Association Seeks More Money From City

— The Property Owners Association has requested the monthly police and fire buildings lease rate change to more than $14,000 a month from the current $650 a month, beginning next year.

According to a letter from General Manager Tommy Bailey, the association “will be going to a month-to-month lease at 10 percent less than fair market value.”

The city pays $650 per month for the lease of three buildings — Station No. 1 and the Police Department at Town Center, Station No. 2 on Trafalgar Road and Station No. 3 on Glasgow Road in the Highlands. The current agreement also calls for the city to pay for all interior maintenance.

According to the letter, the new figures are a result of a market rental study by Rife & Co. completed in March. Monthly rental rates would be about $5,000 each for the police and fire department at Town Center, $1,000 for the fire station in the Highlands and $3,000 for the fire station near Metfield.

Bailey sent a letter to the city on Nov. 30 that was received by Mayor Frank Anderson on Dec. 3. The letter was a followup to another letter sent a few weeks ago, Bailey said.

“We still haven’t gotten anything as far as which way the city wants to go,” Bailey said. “We have given them the options, but have not gotten firm direction from the city.”

Talks of lease negotiations between the association and the city have been ongoing since earlier this year. Nothing has changed since then, Bailey said.

“The last two boards at least have decided the village needs to do something with those buildings,” he said, adding the membership gets zero return for the structures and there is a risk associated with housing fire and police departments.

Anderson countered by saying, “They (the membership) have already paid for them (the buildings).”

At a cost of $168,000 per year, Anderson wondered where the money would come from.

“We don’t have any more money than they have,” he said. “Where do we go? We go back to the taxpayer and say you’re going to pay a little more in taxes so we can pay for these buildings.”

The buildings have been used by the city since fire and police services were taken over in 2007. When the association transferred fire and police equipment, the real estate was not included, but the buildings were leased to the city at a nominal rate.

In March, the association appointed board members Tim Hull, the late George DeGroot and Ed Morgan to a committee to investigate options for the buildings.

In April, the three-man committee met with Anderson and City Council members to discuss options. No decisions were made at that meeting. Later that month, the two entities came to a temporary agreement to extend the lease to the end of this year. The agreement called for the city to pay the monthly payment and cover the cost of all interior maintenance. Exterior maintenance would be paid for by the association, according to the agreement.

If there was a major accident at one of the buildings, Bailey said, it would affect the association’s insurance policy.

The new lease agreement would also require the city to obtain and maintain a liability insurance policy similar to other area cities leasing private property and cover all expenses associated with the space, such as taxes and maintenance.

“Risk is significant when you start talking about something like that happening,” Bailey said. “The city has tort immunity; that would come back on us.”

Anderson said Wednesday he has not had time to meet with aldermen to discuss the letter.

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