair County Healthcare Authority if DHR was no longer leasing the building.
Rea said under the agreement with the county, all properties owned by the SCCHA were to be transferred to the city and county and other property interests should have been included.
He said the city does have half-interest in the property.
“The debate is what the property is,” Rea said, adding that the agreement is in error.
It excluded acreage, a pine thicket, in front of the DHR building.
Batemon said at the time of the agreement nobody knew of the reversionary clause of the DHR property, and the property was never considered as part of the $4 million agreement between the city and county.
“DHR still had an active lease,” Batemon said.
Rea said the city’s concern is that breaking up the property could hinder commercial development of about 60 acres of land.
“The city could have total control of the property,” Batemon said. “You can have it all for $22,000 more (a year).”
The interest on the $4 million loan is about $122,000 a year. The city pays about $100,000 and the county pays about $22,000 a year on the interest only loan.
Batemon said if the city assumes the $4 million loan, it should not affect its debt ceiling since this is a commercial development loan.
City officials considered taking over the loan earlier this year. They considered the possibility of building a wellness center on the hospital property and using the former DHR building as a new city library, but those plans fell through, Batemon said.
He told city officials Thursday that the city has until Oct. 21 to agree to assume the $4 million loan, or the County Commission will vote to have the county attorney move forward with the BOE attorney on Oct. 22 with the closing of the DHR property.
“Our hope is that everything is resolved, and we can move into the DHR building,” Barber said Thursday. “Our board has voted to purchase the building, and we fully intend to purchase the DHR building.”
Funderburg said after Thursday’s meeting that the city would like to continue discussions about a partnership with the BOE for the CenturyLink building.
There were discussions about the city and BOE partnering to buy the CenturyLink building, but the school board was only offered a long-term lease agreement from the city.
Barber said the BOE wanted ownership, not a long-term lease, which is why it voted in favor of buying the DHR building from the County Commission.
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