A plan to sell the city’s financially burdensome downtown human resources building moved forward at a city subcommittee meeting Wednesday.
The two-phase plan for the building, located at Second Avenue and Monroe Street, was approved unanimously by the Finance, Efficiency, Economy and Sustainability Subcommittee and will go before City Council.
Related: Costly government human resources building faces uncertain fate
The first phase, which would assess whether potential developers or buyers meet the criteria to buy the building, is known as a Request for Qualifications and would last 45 days, said Christine Mackay, the city’s community and economic development director. During this phase, a minimum purchase price for the building would be established based on the opinions of potential developers.
The second phase would be a 45-day Request for Proposal (RFP) process. During this time, each developer’s proposal would be assessed for how beneficial their purchase of the building would be to the city.
District 3 Councilman Bill Gates said the plan should move forward.
“I think this is a great solution, a great process, to handle the disposition,” Gates said.
District 7 Councilman Michael Nowakowski asked about demolishing the building, which Mackay said experts told her wasn’t feasible.
“The building probably has a 10- to 15-year lifespan, while land values get to the point where it would make sense to use the land for something else,” she said.
The building is currently a financial burden on the city, but its sale would provide multiple fiscal solutions.
Mackay said the sale of the building would pay off the building’s current $2.2 million debt completely. In addition, it would save the city $400,000 a year annually in maintenance and operation costs. There would also be a onetime savings of $220,000 because the phone service wouldn’t have to be upgraded.
One issue raised by both Mackay and City Council members was the building’s lack of a parking structure. Although there is a parking garage located at the base of the building, it is owned and operated by the owners of the adjacent 111 W. Monroe building. Currently, the human resources building is using a nearby surface lot.
“As this building is moved into the private sector, parking is something that will have to be accommodated,” Mackay said.
In addition to the lack of parking, the building has other functional challenges make it a tough sell in the private sector. The building was built in 1922 and faces concerns with its column spacing and floor design. But Mackay said that downtown Phoenix is becoming an attractive market for tech companies, which means a strong market for commercial property that could offset some of the challenges the city may face selling the building.
Contact the reporter at Daniel.Perle@asu.edu.
