By Kevin Kelley
An unidentified developer’s bid of $1.2 million for two vacant NASA buildings is giving Fairview Park officials hope that the property will soon generate tax revenue for the city.
Four firms bid on the property in an online auction conducted by the General Services Administration, the federal agency charged with managing government property. The auction began July 2. On Dec. 5, the federal agency announced the auction’s “soft close” would be Jan. 8. That meant that the auction would continue for another 24 hours if a bid was made on or after that day.
According to the GSA Web page devoted to the auction, the four companies’ final bids on the property were $750,000, $1,160,000, $1,180,000 and the winning bid of $1,200,000.
Located on the north side of Brookpark Road, the two structures, known as Buildings 500 and 501, contain approximately 160,000 and 40,000 square feet of office space, respectively. The buildings come with 9.8 acres of property.
When the auction began, the minimum bid was set at $200,000. GSA reportedly valued the property at $2.5 million, a figure Fairview Park officials said was far too high given current market conditions and the environmental remediation work required in the buildings.
The federal government has the right to reject any bid for any reason.
According to Richard Balsano, a Chicago-based GSA realty specialist, the agency has up to 60 days to decide if the winning bid will be accepted. Balsano told West Life he expected a decision would be made later this week or early next week.
The decision would be made by officials at GSA’s Chicago office, not Washington, D.C., Balsano said. The agency’s appraisal staff would review factors such as the participation in the auction and competitiveness of the bidding, he added. He declined to comment on whether or not GSA received the response it was seeking.
Fairview Park officials have been anxious to have the property turned over to a developer. They’ve repeatedly expressed their concern that the buildings will remain vacant for an extended period of time, denying the city much-needed income tax revenue. At one time, NASA employees and contractors who worked in the two buildings contributed more than $800,000 to the city annually in income tax.
Asked if Fairview Park officials will be pleased with the results of the auction, Balsano replied, “I think they should be pleased with the price received.” He added that while he could not say what the ultimate use of the property will be, it will be subject to property tax once it is no longer owned by the federal government. Once property taxes are assessed, 64 percent will go to the Fairview Park City Schools, 13 percent to the city, and the rest to other governmental agencies such as the county library system and the Cleveland Metroparks.
City officials definitely did not want the property to be used for something like surface parking for the airport, a use that would bring in little income tax revenue. Mayor Eileen Patton told West Life she is confident the bid amount of $1.2 million indicates that the developer intends to utilize the property in a way that is beneficial to the city.
“It’s nice to know it’s over, and we’re hoping they accept the high bid,” Patton said.
Development Director Jim Kennedy said he also expects that the property will be put to good use, based on interest that has been expressed by developers for the property. The property’s “highest and best use,” as far as the city is concerned, is high-end office, Kennedy said.
Before the online auction began, city officials had advocated the sale of the buildings to Hemingway Development, a division of Geis Cos., which had plans to redevelop the site. Fairview Park also sought to obtain the property for $1 and transfer it to Geis for redevelopment.
Kennedy said it was his understanding that Geis did not bid in the GSA auction.
Once GSA announced its plans for an auction, city officials pressed GSA to conduct it quickly so redevelopment at the site could commence. In April, Patton wrote to nearly 60 politicians about the situation, even blasting the agency for highly publicized instances of wasteful spending.