Garfield County, Valley View Hospital finalize land swap
Post Independent Staff
Christopher Mullen |
Breaking down the deal by the numbers
GLENWOOD SPRINGS — A land deal that will put two key parcels next to the existing Garfield County government complex into public hands, while securing the land beneath Valley View Hospital in perpetuity, has been the result of some lengthy negotiations, according to county manager Andrew Gorgey.
“There have been a lot of different offers and counter offers that went back and forth for the last couple of years, in an attempt to figure out what is worth what,” Gorgey said.
The county signed a deal on Monday that will transfer what’s now county-owned land beneath the hospital on Blake Avenue to the VVH Association, in exchange for the hospital-owned office building at the southwest corner of Eighth and Colorado in downtown Glenwood Springs.
In addition, the hospital will pay the county $1.1 million as part of the deal. Part of that money, in turn, will be used by the county to buy another adjacent piece of downtown property at 810 Pitkin Ave., for $865,000, county commissioners agreed this week.
The county eventually plans to use the newly acquired properties for county office space and other public purposes, Gorgey said.
On the surface, the deal makes it look like the county is coming away with about $1 million in its pocket, at the hospital’s expense. But there’s a lot of history at play, and the exchange between the county and the hospital is closer in value than it appears, Gorgey explained about the complicated deal.
According to Garfield County Assessor records, the 2013 assessed valuation for the county’s land under the hospital was $1.75 million, while the hospital’s Eighth Street property was valued at $1.86 million. No recent market appraisals were done as part of the transaction, Gorgey said.
However, in 2009, the land beneath the hospital was appraised as “vacant land” for $4.4 million, he said.
“To the extent that the land has a relevant market value, that was the highest possible value,” Gorgey said. “But, no one is going to buy it for that,” because there’s a hospital on top of it.
In fact, the county hasn’t had access to the land for 60 years since it was first deeded to the hospital in 1953, deeded back at one point, and then ultimately leased by the county back to the hospital for a term that wouldn’t expire for another 63 years.
“You’re trading land you don’t have access to … for two buildings that you will be able to use,” Gorgey said during the Monday commissioners meeting when the deal was authorized.
Because the hospital originally paid $2.4 million for the Eighth Street property, the $1.1 million payment to the county was an attempt to get closer to the county’s previous market appraisal for the hospital land, he said.
“That’s where we finally landed after several rounds of talks, and an agreement where (the hospital) gets the land it needs, and we (the county) get what we need,” Gorgey said.
As for the property at 810 Pitkin Ave. that the county intends to buy, the county had it appraised at $600,000, while the seller’s appraisal came in at a little more than $1 million, Gorgey said.
The agreed-upon sales price of $865,000 was an attempt to meet in the middle, he said.
The respective land deals are expected to close early next month.
GLENWOOD SPRINGS — A land deal with roots dating back to 1953 when the first hospital was built on Blake Avenue, and which has been the subject of formal negotiations between Garfield County and Valley View Hospital for the past two years, has been finalized.
The Board of County Commissioners voted unanimously Monday to approve a contract transferring the county-owned land beneath Valley View Hospital to the VVH Association.
In return, the hospital will pay the county $1.1 million and convey to the county the former Petre building and related property at 110 Eighth St., next to the county administration building, which the hospital has owned for the past several years.
The county plans to use that money to buy another building at 810 Pitkin Ave., located immediately south of the county administration building, for $865,000, commissioners also agreed Monday.
The Eighth Street building now houses several law offices, a title company and a lock and key business. The Pitkin Avenue building is home to the accounting offices of Monahan, Lampman & Hays, and is owned by an investment group led by Steve Lampman.
Garfield County Manager Andrew Gorgey said the county will extend a three-month lease to the accounting firm for $5,000 per month following closing next month, and is in negotiations for lease agreements with the occupants of the Eighth Street building as well.
But the county expects to take over both buildings for county government purposes “sooner rather than later,” he said. “We already have two county departments that don’t have a physical space of their own, and many other administrative needs.”
Combined, the two buildings will make available nearly 13,000 square feet of new office space for the county to use.
“This is a win-win for Garfield County and for the hospital,” Commissioner Tom Jankovsky said. “The county ends up with the additional campus space we need, taking us forward for the next 30 years.”
And, “For the hospital to have the land under their building adds to their balance sheet, and a strong hospital adds to the benefit of everyone,” he said.
The balance of funds from the hospital transaction, $250,000, will be used for improvements to the two buildings, “so we are not using tax dollars … for short-term capital improvements,” Gorgey said.
“It’s also about location,” Gorgey said of the land deals. “The commissioners are acquiring assets in proximity to assets we already own, assembling parcels for immediate use and with an eye to the future.”
The move continues Garfield County’s efforts to secure land surrounding the county courthouse building on Eighth Street for county operations and other public functions. The county is working on a long-term facilities master plan that will help determine the best use for the newly acquired properties.
Last year, the county purchased the Worrell-Durrett building at Eighth and Colorado and adjacent property extending north on Colorado Avenue.
On Monday, the county also approved a $215,664 contract to tear down a building that has housed an auto glass shop on that site and turn it into additional public parking in that block. The county is looking at the potential to build a multi-deck parking structure there eventually.
County commissioners were criticized after spending $2.5 million for the Worrell-Durrett property, which was twice what an appraiser said the property was worth at the time. The commissioners defended the purchase, saying the property had value above and beyond the appraisal because of its downtown location and proximity to other county holdings.
The county originally sold the land for the hospital in 1953 for just $1, according to county records. That deed contained restrictive language that the property would revert to the county if it ceased to be used for “public hospital purposes.”
In 1978, the hospital sold the property back to the county and entered into a 50-year lease with the county. Two years later, hospital administrators requested use of more land near the hospital.
VVH eventually bought the Petre building in the early 2000s for $2.4 million, according to county real estate records.
A new lease for the hospital land in 1985 extended the term through 2076 and rent payments to $100 per year. All payments for the term of the lease were made in advance.
However, “continuing status quo under this lease is of little actual value to either entity, and an ineffective use of assets for both,” county officials stated in the release.
In October 2011, the county commissioners met with the Valley View Hospital Association board of trustees and reached an agreement in principle for the property transfer. The deal signed by the commissioners Monday was the result of that agreement.
The county’s ownership in other properties near the hospital, including the Garfield County Public Health building and the River Bridge Center, are unaffected by the transaction.
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