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Town offers to buy Chamber building

Staff Writer

If the key players from the Town of Pagosa Springs and the Pagosa Springs Area Chamber of Commerce can get past all of the misunderstandings, bruised egos, and flaring tempers that have plagued negotiations lately, perhaps the Visitor Center will remain in its current location near the San Juan River.

At a special town council meeting held Monday night, town planner James Dickhoff announced, “I did deliver a non-binding letter of intent to the Chamber today …  and had a positive reception.”

Dickhoff explained the letter was for a lease-purchase agreement and that councilors Kathie Lattin and Tracy Bunning, both members of the town’s visitor center subcommittee, had signed it.

Lattin then made a motion requesting the council move into executive session per C.R.S. 24-6-402(4)(a) Concerning the Purchase, Acquisition, Lease, Transfer or Sale of any Real, Personal, or Other Property Interest to continue the discussion on the Visitor Center.

The tone of Monday’s meeting was a far cry from the tension and confrontational tone of the June 3 regular town council meeting.

June 3 discussion

During the public comment section at the beginning of that meeting, Nancy Dickhoff said, “I’ve had the luxury of working at the Visitor Center, and my personal suggestion is anyone who votes on it should have the luxury to stand there and speak to the people who come in there. It is a great honor to be able to point out our hot springs, the mother spring, and generally all of the places that most people want to know about… I personally wouldn’t volunteer if we had to go up to the parking lot.”

Nancy Dickhoff was referring to the former downtown City Market complex, a property now owned by the Pierce Mangurian Trust, which earlier this year the town had considered renting to house the Visitor Center.

While the public comment section of the meeting was fairly routine, later, when town council got into the formal discussion of the Visitor Center topic, matters quickly became more confused.

“In your brief you have two options,” Bunning began.

Bunning and Lattin, along with commissioner Steve Wadley from the Archuleta County Board of County Commissioners, have been members of a task force negotiating with the Chamber concerning the Visitor Center.

“The first one was presented after conversations with the business group that appeared before us,” Bunning continued.

In April, just as town council was prepared to finalize an agreement with the Pierce Mangurian trust, a group of local businessmen, including Lee Riley, Jeff Greer and J.R. Ford — all three are also members of the Chamber of Commerce — asked council for a chance to negotiate a deal that would keep the Visitor Center in its current location.

The proposal those businessmen gave the Chamber, dated May 5, described a conversation they had with Chamber Director Cindi Galabota and JaNae Christians, whom the Town Tourism Committee had just hired as Visitor Center manager.

“As a result of that conversation,” the document stated, “it was determined that both of these ladies felt that they could, in fact, work together to make this work.”

The document then spelled out the proposal being offered to the chamber:

• The Chamber would occupy 672 square feet of the building while the TTC would occupy 1,824 square feet.

• The town would pay the Chamber $1,500 per month for the lease, but the Chamber would sub-lease its share for $772.80 per month.

• The town would pay 70 percent of the water and electric bill, and half of the phone bill, while the Chamber would pay the rest of all three bills.

• The town would be responsible for all maintenance and landscaping.

• The county would abate the real estate taxes.

The agreement concludes that the estimated annual expenses for the town would be $18,000 and after 15 years the town would have paid $270,000 total. If the lease agreement runs its full term, it would be considered “paid in full” and the town would own the property. In addition, the town would have the option each year to pay it off early.

“This was presented only as a guideline,” Bunning continued at the June 3 meeting, “only as a starting point for discussions. Obviously this council had not had an opportunity to review it, so there was nothing binding in it.

“And then subsequent to that, the Chamber came back with the other proposal, and you can see if you’ve had a chance to look through them, we’re pretty far apart as far as what we felt the property is worth and what the Chamber feels it’s worth.”

The second item in the council’s agenda packet was a letter from Galabota to town manager David Mitchem, which stated, “The PSCOC Board of Directors and staff are still committed to reaching an agreement that meets our fiduciary responsibilities as well as the wants and needs of our community.”

The letter then spells out the counter offer — a total purchase price of $325,000, which would include a down payment of $97,500 and a monthly payment of $1,626.36 for 180 months at a 3.5 percent annual interest rate.

“This is an offer exclusive to the Town of Pagosa Springs,” Galabota’s letter concluded, “and will remain exclusive for two (2) weeks. If this offer is acceptable, the PSCOC would be happy to discuss a lease for a portion of the building.”

