City mulls buying former VDOT buildingPublished 2:17pm Saturday, November 24, 2012
By ANDREW FAISON/CONTRIBUTING WRITER
FRANKLIN—The City of Franklin is considering buying the former Virginia Department of Transportation building on Pretlow Street for its power and light department.
To do so, the city will borrow $2.6 million for this project and other projects. The city is also considering refinancing its $4.2 million debt.
A public hearing on the matter will be held during City Council’s 7 p.m. Monday, Nov. 26, meeting at City Hall.
“We need additional space for our electric department,” said City Manager Randy Martin. “They currently share space with public works and they have run out of space. We are looking at options for providing that space.”
The 80-some-year-old VDOT building has been vacant since the agency moved into its new facility on Meherrin Road in Courtland in January.
“The City of Franklin expressed an interest in the building about a year ago,” said Kris Purzycki, public information officer with VDOT in Suffolk. “We have only had one other inquiry and that was an individual who wanted to use the building as a daycare.”
Purzycki said VDOT has not set a price for the building.
Martin said another option would be to construct a new building.
The city hopes to refinance its $4.2 million debt at an interest rate of 4 percent or lower without extending the payback time.
“The rate is so attractive now for tax-exempt financing for local governments,” Martin said. “We will get super rates on this financing.”
The City in March 2010 did a debt-restructuring plan to create a savings, which was used to cushion against the loss of $1.2 million annually from International Paper. The mill in November 2009 announced its closing, but has since reopened on a smaller scale.
“The negative thing that came from the 2010 restructuring, we have a spike in our payments, and those payments are going to back up rather steeply,” Martin said.
The 2012 refinancing would also allow the city to borrow the $2.6 million, which would be absorbed into the city’s total debt.
“The city would actually still be paying less on our debt payments after issuing the new debt than we are currently paying after the refinancing while not extending the term,” he said.
The $2.6 million would also pay for replacing roofs at the Ruth Camp Campbell Memorial Library, the social services building and other buildings.
“The Public Works Department has asked to replace many of the roofs within the last five budget years, but the city has been unable to fund them through the operating budget,” Martin said.