County to buy Telluride Real Estate

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County to Buy Property
by Karen JamesDec 18, 2008 | 173 views | 0 | 0 | | First In-Town Purchase Since 1999

TELLURIDE – The San Miguel County Board of Commissioners passed two resolutions on Wednesday that will advance its plans to purchase property located at 335 W. Colorado Ave.

When finalized, the transaction will represent the county’s first purchase of property within Town of Telluride boundaries since buying the second floor of the Miramonte Building in 1999, according to County Attorney Steve Zwick.

“It has been a long time since the county has acquired property inside the town,” he said, adding that the county hopes to close on the deal by Dec. 24.

“We had the opportunity and we needed to take advantage of it,” said County Administrator Lynn Black.

Legally described as Lots 1, 3 and 5, Block 1, Town of Telluride, Needle Rock Fiber Arts currently occupies a ground level commercial space in the property’s main building and will remain a tenant there following the sale, Black confirmed. Stewart Title of Colorado previously had ground floor offices there until the company moved.

In addition to the main building, some sheds located behind it are also part of the property.

Black said that over the next few months the county plans to consider which of its personnel should relocate to the new building to alleviate overcrowding in its current offices. It will also be looking at ways to make the building more “livable” as it considers future development there, she said.

One of the two resolutions authorizes the financing mechanism by which the county will purchase the property, while the other authorizes Commissioner Chair Joan May to execute all closing documents related to the $4 million acquisition from its current owner, Fruen Properties LLC.

The county plans to enter into a lease/purchase agreement with Salt Lake City-based Zions First National Bank to finance $3 million of the purchase at an interest rate of 5.26 percent that will reset after five years, according to Zwick.

Lease/purchase provides local governments with a method to finance the acquisition of large capital assets such as buildings or cars through a series of one-year payment installments. Renewed annually, these payments do not extend into subsequent years and, therefore, are not technically considered debt according to state law, Zwick said.

“You are not legally obligated, you can walk away at any given year,” he explained. “It’s used by local governments to finance all sorts of things.”

As a result, lease/purchase agreements do not require voter approval according to the state Taxpayers’ Bill of Rights, or TABOR, Amendment that requires a public vote to authorize all new government debt.

“Colorado law allows local governments to finance acquisition of capital assets with lease/purchase,” said Zwick.