Montgomery County could sell and lease back its primary office building as it seeks to avoid spending tax dollars on needed repairs to the facility, the county announced Thursday.
The county purchased the One Montgomery Plaza tower, which sits across Swede Street from the county courthouse in Norristown, for $26 million in 2006. The building houses the bulk of Montgomery County's government offices, but needs as much as $18 million in repairs.
"There is significant cost to fixing this building and putting it in a condition that, frankly, it should have been put in several years ago, but that maintenance need was ignored by the prior administrations," Board of Commissioners chairman Josh Shapiro said.
By selling the building, the county would transfer the responsibility for those repairs to a private owner.
Such a move "would bring private investment into [One Montgomery Plaza] and into Norristown, which we think is an option that should be pursued," said Uri Monson, the county's chief financial officer. A sale would also place the building back on the tax rolls for the borough of Norristown, which has frequently called attention to the number of county buildings from which it receives no tax revenue.
"We'll put out a very detailed RFP [request for proposal] with all the condition issues on this building, all requirements [the county has] for a long term lease, all the work we'd need to have done [on the building]," Monson said.
Monson said the county's hypothetical lease to reoccupy the building would cover a 20-to-30 year term and be worth as much as $80 million.
"This is an extraordinarily complicated issue," said Commissioner Bruce Castor. Castor said the commissioners had received a briefing on the sale and lease-back proposal from county financial staff, and that he believed it "was really good thinking on someone's part to come up with this idea."
In effect, the county would be swapping the capital costs of repairing the building for the operational costs of a regular lease payment.
"Under various scenarios, there is a strong fiscal argument to be made for a sale-leaseback option," Shapiro said. "Obviously, a final determination will have to be made based upon who ultimately bids on [the building] and what deal they put on the table."
Regardless of who pays for the repairs, Monson said the county will have to vacate the building for up to three years while the work is carried out.
The commissioners unanimously approved a resolution to publicly advertise the request for proposals. Monson said there are currently "no specific offers or bids" for the building.