Deal made for new city hall


Staff writer

It looks like Federal Way will have a few extra million dollars this year, since the City Council Tuesday authorized the purchase of the Paragon Building as a new city hall for about $17.2 million less — before improvements — than was budgeted for a cops, courts and city government facility.

The city and ScanlanKemperBard, a real estate merchant banking company based in Portland, Ore., negotiated a non-binding letter of agreement last week that says the city will purchase the 87,000-square-foot building for $7.3 million on June 30.

In the 2003-04 budget, the council approved $24.5 million for construction of a new city hall to house the Police Department, Municipal Court and government offices.

“After talking to all the pertinent parties, it was just too good a deal to pass up,” Councilman Dean McColgan said. “It just made more sense.”

Mayor Jeanne Burbidge agreed. “It makes great financial sense, which allows those precious tax dollars to be used for other needs in the city,” she said.

In an unsolicited offer last month to the city, Mark Clirehugh, vice president of commercial property broker Insignia Kidder Mathews, said for $10 million total, the city could acquire the Paragon building and make tenant improvements.

Assistant city manager Derek Matheson said city officials haven’t reached any final numbers yet, but he said the $2.7 million difference would be insufficient to revamp the inside of the building.

City officials will study the building further during a contingency period in April and May to ensure it’s suitable for all uses.

The city hired architect Dave Clark, who designed Renton’s and SeaTac’s city halls, to help ensure “everything will fit” and that “flow between departments will work” in the Paragon Building, Matheson said.

Other experts specializing in mechanical, electrical and environmental systems probably will be subcontracted by the architect as the project progresses, Matheson said.

Before city officials discuss what to do with any unallocated money, they’ll have to figure out how the city will finance the building purchase, Matheson said.

“That’s the first decision we need to make,” he said. “That will determine what kind of money is left over at the end.”

Whatever is left over will be available for allocation by the council.

“We certainly have a list of additional needs,” Burbidge said.

Council members authorized the purchase of the building, located at 33325 Eighth Ave. S. and near the existing city hall, after an hour-long executive session Tuesday — which was the deadline for a purchase and sale agreement.

ScanlanKemperBard also is helping the city acquire almost three acres of vacant land across South 333rd Street to build additional parking on. The city will purchase the land from Quadrant Corp. for $3.89 per usable square foot.

City officials plan to build interior improvements during the first half of next year. Parking lot construction would occur at the same time, and city staff could move in during the last half of 2004.

“We’re pretty pleased with finding Paragon and finally coming to a decision,” McColgan said. “Because the public process took as long as it did, it ended up being advantageous. The Paragon Building came back around as a possibility.”

C. T. Purdom, the former vice chairman of the city’s Municipal Facilities Advisory Committee, which spent nine months last year researching location and funding options for a new city hall, said the council’s decision fits with the spirit of the committee’s recommendations.

“Always behind each (recommendation) was if we could get a better deal than what the consultant was offering, the council should look into it,” he said.

In addition to recommending several sites last year, the committee suggested the council request proposals to see what the development community had to offer.

Clirehugh offered the Paragon Building in lieu of a council call for bids, but the outcome was about the same.

“It doesn’t matter if it’s formal or informal as long as we get a good deal out of it,” Purdom said.

Staff writer Erica Jahn: 925-5565,

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