City Manager Massoud Ebrahim urged the Greenville City Council Tuesday to consider selling the Paul Mathews Exchange Building, before it becomes a potentially significant financial burden to the city.
“We feel there is a huge risk to the city with this building,” Ebrahim said during Tuesday’s council meeting, as he asked the council to pass an ordinance giving him and Mayor Steve Reid the authority to negotiate the sale of the building at market value.
Ebrahim stressed the final decision will be up to the council.
“The ordinance is only going to allow the city manager and mayor to start the process,” Ebrahim said. “You will decide whether the building is going to be sold.”
The building opened in the late 1920s, but was closed as a banking institution in 1985. While some offices stayed open for a while, the building was completely vacant by the time the City of Greenville and the Board of Development joined forces to start a renovation project in early 2001, transforming the structure into a one-stop government center. The restoration was completed in 2003.
The building was renamed again to the Paul Mathews Exchange Building, in honor of the former bank president on the occasion of the late Mathews’ 100th birthday on January 3, 2004.
The renovations to the building were funded under $6.7 million in debt, which is scheduled to be paid off in 2028. Most of the original tenants’ 10-year leases expired in 2013. One tenant has since renewed with a long-term lease agreement, with the remainder under year-to-year leases or under no lease agreements at all.
“In this year’s budget, we are subsidizing this building with $271,000,” Ebrahim said. The Hunt County Tax Assessor-Collector’s Office is on a month-to-month lease on the ground floor, while the lease of the North Central Texas Workforce for the second and third floors expires at the end of this month.
Ebrahim said the offices represent more than $275,000 in lease revenue which is not guaranteed, potentially leaving the city on the hook for more than $576,000, equivalent to 4 to 5 cents on the property tax rate.
“If we did have guaranteed leases through 2028 on this building, I wouldn’t be standing here,” he said. “But we don’t have that.”
Council member Dan Perkins expressed concern that the council had not been in contact with Hunt County officials, and had not spoken with the city’s bond counsel about the ramifications of a potential sale. Perkins also noted that the bank building itself is a significant asset for the city.
Reid disagreed.
“It is an asset, but it is a non-earning asset,” Reid said. “It is a deficit asset.”
Reid also asked the council for the opportunity to at least see if there was some interest from potential buyers, before tenants start to leave.
“A half-empty building is a lot harder to sell that a building that is full,” Reid said. “Maybe somebody will step up and maybe they won’t.”
Council member James Evans made the motion to adopt the ordinance, comparing the building to a beloved car which needs constant repairs.
“You reach a point ... when the danger of cost liabilities is so large you take the loss,” Evans said. “It scares me very, very much.”
The measure passed on a 5-1 vote, with Perkins against.