The city of Poplar Bluff could invest more than $9 million in a 26-year-old medical center it appears could be constructed new for less than $8.5 million, according to information detailed in nearly 200 pages of documents obtained by the Daily American Republic.
These also show the city police department could move into a basement level at Northwest Medical Center that "occasionally flooded during very heavy rains."
The site is slated to become a new city complex for police, city hall, city court and Municipal Utilities.
The city is set to close in February on the $3.495 million purchase. A June 2017 estimate by architects set renovation costs at $5.595 million.
Officials have said they can withdraw from the sale if any items of significance are found in assessments of the nearly 80,000-square-foot building.
Assessments were completed by architects in June 2017, an appraiser in December 2017 and engineers this month.
In addition to potential flooding problems they also identify a failing heating and cooling system, an aging roof and possible insurance liabilities.
The DAR is seeking comments from city council members regarding the findings. Information will appear in the Sunday edition.
Value
The purchase price is about $67,000 less than an appraisal given by Rahlmann Valuation Services as of Dec. 19, documents show. Rahlmann describes the location appeal of the 5.02 acres as above average on a heavily traveled road.
The $3.562 million value was developed by considering several criteria, including the cost to construct a new building today and comparison of the sale of other similar properties.
It would cost just over $8.2 million to construct a new building of the same size, according to Rahlmann, which says the acreage itself is worth about $192,000.
These two figures help set the upper limit of a property's valuation, the company said.
"(A) prudent person will not pay more for a property than the amount for which they can buy a site and construct without undue delay, a building of equal desirability and utility," documents state.
Depreciation of the structure is subtracted from its value.
Flooded basement
The report indicates the basement is not included as occupiable space, which also deducts from the value.
"The basement level is currently not tenantable and is only suitable for storage," it says.
Discussions with building personnel revealed this area floods occasionally during heavy rains due to drainage ditches which are not deep enough, and an overgrown storm retention pond on an adjoining property, Rahlmann said. On the day of the inspection, the floor coverings in the basement suites had been removed.
"Until this flash flooding problem is fixed this area of the building is only suitable for storage or warehouse uses," Rahlmann reported. "This is evidenced by the fact that much of the lowest level is used as a warehouse and file storage."
No other information concerning the extent of flooding was included.
The appraisal company also states that it did not inspect the HVAC system and it is unaware if this is operational.
An inspection conducted between Dec. 28-Jan. 2 by Smith & Co. Engineers documented seven large air dryers as part of a basement air system. The SaniDry equipment helps remove moisture from the air to keep basements dry and mold free, according to the manufacturer's website.
Failing HVAC
Engineers also found during discussion with building personnel that the HVAC system has failed before and left the building without heat.
They recommended replacing the entire system if a major renovation is undertaken.
Information provided by Northwest staff estimated repairs of the HVAC at more than $600,000. This would include 63 heat pump units that are nearing the end of their life and replacement of a cooling tower system. Parts for the system are increasingly difficult to find and some must be scoured from Germany, maintenance personnel reported.
City officials have said there may be portions of the building that are not occupied by city offices. Engineers found the current HVAC is designed for full occupancy to maintain the life of the individual heat pumps. Operating heat pumps have to work harder to accommodate portions of the system that are shut down, they said.
Architects estimate it would cost an additional $250,000 to disconnect a 10,000-square-foot area from the HVAC, electrical, plumbing and other sections of the building if the utility does not move into the site.
Another red flag identified by engineers is an exterior insulation and finish system. This system has sustained some damage that needs to be repaired by qualified contractors, Smith & Co., reported. The engineers cautioned some insurance carriers will not cover these types of building coverage systems because of issues with product failure and mold.
The roof is 13 years old and appears in good shape, but some areas have been patched, engineers said. They said it should likely be replaced in the next seven years.
Other issues identified by engineers include a possible overlay for the parking lot, spot repairs to entrance driveways and a leak in the cooling system that requires constant addition of glycol.
No major issues were identified by Northwest personnel regarding plumbing and electrical systems, according to the report. Engineers did visual inspections of these systems.
They advised that cracks in a concrete retaining wall and another exterior wall needed to be monitored long term.
Renovation estimate
A one-page document from Dille and Traxel Architecture was provided regarding possible renovation costs. The document is dated June 5, 2017, and estimates a total renovation cost of $70 per square foot.
The following costs were listed (approximate): police department, $2.2 million; city court, $685,000; city hall, $950,000; Municipal Utilities, $1.3 million; common areas, $410,000.
Space for these departments would be: police, 31,900 square feet; city court, 10,000 square feet; city hall 14,800 square feet; utilities, 14,400 square feet; and common areas, 8,700 square feet.
Architects said the costs did not include fixtures, furniture or equipment, a police shop building, the purchase of an adjoining lot, demolition of the downtown complex, signage, Barron Road improvements or specialty interior design.
The estimate did include mechanical, electrical and structure improvements, site improvements in the police and utility costs, a 5 percent contingency and 7 percent for professional fees.
Because the architectural estimate was completed eight months before the engineering report, it is unclear how much of the HVAC and other issues are included in the renovation estimate.