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Hershey Building On Market
Oakdale Flag

After sitting vacant for nearly two years, the city-owned Hershey Visitors Center building was the focus of the Oakdale City Council at its meeting on Monday, May 20 when it decided to put it on the market for either lease or an outright sale.

The city purchased the building in 2008 for $650,000 and spent $333,000 on improvements that included a remodel that converted the then 18-year-old building for city office use including telephone systems and necessary furnishings.

According to Oakdale City Manager Bryan Whitemyer, State Redevelopment Agency Funds were used to cover 53 percent of the total $988,000 costs and the city’s General Fund paid for the remaining 47 percent or $462,089.

When it was open, the building served as the site for some public works, community development, engineering, and building inspection department offices.

“It was primarily closed due to declining revenues and consolidation of staff offices,” said Whitemyer. “Steps need to be taken so that the building can once again serve as a positive asset to our wonderful city.”

Whitemyer said city staff met with Craig Lewis and Mike Ash of Prudential Commercial Real Estate in order to receive advice and recommendations on how best to market the Hershey Building. Prudential would later list the property for nationwide exposure.

“An initial visual inspection found approximately $55,000 in needed repairs,” said Whitemyer. “Additionally, there are some repairs that are needed within the roof and walls of the building. Until those areas are opened up the true cost of the repairs cannot be determined. It is quite possible that an additional $20,000 to $30,000 in repairs may be needed.”

Whitemyer added that to make the building marketable additional costs for parking design or construction of designated parking for the building would be needed, perhaps converting the grass area to the north or south of the building for the purpose.

“This will be a key concern for any perspective buyer,” Whitemyer said. “If not, we would have to lower the proposed price considerably.”

Whitemyer said the 5,400 square foot building could be leased at 85 cents a square foot or a sale price of $599,400.

Ash assisted Whitemyer in the presentation and said there were only approximately three other buildings of that size up for lease in the area, but added the average company only needs approximately 3,000 square feet. He advised the council that it could take up to two years to find a suitable buyer or lease tenant.

Whitemyer said the money needed for repairs and upgrades could come out of the city’s Economic Development funds and later be repaid after sale or during the lease.

Councilman Don Petersen said he felt repairs should be done to prevent any further deterioration of the building.

Councilman Farrell Jackson said he was not in favor of going into a contract for sale.

“This is not the right time to sell it,” said Jackson. “I’m not willing to sell this thing for $500,000. I would like to go into a lease agreement.”

Councilman Mike Brennan countered, stating he was not opposed to selling the building, but was hesitant about investing additional city money in the parking construction or design.

“I’m open to see what the market will bear,” Brennan said.

“If you were going to buy that building,” Ash interjected, “you would want to be able to control your on-site destiny on parking.”

Petersen pointed to the city’s proposed sales tax measure asking the dais how they could ask voters for additional funds for city operations when they had an asset deteriorating.

Jackson stated he acknowledged that the city always had the option of saying “No” to any proposed offer.

The council voted unanimously to list the building with Prudential Commercial Real Estate and directed staff to seek bids for the needed repairs to the building.