With the real estate market still in the tank, the city burdened with the debt from the North Kelsey project, and the city running on a bare-bones staff, it might seem like a puzzling time to consider buying a new city hall building. But city officials heard about a deal they thought could be too good to pass up, or at least too good not to explore.

So last week, Mayor Donnetta Walser and council members John Stima and Margie Rodriguez trooped over to the Lake Tye building to investigate.

The building was constructed in 2006, but problems with the construction and the economy led to the bankruptcy of owner Judy Caton. The building cost $7.7 million to build; it was assessed at $8,460,000 last year and sold last February to Key Bank in a bankruptcy auction for just $3.1 million.

Now the three-story office building overlooking Lake Tye is back on the market for an undisclosed price. But the price, revealed only to serious inquirers, was low enough to persuade the mayor to take a closer look. “I was blown away,” she said. “It is exactly what we need...it’s a price we could work with.”

The city is going to have to do something about the building it has now pretty soon, she said. “The building we have is over 50 years old,” she said. “It used to be a car dealership.”

Former mayor Grace Kerwin pushed hard for the city to buy the current building. Until then, the City Hall, along with the library and fire station, had been located on Main Street in the building now occupied by the Monroe Historical Society.

In the early 1970s, the city hall was moved to the present location. “It turned out to be a really good investment,” said Walser. “But today it is deteriorating. We’re going to have to do some remodeling or look at rebuilding.”

Since the city hall relocated, the population of Monroe has quadrupled. The city increased in staff along with it. “We’re so crammed in here,” said Walser. The roof is leaking; buckets are placed around to collect the water when it rains. And both the air conditioning and the heating system need overhaul, the mayor said.

Renovating the building is one option. But moving to the Lake Tye building could be a good deal for the city, the mayor said. The building currently has several occupants on the first floor, including upscale restaurant Sockeye’s, Chocolate Moose, a coffee and sweet shop, and a Subway. Those would stay, and would pay rent to the city. The city, including the police department, would occupy the second floor, which is 15,625 square feet. The current City Hall is about 9,000 square feet.

The third floor would need some repairs before it could be occupied. The contractor that made the building made some mistakes on the windows and didn’t finish the job. That company eventually gave the former owner the money to complete repairs, and some materials were bought, but then the owner went bankrupt.

Currently the materials to finish the building are on the premises and just need to be installed. That floor, with 16,000 feet of space, could either be used by the city or rented to a tenant.

In 2007, operating expenses were about $5 per square foot; the rent runs to about $19 per square foot. If the current building was sold or rented out, the city could move to the Lake Tye building without much, if any, cost to the city, taken in the long term, although there would be upfront expenses that would have to be recouped, said the mayor.

And the city may soon be out from under the mortgage on the North Kelsey property it is buying near Fred Meyer. A second parcel, owned free and clear by the city, is up for a sale and a source close to aprospective buyer has indicated that the sale is likely to occur. That means the city can use that money to pay off the North Kelsey property.

But even if that doesn's happen right away, the Lake Tye building deal would be feasible, said the mayor. “We do have a financing mechanism for this,” she said. “And there’s some stimulus money right now for city hall buildings and city facilities.”

The mayor asked for an executive session last Tuesday to discuss the possibility of purchasing the building. But council member Mitch Ruth objected, saying that the discussion should take place in open session.

“I was so frustrated, I said ‘meeting adjourned,’” said Walser. The executive session would have been legal, she said, as the discussion would have revolved around the asking price for the building and the city’s potential means.

But as the deal seems to be time sensitive, the opportunity may not last long, she added. “It’s an incredible opportunity and it’s one we have to look at,” she said. “We owe it to the citizens to at least look at it.”