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Idaho offers $1 million price drop on office building sale

The Garro Building, which houses offices in downtown Boise, is one of several buildings that the Idaho Land Board hopes to sell Dec. 6. Photo courtesy of the Idaho Land Board.

The Garro Building, which houses offices in downtown Boise, is one of several buildings that the Idaho Land Board hopes to sell Dec. 6. Photo courtesy of the Idaho Land Board.

State officials have approved auctioning 10 commercial properties, including one with a $1 million price drop.

The Idaho Land Board voted 4-1 on Nov. 21 to sell the properties as part of a plan to get rid of politically contentious commercial real estate and use the money to buy timberland and agricultural land the state uses to generate revenue to fund schools.

The properties – which include parking lots – to be auctioned on Dec. 6 in Meridian are mostly in Boise and Meridian, but include a 32,000-square-foot office building in Idaho Falls that failed to sell at a previous auction.

The appraised value has dropped from $6.1 million to $5.175 million. The building is leased by Battelle Energy Alliance, a company that manages the Idaho National Laboratory — the nation’s top federal nuclear research lab — for the U.S. Department of Energy.

Idaho Attorney General Lawrence Wasden, following an executive session during which the public was excluded, made a motion to sell all the properties but that one. That motion died when none of the other Land Board members seconded the motion.

State Controller Brandon Woolf then made a motion to sell all 10 properties, which also died when no one seconded that motion

After several minutes of discussion and at behest of Gov. C.L. “Butch” Otter, Woolf made the motion again and it was seconded by Secretary of State Lawerence Denney. It passed 4-1, with Wasden voting no.

The problem turned out to be the Idaho Falls property and the $1 million price drop.

“There’s just a difference of opinion about whether we’re leaving money on the table,” Wasden said after the meeting.

He said he would have preferred keeping the building, but selling it in December was within the Land Board’s constitutional mandate to manage land for the maximum financial return over the long term.

Denney, also speaking after the meeting, referred to a discussion that apparently took place during the executive session and had to do with the Idaho Falls building and concerns about Battelle Energy Alliance signing another lease.

“I think the Attorney General is probably right, that the way they do business they typically don’t negotiate until they’re right on the edge of the time being up,” Denney said, noting that lease expires in 2020.

On the other hand, Denney said, if Battelle didn’t sign another lease the state could be stuck with an unleased office building. Denney said the building has special security features that could make it unattractive to other potential companies. He said the security features had to do with federal requirements, but he didn’t know what type of work Battelle does at the building.

Otter after the meeting said he didn’t have a problem selling the building at the December auction.

The auction also includes three parking lots in Boise, an office building in Boise that at least one state agency is interested in, another commercial building in Idaho Falls, and four commercial buildings in Meridian.

None of the buildings can be sold for less than their appraised value.

The Land Board has been selling commercial real estate following complaints that state-owned businesses unfairly compete with private businesses.

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