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August 30, 2017

Everett may offer $8.5 million to buy Health District's HQ

Snohomish County Tribune

Michael Whitney

EVERETT - The city would like to buy the Snohomish Health District's headquarters downtown on Rucker Avenue for $8.5 million.

The City Council this week is being asked to sign a purchase-and-sale agreement that includes a 120-day due diligence timeline. The city's plan is to move part of its public works department from the department's Pacific Avenue service center into the health district building.

The purchase offer price is the same as the building's listing price from the health district's brokers, from the price outlined in July. The two public agencies could kill two birds with one stone with the deal: The public works department is lobbying the city for a new home, but its request for a replacement building was rejected at the precipice of clinching an agreement because the City Council objected to constructing a replacement city building on valuable real estate in the commercial Pacific Avenue corridor; meanwhile, the ailing Snohomish Health District's headcount has shrunk to the point that most of the 90,000 square foot building is vacant.

The health district, an independent agency responsible for the public's well-being, began weighing what to do last year when it became clear its strapped budget couldn't afford maintaining its 1990-era building. It has deferred about $4 million worth of maintenance items at last count.

The $8.5 million would come from the city's Water/Sewer Utility Fund, according to a staff memo, meaning people's water bills that the city has saved up for infrastructure will pay for the purchase. The same fund was going to partially pay for an all-new public works building before that plan was scuttled by city council members. The fund is generally used for big public works projects; it helped pay for last year's Sewer "M" sewer line separation and replacement work in north Everett, for example. The all-new public works building on Pacific Avenue was projected to cost $70 million. The public works department wants out of the Cedar Street Center Annex as the 1980s building cannot seismically withstand a large earthquake.For the health district, the deal provides a buyer when it can use it most.

The building's been on the market since March 15. Real estate broker Kidder Mathews reported to the health district board in July some comparables, and suggested dropping the price over time if nobody made a purchase offer.

In the health district building at 3020 Rucker Ave., the Internal Revenue Service is leasing space on the second floor. The contract details suggest the IRS would be booted: The purchase-and-sale agreement states that no tenants would occupy the property after closing.

It was unclear if that also means the health district has to immediately go, or when.

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