City closes land deal with Providence for $2.5 million

By Polly Keary, Editor

It’s official; the city of Monroe has sold five acres of land at North Kelsey to Providence Health and Services for a new medical office building.

Thursday, the city announced that it closed the deal with Providence, selling five acres to the organization for $2,504,849.50.

Providence plans to build a $22 million, 43,000 square-foot multi-use ambulatory medical building on the site. The new building will offer about twice as much space as the building that Providence currently occupies across the street from Valley General Hospital.

It will house 17 primary care physicians, a women’s center with OB/GYN services and midwife office visits, a heart and vascular center and a musculoskeletal center.

Providence intends to begin building this month, and plans to open the new facility in October of next year.

The city did better on this land deal than it will do in the land deal with Walmart developer Sabey Corp.

In 2010, the city signed a purchase and sale agreement with Walmart, selling 24 acres of land at North Kelsey for $7.5 million, or $312,500 per acre.

The deal with Providence will yield $500,000 per acre.

The medical office building represents a departure front he original plan for that land. The parcel upon which it rests is part of a larger piece bought by the city in 2005 for eventual development into an upscale shopping center with a public gathering place. The economy soon soured, and the land has been mostly vacant, except for Lowe’s, ever since.

The city recently altered the planning documents for the area, on the grounds that the economy no longer can sustain the original vision.

The city has been paying off about $16 million still owed on the vacant land.

“This is a good day for the taxpayers in the City of Monroe,” said Mayor Robert Zimmerman. “For nearly a decade the city has been financially burdened by debt on vacant commercial land in the North Kelsey commercial area. A fresh approach and recent proactive efforts are paying off.”

The money will not all go to paying off the bond used to buy the land, though. A resolution passed by the city council in July allocated part of the money from this and the anticipated sale of the city-owned Galaxy Theater land to its tenant to go into a reserve fund. $750,000 is to go to municipal operations to be used over the course of three years. $150,000 is to go to a traffic study for the city’s Comprehensive Plan, $200,000 is slated for the city’s Sick Leave Reserve Fund, and $350,000 is to go to the fund set aside for paying the costs associated with the development and sale of North Kelsey properties.

The remainder is to go toward interest payments on the land debt. The bond comes due in 2015.

About $6.5 million of it will be paid off when the city closes the land deal with Walmart, which is on hold pending the outcome of a lawsuit seeking to win development concessions from the retail giant to make the coming store more closely adhere to the design guidelines for the area. That suit is expected to be resolved in the early part of next year.