The former location of Umpqua Bank in Centralia, located at 215 N. Pearl St., is back on the open market two years after the Centralia City Council voted to purchase the building to operate its municipal court.
But in the 16 months since its purchase for $1.2 million, the building has remained unoccupied, not counting the vacancy prior to the city’s purchase. The city previously sold the parking lot on the property to outside developers, and the council decided Tuesday to both surplus and place the building on the open market for a three-week period. Staff set an internal value of about $950,000 for the property, with a recent appraisal coming in “significantly less” than this value, according to the city’s agenda report.
Councilors adjusted the staff’s recommended motion of surplusing the building and placing it on the market for a one-week period in a closed bid system. One of the primary factors behind the city’s decision to surplus and sell the property was due to the weather impacts on the vacant building, as well as the rising costs of rehabilitation and repairs.
“The machinery is broken. The roof has leaked. We’ve determined through an appraisal process that there would be a significant amount of repairs that would be necessary to just make the building functional,” Centralia City Manager Michael Thomas told the council Tuesday. “Once you get through those costs, then there’s an additional cost to the city to make the building into what you initially wanted it to be, which was a municipal court facility.”
Thomas estimated that the cost of making the Pearl Street property functional and serviceable as a municipal court building would be about $2.5 million, while repairs to its current municipal building at city hall less than a block away may cost approximately $1.5 million.
When the city purchased the Pearl Street building in 2023, it intended to allow its municipal court to meet increasing caseloads, fulfill mandated security improvements and obtain necessary additional floor space to appropriately conduct court business. Staff complained then that both the court and the police department were space constrained, and the plan was for the municipal court to operate at the Pearl Street location and for the police department to move and expand into the vacated court spaces on Maple Street.
Currently, Centralia’s municipal court operates out of city hall.
According to the city’s agenda report, another option outside of fully converting the building was to spend $500,000 to rehabilitate the building for basic occupancy, including repairs to the roof, electrical, HVAC, elevator and more. Converting the building would have entailed security upgrades, new public toilets, internal office spaces, etc.
However, the city has neither fully planned nor fully budgeted for these costs, which have increased since the initial purchase. Even with selling the Pearl Street building, the municipal court still requires improvements to meet state laws and future growth plans.
The city’s agenda report states that modifying city hall is a challenge due to the building’s footprint. The municipal court requires numerous security improvements, whether those be at city hall or at another location, including upgraded walk-thru magnetometers, hand-held detectors, and X-ray devices for property. Additionally, the court requires storage lockers for personal belongings, renovations to the restrooms, a new room for juries, breakout rooms, new alarm systems, and new paper free electronic court processing systems, among other needs. The city may be able to install many of the security upgrades to the current court facility for approximately $200,000.
Councilor Norm Chapman said he supports the surplus of the property so as to prevent further deterioration of the building.
“Even though it could be a potential loss for the city from what they originally purposed it, we need to get rid of that asset,” he said. “As the city grows and more buildings have to be built, we deal with it to be able to pursue something new compared to letting that thing just sit there and continue to go down to the point where it’s only worth the land that it’s sitting on.”
Councilor Max Vogt, who served on the council when it voted to purchase the property, admitted that “it was a different world we were living in” when it made the decision.
“There was a lot of pressure, not negative, from a lot of people and certainly the legal community. They wanted to have a place where all the courts could come together in one place. It seemed like the right thing at the time,” Vogt said.
Councilor Mark Westley said he was initially adamant about holding onto the building since the city already owns it and that a time will come when the need for a bigger facility will become dire. But he agreed with the council that the building needs to be liquidated.
“At some point in time, a future city council is going to have to bite the bullet and say, ‘We are out of space. We’re back in the corner, and now we have to do something,’” he said. “I just hope we don’t look back at this point in time and think, ‘Wow, we really missed an opportunity here. We could have done something significant and really made a difference.’ Through all of that, I will agree with my fellow councilors that it does need to be liquidated.”
Thomas said the original plan for the closed bid process was to take bids from anyone interested in buying the property and address it to the city in a sealed envelope, and the highest bidder would win.
“It eliminates some of the give and take of offering and negotiations. Whoever gives us the best bid on what they think the property is worth to them would get the property,” he said.
The council supported going through their contracted real estate agent to list the property and market it to the widest market possible. Staff said it is possible to put it on the open market and then try the closed bid system if it doesn’t receive any bids.
LauraLee Zuber-Titus, the city’s realtor, said she can market the property internationally to target a wide variety of people.
“You could put in your stipulation that we’re going to put it on the market and we’re going to let everybody view it. We could end up with four, five, six, seven offers, and that’s going to be somewhat the same as a closed marketing,” she said. “It’s still going to give you the opportunity to reach everybody out there and give them a limit.”
