Elon’s municipal leaders braved the frigid weather and icy road conditions on Tuesday to revisit a multi-million-dollar real estate deal that, if approved, could provide some new digs for many of the town’s operations.
The members of Elon’s town council ultimately met for an hour that evening (including about 20 minutes in closed session) to discuss the town’s potential purchase of a building that the Laboratory Corporation of America owns at 112 Orange Drive in order to rehouse Elon’s town hall and its municipal police department.
This confab, which had been rescheduled from Monday on account of this weekend’s blizzard, was laser-focused on this 56,000-square-foot facility, which the council has tentatively offered to buy for $3 million. By the time its members adjourned for the night, they still weren’t ready to finalize this transaction, although they did seem more comfortable about it than they had been two weeks ago when they received some expert reports on the building’s condition.
Prior to Tuesday’s proceedings, the town’s leaders had spent the better part of a year eyeing LabCorp’s 6-acre complex as a potential replacement for the 7,000-foot edifice at 104 South Williamson Avenue that presently houses Elon’s police department and many of its administrative offices. This past October, the council tentatively offered LabCorp $3 million for this property – or roughly $1.1 million more than its assessed tax value of $1,852,803.
[Story continues below special subscription offer.]
MORE ELON NEWS THAN YOU’LL FIND ANYWHERE ELSE! SUBSCRIBE TODAY!
The company’s provisional acceptance of this offer triggered a 90-day due diligence period that has allowed experts in the municipality’s pay to look under the figurative hood of the town’s proposed acquisition. Two weeks ago, the council received a report on these professional assessments, which highlighted various renovations and repairs that could potentially set the town back as much as $7 million. Even the most urgent of these upgrades bore a price tag of $1.3 million, according to the town’s administrators.
The council, for its part, balked at these potential repair costs when they were presented. Its members went on to bandy about options that ranged from renegotiating the purchase price to abandoning the deal altogether. But in the end, they resolved to put off a final decision until their regularly-scheduled next meeting, which was initially set to take place on Monday, January 26.
The council had initially hoped that this week’s meeting would lead to a final decision given that the property purchase was scheduled to close on January 28. The urgency to reach a consensus became even greater after this weekend’s snowstorm prompted the council to reschedule the meeting for Tuesday. The pressure was somewhat abated when, going into the meeting, mayor Emily Sharpe acknowledged that the seller had tentatively agreed to postpone the deadline for closing.
The council thus spent the bulk of Tuesday’s hour-long gathering poring back over the report that had given some of its members cold feet about the property’s potential purchase. Elon’s town manager Richard Roedner conceded that the group’s earlier discussion about this assessment may have actually given its members an inflated sense of just how much they’d be obligated to spend on the facility’s renovation.
“Following our meeting,” he informed the town’s elected leaders, “I reached out to the architects, and by and large, their comment was that, when we invest money to upgrade, it is really dependent on when we need the space.”
Roedner argued that even the building’s most urgent repairs can be deferred as long as the town takes the necessary measures to prevent deterioration. He explained, for example, that a proposed roof replacement could be put off as long as the town patches up any leaks that have already developed. He also acknowledged that the town doesn’t have to immediately replace the building’s HVAC units even though some of them have effectively reached the end of their lifespans.
Roedner added that the council would have even more flexibility with the 42,000 square-foot warehouse that comprises the lion’s share of LabCorp’s facility. Although the town’s experts had warned that this area would be especially costly to overhaul, the town manager stressed that there’s no particular rush to undertake these improvements.
“The warehouse is not going anywhere,” he said. “If we decide to ‘warehouse’ it for five years, there’s not a lot we need to do…The big things are up to us – when they get done, and if they get done.”
Roedner also reminded the council that the town’s general fund has a rather sizable financial reserve, which could be diverted to bankroll the building’s upgrades. He pointed out that the town’s latest audit put the usable portion of these savings at about $11.5 million – a fair bit more than the $4 million which the town’s own policies recommend for the general fund. Although Roedner conceded that the council has recently drawn $3 million of these funds to buy additional rolling stock for the fire department, he conceded that there’s another $4.5 million which the town could apply to the purchase and repair of LabCorp’s facility.
In the meantime, the council heard a riposte to its earlier anxieties about the potential repair bill from its newest member Steve Exum.
“I don’t even know why we’re talking about renovation costs,” Exum, who was sworn in to office after last fall’s election, told his colleagues that evening. “We don’t have a plan yet. We just see a building that looks like an opportunity…and we need to keep the pipes from freezing and the roof from leaking – just the bare minimum.”
After about 35 minutes of public rumination, the council went behind closed doors to discuss the more sensitive points of the proposed purchase. Twenty minutes later, its members emerged with a consensus – albeit to put off their final action for another couple of weeks.
“During the closed session,” Elon’s mayor Emily Sharpe declared when she and her colleagues returned, “we requested an extension of our due diligence period until February 12. We will come back in February to make a final decision.”
