DOUGLAS — The Douglas City Council is moving forward with its intent to purchase the old Food City building on San Antonio Avenue for $900,000.
At its regular monthly meeting Wednesday, Nov. 9, in the city hall council chambers the proposed purchase was unanimously approved and placed on its second reading, which will be discussed when the mayor and council meet again on Wednesday, Nov. 16, for a special 5:30 p.m. meeting.
Before the regular meeting, various city leaders, among those Mayor Donald Huish, City Manager Ana Urquijo, City Engineer Elise Moore, Councilman Michael Baldenegro and others did a walk-through of the 35,000-square-foot building, which has been completely gutted.
Since Food City closed in October 2021 various grocery stores have looked at the building but decided Douglas was not a good fit for them due to demographics and not meeting their economic business model.
“Staff has been working very aggressively trying to attract a new grocer to Douglas,” Urquijo said. “We discussed the possibility of purchasing the building to help develop a strategy to better attract a future grocer. This now solidifies that direction.”
Urquijo said her staff approached Pacific Resources Associates LLC, current owners of the building based in Oregon, to negotiate a price.
“They had a listing price of $2.1 million,” she said. “After negotiation, the price currently before us is $900,000 as is. We are working through a purchase agreement with a few negotiated items that will have to be resolved but nothing that we don’t feel confident we can reach a negotiation before the second reading.”
Urquijo said this will fit the economic model the city is approaching, which has the ultimate goal of finding and securing a grocer on the east side again.
“The city does project some investment towards the building as it is really just a shell which will require some work,” she said. “We’re in the process of getting inspection done as part of the preliminary diligence on the property. We have anticipated approximately, roughly $500,000 in investment. We do feel the city owning this facility will be an advantage to those challenges that we have faced in the private sector in providing more favorable terms to the private sector.”
Urquijo noted there is a plan in place that will help the city get a return on its investment in about 10 years.
“We are recommending that this purchase be made by accessing our general fund reserves,” she said.
Councilman Mitch Lindemann expressed some concern about the city getting into the real estate business. Lindemann reflected back on how the city purchased the ACT Call Center on 10th Street, which brought jobs to Douglas and in the end, ended up being a good thing.
“Here again is an opportunity for us to invest in our community,” he said. “I think it would be well worth it.”
“That’s a lot of money,” said council member Ray Shelton, who also had some concerns. “I’m excited about it but I want to make sure that we’re doing the right thing.”
Huish said city leaders have met with one group already that is interested in the building. He also praised Pacific Resources Associates LLC for its willingness to work with the city and come down in the asking price because it realized the needs of the community.
“I would like to thank them publicly for stepping up and reducing the price to the point we could fit it within our budget,” he said. “I agree with Mr. Lindemann 100% I don’t like being in the real estate business at all, but this is an opportunity because of the generosity of Pacific Resources Associates LLC of wanting to help our community.”
In other action the mayor and council approved the first reading of an ordinance approving the purchase and sale agreement with Encarnacion and Nadia Denise Baez for a vacant parcel of land located on the southwest corner of 15th Street and Van Buren Avenue.
The proposed sale is for $60,000. According to city leaders the buyers plan to build two homes on this parcel that will be in conformity with the Douglas Municipal Code and Zoning regulations.
At the start of the meeting the mayor read a proclamation declaring Saturday, Nov. 26, as Small Business Saturday in Douglas and encouraged all local residents to shop local that day and support the local businesses.
Besides the Food City purchase and sale of land, other items are coming before the council.
Resolutions to accept grant funding from Walmart in the amount of $3,500 as part of their fiscal year 2022 community grants program, helping St. Vincent de Paul establish a community garden at its facility on Sixth Street and G Avenue, and authorizing a lease agreement for individual T-Hangers at the Douglas Municipal Airport will be brought before the city council.
The Nov. 16 meeting is open to the public and can be viewed on the city’s YouTube Channel.