“I don’t think it is realistic for us to think that we are going to come up with a permanent solution to this situation any time soon,” Bunning told the rest of town council. “Because of the request from the community that we delay moving the Visitor Center to another location, we are out of time. Two weeks ago was really the drop-dead date for having changes in place, so we need to seriously consider this four-month extension and keep both entities in the building for that amount of time, with the town operating the Visitor Center and the Chamber taking care of their business.”

Lattin agreed with Bunning, reiterating that the town was supposed to take over Visitor Center operations after May 31, and outlining the town’s responsibilities concerning phones, utilities and property maintenance.

Mayor Don Volger then asked Galabota to step forward and speak to the council.

“I first want to make sure that the lease agreement you are looking at is the one Nancy and I proposed to you after the meeting we had last week,” Galabota began, referring to Chamber board president Nancy Carpenter.

“I also want to say that when we first had that meeting, we talked about doing a four-month extension when it was brought to our attention that we were looking at taking over running the Visitor Center for a four-month extension. This lease is for a long-term lease. We don’t want to do a four-month extension on the lease. We want to do a long-term lease. We don’t want to come back here in four months and have to renegotiate.”

Volger confirmed that it said “long-term lease” at the top of the document he had, but Bunning said, “Once again, they’ve changed it. At the meeting we had, we discussed four months.”

Galabota reasserted that the four-month extension they had offered was only for running the Visitor Center, but the town had rejected that, claiming it would run the operation.

“I was under the impression,” Lattin added, “that we would lease it for sure through September while we negotiated buying the building, that this would resolve the issue through the end of tourist season, but it in no way hampered us from moving forward and figuring out our options.”

The discussion continued to go back and forth with Mitchem and Volger joining in on the side of the town and Carpenter backing up Galabota’s argument, until Bunning finally said, “In light of this, I withdraw my recommendation that we approve this four-month lease.

“This is completely turned around. I was at the meeting. I understood what was said. We discussed four months. Now there have been some conversations since then about wanting to extend it, but have the distinct impression here that you view us as being over the barrel here, and you’re trying to take advantage of us, and I resent that.”

Chamber board member Jerry Smith then stepped up to the microphone and said, “I was at the same meeting, and I think at the outset of that meeting there was lots of confusion. Our position is pretty clear; for a year and a half we have tried to cooperate with the wishes of the town to have us stop running the Visitor Center for reasons we didn’t necessarily agree with, but we’ve accepted. We’ve continually made offers of what to do. The latest one was an offer to sell, because we thought that made the most sense.”

Smith went on to explain that the TTC has been running the Visitor Center for the last four months, but there has been a change in management and Chamber employees have had to step up and do the TTC’s job.

In addition, the town was talking about remodeling the building and making the bathrooms compliant with the Americans with Disabilities Act, while still expressing an unwillingness to commit to buying the building.

“Tracy, my response to you would respectfully be this,” Smith asserted, “there are two sides to a confusing issue like this, and there needs to be consideration of both sides’ sensitivities and needs, and we haven’t felt like we get responded to respectfully.”

Smith went on to express several grievances about how the negotiation process has unfolded so far, then concluded, “It is very offensive to me, having worked with these people for a year, diligently, hour after hour after hour, to listen to any implications of bad faith on out part. Over and over and over we have said, ‘Let’s get this worked out,’ so maybe we are just incompetent as business people or negotiators. Maybe it’s all our fault, but it certainly isn’t because of bad faith.”

The discussion continued for another 40 minutes, and, eventually, tempers began to cool. In the end, the town was convinced to drop the four-month extension idea and commit to a long-term lease, which is what led to the executive session on Monday.

June 9 discussion

After nearly an hour of closed-door discussion, the public was allowed back in to the council chamber Monday evening and Volger said, “We were just in an executive session discussing contractual issues with the Chamber for the Chamber building as a purchase to occupy the Visitor Center.

“We have decided that we will present an offer of a lease purchase to the Chamber very soon and we will deal with that at our June nineteenth meeting, where we hope we will have an agreement and an ordinance to deal with at that time.”

Council member David Schanzenbaker then asked about TABOR, or the Taxpayer’s Bill of Rights. Among other things, TABOR prevents local governments from going into debt without first getting approval from the voters.

Bunning explained that the current proposal of a lease agreement would not require a vote of the people because it would not put the town in debt.

ed.fincher@pagosasun.com

This story was posted on June 12, 2014.