San Luis faces costly reroofing project, building loan obligation
SAN LUIS, Ariz. — Mayor Gerardo Sanchez and the city council here may feel like their predecessors have left them holding the bag.
The council on Wednesday was faced with approving spending $889,023 over two years to reroof a city-owned building — a project previously expected to cost about $300,000.
“This isn’t what you want to hear, but it has to be done,” San Luis Community Development Director Jenny Torres told the council.
The council voted to approve the contract with Pilkington Commercial Co. to replace the roof on the 44,000-square-foot building on the city’s west site that houses a call center, Advanced Call Center Technologies.
The building at 580 N. San Luis Plaza Drive once housed a business, the Price Center, but the city purchased it in 2005 with plans to rent it to businesses or industries that would, in turn, create jobs for the city. The city had counted on using lease payments to pay off about $15 million in bonds issued for the purchase.
ACT has occupied half the building and has indeed created jobs in the city. But with the other half of the building routinely unoccupied, the city has consistently fallen short of the amount of revenue it hoped to generate from lease payments.
Late last year, the council found itself refinancing the loan. On top of that obligation comes the expense of replacing the leaky roof that has scared off other potential tenants from moving into the building.
Torres said the cost of the project ends up being nearly three times the original estimate be-
cause before the roof can be replaced, improvements must be made to bring the the air-conditioning system up to city code.
“It’s something that had to be done,” Sanchez said Wednesday following the vote to approve the contract. The project “was already budgeted, but three years ago we thought it was only going to cost about $300,000. But it’s something that has to be done. A very large amount of money was invested in that building and we can’t let it go.”
Sanchez said he and the council have no choice but to proceed with the project, even if they don’t agree with the original decision to buy the building. The city is obligated by past decisions, he said.
“I know that it may be said that I did it, that I approved the purchase of the building, but that isn’t the case. To the contrary, we approved financing the loan, benefiting the city. What is being done now was in the original contract and we can’t get out of it. We didn’t approve spending millions of dollars to do some project like that.”
The roof work is scheduled to begin later this month and be wrapped up within 90 days.
Torres said the work will be financed over two years, with $457,000 being paid in the current fiscal year that ends June 30, and the balance being paid off the following year.
Sanchez said the city’s lease agreement with the ACT is up in two years and will have to be renegotiated.