Split Vote Denies Property Purchase

An effort to purchase a downtown office building ended Tuesday with a split vote.

Sidney City Manager Ed Sadler and Economic Development Director Melissa Norgard met with the City Council regarding the purchase of the three-story building at Thirteenth Avenue and Illinois Street. Sadler presented the proposal as a better investment than interest on CDs. He said it is the original corporate headquarters and store of Cabela’s, now for sale by Cabela’s and under lease to UST Global Xpanxion. The lease is in effect until 2021 with an option to extend the lease. If Cabela’s sells the building, the purchaser inherits the lease as well, according to Sadler.

The price tag on the three-story building is $1 million. The funds, had the council approved it, would come from the Electric Fund. Sadler said the building is appraised at a little more than $1 million, not including the contents of the building. Sadler said the value of the deal is increased by the parking lots. He said the total land and building is valued at about $1.8 million. He added taxes will still be paid on the building, and the lessee will be responsible for maintenance of the property.

“The whole point is this is worth a whole lot more than we’re putting into it,” Sadler told the council Tuesday.

Sadler stressed none of the proposed transaction will involve tax money. Councilman Burke Radcliffe asked if the lessee, UST Global Xpanxion, is interested in purchasing the building. Norgard said there have been several discussions regarding the company purchasing the building. She said the company’s interest in Sidney is a result of the “perfect storm,” available housing, workforce and the lease agreement. She said UST Global Xpanxion has a staff of 10 and are expected to significantly “ramp up” by the end of the year.

Norgard said the UST office in Sidney is a new platform they’re offering to clients. It also includes bringing “offshore” procedures to the heartland of the U.S.

Several members of the Sidney community spoke to the issue. Many asked why the city is getting involved in real estate transactions and what the purchase would do to tax revenue. Sadler said as Enterprise Zone funds, taxes are paid on the building. Sadler said the City owns several buildings that because of the business conducted in the buildings, are taxed.

Several of the speakers also questioned the City entering a risky venture, questioning what would happen if the company leaves at the end of the current contract.

“It all sort of depends on your long-range plans,” Sadler said.

Norgard said the company expanding to three floors tells her they are committed to Sidney.

The council was split with Mayor Roger Gallaway absent. Councilman Burke Radcliffe said with the concerns expressed by people he has met outside of the meeting, and those Tuesday night, he cannot support the proposal.

Councilman Brad Sherman saw the question as planning for the future.

“It boils down to where do we think Sidney is going to be in five years,” he said.

Councilman Bob Olsen said he can see both sides of the argument, also asking about the company’s commitment, and asking of staff did “due diligence” on the company.

Councilman Sherman made the motion to approve the purchase. After a long pause, acting mayor Joe Arterburn made the second with Sherman and Arterburn voting in favor of the purchase; Radcliffe and Olsen voting against it. Sidney Mayor Roger Gallaway was absent due to a work commitment. With the split vote, the proposal did not pass.

Sadler said Wednesday he will be meeting with Mayor Gallaway to decide how to proceed.